<PAGE>   1
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 _____________

                                   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, 1996

                                       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 1-8791

                                 UNIMAR COMPANY
             (Exact name of Registrant as specified in its charter)

                    TEXAS                              76-0108240
        (State or other jurisdiction                (I.R.S. Employer
      of incorporation or organization)            Identification No.)

 1221 MCKINNEY, SUITE 700, HOUSTON, TEXAS              77010-2015
  (Address of principal executive offices)             (Zip Code)

       Registrant's telephone number, including area code: (713) 754-6650
          SECURITIES REGISTERED PURSUANT TO SECTION 12 (B) OF THE ACT:

                                                NAME OF EACH EXCHANGE ON
             TITLE OF EACH CLASS                    WHICH REGISTERED
             -------------------                    ----------------
       Indonesian Participating Units            American Stock Exchange

        SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE

     Indicate by check mark whether 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...

     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 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]

     Unimar Company is a general partnership between subsidiaries of Union
Texas Petroleum Holdings, Inc. and LASMO plc.

================================================================================
<PAGE>   2
                                     PART I
ITEM 1.  BUSINESS

GENERAL

    Unimar Company (the Company) was organized as a general partnership in 1984
under the Texas Uniform Partnership Act.  The partners are LASMO (Ustar), Inc.
(Ustar), a Delaware corporation and an indirect, wholly owned subsidiary of
LASMO plc (LASMO), a public limited company organized under the laws of
England, and Unistar, Inc. (Unistar), a Delaware corporation and a direct
subsidiary of Union Texas Petroleum Holdings, Inc. (UTPH), a publicly-traded
Delaware corporation.

    The Company's sole business is its ownership of ENSTAR Corporation (ENSTAR)
which, through its wholly-owned subsidiaries, Virginia International Company
(INTERNATIONAL) and Virginia Indonesia Company (VICO), has a 23.125 percent
working interest in, and is the operator of, a joint venture (the Joint
Venture) for the exploration, development and production of oil and natural gas
(gas) in East Kalimantan, Indonesia, under a production sharing contract
(Production Sharing Contract or PSC) with Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara (Pertamina), the state petroleum enterprise of the Republic of
Indonesia.  The majority of the revenue derived from the Joint Venture results
from the sale of liquefied natural gas (LNG).  Currently, the LNG is sold to
utility and industrial companies in Japan, Taiwan and South Korea.  See "The
Joint Venture" below.

    The principal executive offices of the Company are at 1221 McKinney, Suite
700, Houston, Texas  77010-2015 and its telephone number  is (713) 754-6650.  A
Management Board consisting of six members, three appointed by each partner,
exercises management, budgeting and financial control of the Company.  As of
December 31, 1996, VICO, in its capacity as the Joint Venture operator, had
approximately 1,900 employees in the United States and Indonesia.  The Company
presently does not have any other employees.  All aspects of the Company's
business that are not associated with the management of the Joint Venture, such
as operations, legal, accounting, tax and other management functions, are
supplied either by VICO or employees of the partners in accordance with
management agreements.

    The Company can give no assurance as to the future trend of its business
and earnings, or as to future events and developments that could affect the
Company in particular or the oil industry in general.  These include such
matters as environmental quality control standards, new discoveries of
hydrocarbons, and the demand for petroleum products.  Furthermore, the
Company's business could be materially affected by future events including
price changes or controls, payment delays, increased expenditures, legislation
and regulations affecting the Company's business, expropriation of assets,
renegotiation of contracts with foreign governments or customers, political
instability, currency exchange and repatriation losses, taxes, litigation, the
competitive environment, and international economic and political developments
including actions of members of the Organization of Petroleum Exporting
Countries (OPEC).  See Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations.





                                      -1-
<PAGE>   3
DESCRIPTION OF THE COMPANY'S INDONESIAN PARTICIPATING UNITS

    (a)  MARKET INFORMATION.  The Company's Indonesian Participating Units
(IPUs) are listed for trading on the American Stock Exchange under the symbol
"UMR."  The following table shows the reported high and low sales prices of the
IPUs on a quarterly basis:

                   INDONESIAN PARTICIPATING UNIT PRICE RANGES

<TABLE>
<CAPTION>
             FIRST QTR.  SECOND QTR.     THIRD QTR.   FOURTH QTR.
             ----------  -----------     ----------   -----------
<S>          <C>           <C>            <C>           <C>
1996                                               
----                                               
High          4-11/16      5-3/16         5             5-1/4
Low           3-13/16      3-7/8          4-1/8         4-3/16
                                                   
1995                                               
----                                               
High          9-5/8       10              9-5/8         5-1/4
Low           9            9-1/16         4-7/8         3-5/8
</TABLE>

Source of prices:  American Stock Exchange

(b)  HOLDERS.  As of February 14, 1997, 10,778,590 IPUs were outstanding and
held by approximately 3,562 holders of record.

(c)  PAYMENTS PER INDONESIAN PARTICIPATING UNIT.

<TABLE>
<CAPTION>
PERIOD                         PAYMENT DATE                PAYMENT
------                         ------------                -------
<S>                            <C>                         <C>
First Quarter  - 1995          May 30, 1995                0.48
Second Quarter - 1995          August 29, 1995             0.45
Third Quarter  - 1995          November 29, 1995           0.40
Fourth Quarter - 1995          February 29, 1996           0.43
First Quarter  - 1996          May 30, 1996                0.65
Second Quarter - 1996          August 29, 1996             0.53
Third Quarter  - 1996          November 29, 1996           0.59
Fourth Quarter - 1996          March 3, 1997               0.64
</TABLE>

    Each IPU entitles the holder thereof to receive a payment (Participation
Payment) until September 25, 1999, at which time the IPUs will expire with no
residual value. The Participation Payment for any quarterly period is equal to
the product of (i) a fraction, the numerator of which is 1 and the denominator
of which is equal to the number of IPUs outstanding on the last business day of
such quarterly period, multiplied by (ii) the amount by which cumulative Net
Cash Flow (as defined below) through the end of such quarterly period exceeds
the aggregate amount of all preceding Participation Payments in respect of all
IPUs.  If Net Cash Flow is zero or negative for any quarterly period, no
Participation Payment for that quarter will be made.

    The amount of Net Cash Flow for any quarterly period is equal to the
product of:

    (i)  a fraction, the numerator of which is equal to the number of IPUs
         outstanding on the last business day of such quarterly period, and the
         denominator of which is 14,077,747, multiplied by





                                      -2-
<PAGE>   4
    (ii) 32 percent of

         (a) all cash actually received in the United States by INTERNATIONAL
             and VICO (for purposes hereof, the Special Subsidiaries) during
             such quarterly period from their aggregate 23.125 percent interest
             in the Joint Venture (or actually received by them outside the
             United States if they voluntarily elect not to repatriate such
             cash) minus

         (b) an amount equal to the sum of the aggregate amount of all accruals
             or expenditures made by the Special Subsidiaries during such
             quarterly period as a result of their interest in the Joint
             Venture, foreign or domestic taxes paid by the Special
             Subsidiaries, any award, judgment or settlement and related legal
             fees incurred by the Special Subsidiaries, certain operating
             expenses incurred by the Special Subsidiaries, and the
             amortization of capitalized advances made by the Special
             Subsidiaries for certain major capital expenditures, together with
             interest thereon.

    Until September 25, 1999, at which time the IPUs will expire with no
residual value, Participation Payments for any quarterly period will be paid 60
days in arrears to holders of record on the date 45 days after the last day of
the period.  Participation Payments of less than $0.01 per IPU for any
quarterly period will be accumulated and paid when Participation Payments in
any succeeding quarter, together with previously unpaid amounts, exceed $0.01
per IPU.





                                      -3-
<PAGE>   5
                                    BUSINESS
THE JOINT VENTURE

    The Joint Venture participants are INTERNATIONAL (15.625%), VICO (7.5%),
LASMO Sanga Sanga Limited (an indirect subsidiary of LASMO) (26.25%), Union
Texas East Kalimantan Limited (an indirect subsidiary of UTPH) (26.25%), and
Universe Gas & Oil Company, Inc. (a subsidiary of a consortium led by Japan
Petroleum Exploration Co., Ltd.) (4.375%).  In addition, Opicoil Houston, Inc.
(an affiliate of the Chinese Petroleum Corporation) holds a 16.67 percent
equity interest and a 20 percent voting interest, with the remaining 3.33
percent non-voting equity interest held by assignees of Opicoil Houston, Inc.
VICO in its capacity as the Joint Venture operator conducts exploration and
development activities within the PSC area.  The cost of such activities is
funded by the Joint Venture participants.  The vote of participants holding 66-
2/3 percent of the total ownership is generally required for approval of
significant matters pertaining to the Joint Venture.

TERMS OF PRODUCTION SHARING CONTRACT

    Under a PSC with Pertamina that was amended and extended in 1990 until
August 7, 2018, the Joint Venture is authorized to explore for, develop, and
produce petroleum reserves in an approximate 1.1 million acre area in East
Kalimantan (East Kalimantan Contract Area).  In accordance with the
requirements of the PSC, during both 1991 and 1994, the Joint Venture
selectively relinquished approximately 10 percent of the PSC area.  The Joint
Venture must relinquish a further 10 percent of the PSC area by August 7, 1998;
10 percent by December 31, 2000; 15 percent by December 31, 2002 and 15 percent
by December 31, 2004.  However, the Joint Venture is not required to relinquish
any of the PSC area in which oil or gas is held for production.

    Under the PSC, the Joint Venture participants are entitled to recover
cumulative operating and certain capital costs out of the crude oil, condensate
and gas produced each year, and to receive a share of the remaining crude oil
and condensate production and a share of the remaining revenues from the sale
of gas on an after-Indonesian tax basis.  The method of recovery of capital
costs is a system of depreciation and amortization that is similar to U.S. tax
accounting methods.

    The share of revenues from the sale of gas after cost recovery through
August 7, 1998 will remain at 35 percent to the Joint Venture after Indonesian
income taxes and 65 percent to Pertamina.  The split after August 7, 1998 will
be 25 percent to the Joint Venture after Indonesian income taxes and 75 percent
to Pertamina for gas sales under the 1973 LNG Sales Contract, the 1981 LNG
Sales Contract and extension,  Korean carryover quantities and the seven 1986
liquefied petroleum gas (LPG) Sales Contracts, to the extent that the gas to
fulfill these contracts is supplied from the Badak or Nilam fields.  For the
gas used to fulfill the eleven-year extension (2000 - 2010) to the 1973 LNG
Sales Contract that is supplied from the Badak or Nilam fields, 41.655 percent
of such gas shall be split 25 percent to the Joint Venture after Indonesian
income taxes and 75 percent to Pertamina with the remaining gas supplying this
extension to be split 30 percent to the Joint Venture after Indonesian income
taxes and 70 percent to Pertamina.  All other





                                      -4-
<PAGE>   6
LNG sales contract revenues after August 7, 1998 will be split 30 percent after
Indonesian income taxes to the Joint Venture and 70 percent to Pertamina.

    Based on current and projected oil production, the revenue split from oil
sales after cost recovery through August 7, 2018 will remain at 15 percent to
the Joint Venture after Indonesian income taxes and 85 percent to Pertamina.
These revenue splits are based on Indonesian income tax rates of 56 percent
through August 7, 1998 and 48 percent thereafter.

    In addition, the Joint Venture is required to sell 8.5 percent (7.2 percent
after August 7, 1998) of the total oil and condensate production from the
contract area for Indonesian domestic consumption.  The sales price for the
domestic market consumption is $0.20 per barrel with respect to fields
commencing production prior to February 23, 1989.  For fields commencing
production after that date, domestic market consumption is priced at 10 percent
of the weighted average price of crude oil sold from such fields.  However, for
the first sixty consecutive months of production from new fields, domestic
market consumption is priced at the official Indonesian Crude Price (ICP).
Accordingly, domestic market sales from the Semberah field, which commenced
production in December 1991, were priced at ICP until December 1996.  The
participants' remaining oil and condensate production is generally sold in
world markets.

    THE JOINT VENTURE HAS NO OWNERSHIP INTEREST IN THE OIL AND GAS RESERVES.
The Joint Venture has long-term supply agreements with Pertamina for the supply
of gas and petroleum gas to be liquefied at a liquefaction plant owned by
Pertamina at Bontang Bay (the LNG Plant) and sold to certain buyers pursuant to
sales contracts.  The Joint Venture, other participating production sharing
contractors and Pertamina together market the LNG and the LPG produced at the
LNG Plant and LPG facilities and, as to the amounts allocable to the PSC, the
Joint Venture and Pertamina divide the net proceeds in accordance with the
percentages set out above.

    Payment for LNG and LPG is made in U. S. dollars to a U. S. bank as trustee
for Pertamina, the Joint Venture, other participating production sharing
contractors and lenders that have provided funds to build the LNG Plant and the
LPG facilities.  The LNG Plant's processing costs, principal and interest
payable on borrowings from such lenders, transportation costs, and certain
other miscellaneous costs are deducted from the gross LNG and LPG sales
proceeds.  The remaining amount represents the net proceeds for gas delivered
to the LNG Plant and is divided among Pertamina, the Joint Venture, and the
other production sharing contractors in accordance with the terms of their
respective agreements.





                                      -5-
<PAGE>   7
EXPLORATION AND DEVELOPMENT

    From inception in 1972 up to and including December 31, 1996, the following
wells were drilled in the East Kalimantan Contract Area:

<TABLE>
<CAPTION>
                 TOTAL     COMPLETED
    FIELD        WELLS     PRODUCTIVE        DRY     SUSPENDED
  LOCATION      DRILLED      WELLS          HOLES      WELLS 
  --------      -------    ----------       -----    --------
  <S>             <C>          <C>            <C>        <C>
  Badak           188          178             7          3
  Nilam           170          170             -          -
  Semberah         62           56             4          2
  Mutiara          59           51             7          1
  Pamaguan         32           26             6          -
  Wailawi           6            6             -          -
  Other            46            6            31          9
                  ---           --            --         --
              
  Totals          563          493            55         15
                  ===          ===            ==         ==
</TABLE>

    There are four significant fields in the East Kalimantan Contract Area,
namely, Badak, Nilam, Semberah, and Mutiara. The Badak field is in the
northeast portion of the East Kalimantan Contract Area, and the Nilam field is
located immediately south of the Badak field.  Total Indonesie and Indonesia
Petroleum, Ltd. (the Total Group), who are not parties to the Joint Venture but
have interests in the Nilam and Badak fields, are parties to unitization
agreements with the Joint Venture in both fields.  All gas and condensate from
the Badak and Nilam fields and all oil from the Nilam field, as well as all
allowable costs incurred in connection therewith, are deemed attributable to
the Joint Venture and the Total Group in the ratio of their respective
participating interests under the Badak and Nilam unitization agreements.  VICO
acts as operator for the Joint Venture and the Total Group in both fields.  The
Joint Venture has a full interest in the Semberah and Mutiara fields, and VICO
acts as operator for these fields as well. See "Business - The Joint Venture."
The Joint Venture is also producing from other fields in the East Kalimantan
Contract Area including Pamaguan, and Wailawi.

    The tables below summarize completed exploratory and development drilling
from 1994 through 1996 for the East Kalimantan Contract Area.

                              EXPLORATORY DRILLING

<TABLE>
<CAPTION>
                 WELLS                       DRY
    YEAR        DRILLED    DISCOVERIES      HOLES
    ----        -------    -----------      -----
    <S>           <C>          <C>           <C>
    1994          2            1             1
    1995          -            -             -
    1996          -            -             -
</TABLE>





                                      -6-
<PAGE>   8
                    DEVELOPMENT OR FIELD EXTENSION DRILLING

<TABLE>
<CAPTION>
                                          COMPLETED          
                               ------------------------------
                 WELLS         FOR           FOR      FORDUAL       DRY
    YEAR        DRILLED        GAS           OIL      OIL&GAS      HOLES
    ----        -------        ---           ---      -------      -----
     <S>           <C>          <C>            <C>        <C>         <C>
     1994          20           10             1          8           1
     1995          16            7             2          7           -
     1996           6            2             2          2           -
</TABLE>

    Of 493 completed productive wells in the East Kalimantan Contract Area,
approximately 285 contain more than one completion in the same bore hole.

    There were no wells in progress at December 31, 1996.

    The Company's share of the costs of the above wells ranged from 18.53
percent to 23.125 percent.

LNG SALES

    The following table sets forth total gas liquefied and sold as LNG, the
Company's share of such production (calculated on a million cubic feet
equivalency basis as described in Note (a) below), average sales prices
(excluding transportation costs) and production (lifting) costs of such
production for the years 1994 through 1996.

<TABLE>
<CAPTION>
                                        YEARS ENDED DECEMBER 31,              
                           ---------------------------------------------------
                                 1996             1995               1994
                                 ----             ----               ----
<S>                            <C>               <C>                <C>
Gross LNG Sales(MMCF) (a)      710,988           636,339            646,902

Company's Share of PSC
      LNG Sales (MMCF)          86,254            80,734             84,497

Average Sales Price
      per MCF (b)                $3.49             $2.96              $2.79

Average Production (Lifting)
      Cost per MCF               $0.19             $0.20              $0.18
</TABLE>

(a) Represents the volumes of LNG delivered and sold to purchasers which is
    measured by its British Thermal Unit (BTU) content and, for purposes of
    this table, has been converted to MMCF equivalents based on a ratio of
    approximately 1.107 billion BTUs per MMCF of gas.  The Gas Production for
    LNG includes production attributable to UNOCAL Indonesia Company, the Total
    Group and Pertamina.  The term "MMCF" refers to 1,000,000 cubic feet of gas
    measured at 60 degrees Fahrenheit and 14.7 pounds per square inch of
    pressure.

(b) The sales price is based on the average sales price (excluding
    transportation) per MMBTU of LNG received by Pertamina.  The term "MMBTU"
    refers to 1,000,000 British Thermal Units.  The sales price per MMBTU has
    been converted to a price per MCF based on the conversion ratio referred to
    in note (a) above.  The term "MCF"





                                      -7-
<PAGE>   9
    refers to 1,000 cubic feet of gas measured at 60 degrees Fahrenheit and
    14.7 pounds per square inch of pressure.

    The Company's production costs are small in relation to its revenues
because the Joint Venture's revenues under the LNG contracts are net of costs
associated with transporting and converting the gas to LNG and shipping the LNG
to the purchasers.  Costs incurred to operate and maintain wells and related
equipment and field facilities are considered to be production costs.

    During 1996, the Company's share of the Joint Venture's expenditures was
approximately $42 million, including $1 million of exploration expenditures and
$21 million of development expenditures.  In 1997, the Company's share of the
Joint Venture's expenditures is expected to total $52 million, including $6
million of exploration expenditures and $26 million of development
expenditures.  The 1997 budgeted expenditures reflect continued development
activities to maintain gas deliverability and a seismic and exploration program
that provides for the drilling of several wells.

RESERVES

    The Company files no reports which include estimates of oil or gas reserves
with any federal agency other than the Securities and Exchange Commission.

    The estimated proved reserves of gas and of oil and condensate as of
December 31, 1993, 1994, 1995 and 1996 attributable to the Joint Venture's
interest in the PSC in East Kalimantan were prepared by petroleum engineers
employed by LASMO, an affiliate of Ustar.  Gross proved field reserves are as
follows:

<TABLE>
<CAPTION>
                                 CRUDE OIL AND
                                  CONDENSATE             GAS    
                                ---------------      -----------
   TOTAL PROVED RESERVES        (000'S BARRELS)      (DRY MMCFS)
---------------------------                                     
<S>                                 <C>              <C>
Dec. 31, 1993                       203,068          7,187,995
Dec. 31, 1994                       224,995          7,149,560
Dec. 31, 1995                       196,892          6,636,127
Dec. 31, 1996                       217,392          6,118,180*
</TABLE>

    * equivalent to approximately 5,961 trillion BTUs.

    THE JOINT VENTURE, AND THUS THE COMPANY, HAS NO OWNERSHIP INTEREST IN OIL
AND GAS RESERVES BUT RATHER HAS THE RIGHT TO RECEIVE PRODUCTION AND REVENUES
FROM THE SALE OF OIL, CONDENSATE, GAS, LNG AND LPG IN ACCORDANCE WITH THE PSC
AND OTHER AGREEMENTS.

LNG PLANT

    Gas produced from the Joint Venture's interest in the PSC reserves is
liquefied at the LNG Plant, which is owned by Pertamina and operated on a cost-
reimbursement basis by a corporation in which the Joint Venture owns a 20
percent interest.  The LNG Plant currently consists of six processing units
(trains) having a combined input capacity of approximately 2.5 billion cubic
feet of gas per operating day and a peak





                                      -8-
<PAGE>   10
production capacity of approximately 639,000 barrels or 101,500 cubic meters of
LNG and 28,000 barrels of condensate per day.  The five storage tanks at the
LNG Plant have a total capacity of 3.2 million barrels of LNG.  Gas is supplied
to the plant through three pipelines (two 36 inch and one 42 inch) which are
connected to the central gas facilities at the Badak field, 35 miles south of
the LNG Plant.  The six train plant is one of the largest LNG processing
facilities in the world and has the capacity to deliver 275 LNG cargoes per
year. Since the first shipment in 1977, the LNG Plant has delivered 2,791 LNG
cargoes.

    The LNG Plant has been developed in four phases.  The original facility,
which consisted of two trains (Trains A and B) and a dock, was constructed with
financing arranged by Pertamina with the Central Bank of the Republic of
Indonesia, an international consortium of commercial lenders and a corporation
owned substantially by the Japanese LNG purchasers, and became fully
operational in August 1977.  Final payment on the loans was made in the first
quarter of 1990.

    Expansion of the LNG Plant from two to four trains (Trains C and D) was
completed in 1983.  Funding was arranged by Pertamina with Japan Indonesia LNG
Co., Ltd. (JILCO).  Final payment on this financing arrangement was made in the
third quarter of 1993.

    A fifth processing train (Train E) was completed in 1989 and supplies LNG
required for the Taiwan LNG Sales Contract with the Chinese Petroleum
Corporation (CPC), the state petroleum enterprise of the Republic of China
(Taiwan).  Project financing was arranged through a trustee borrowing with a
consortium of Japanese banks and is supported by revenues from such sales
contract, as well as in certain limited circumstances by portions of other
revenue streams. The financing contains two tranches, with tranche A totaling
$176.4 million at a fixed interest rate of 11.5 percent, and tranche B totaling
$117.6 million.  The financing is repayable in graduated quarterly payments
over ten years beginning in the fourth quarter of 1990.

    The sixth processing train (Train F) was completed in November 1993 and
supplies the LNG required for the LNG sales contract with Osaka Gas, Tokyo Gas
and Toho Gas for the sale of 2,020 trillion BTUs over a twenty-year period
which commenced in 1994.  In August 1991, Pertamina and an international
consortium of commercial banks and financial institutions completed project
financing of $750 million of which $699 million was required to fund the
construction of Train F and related support facilities.  Financial support for
the financing is limited to revenues from such sales contract.  The financing
is repayable over ten years in graduated quarterly payments which commenced in
December 1994.

    As a result of the production performance of Train E, Pertamina made
modifications to Trains A through D known as "debottlenecking."  Trains C and D
were modified in 1992 during regularly scheduled maintenance shutdowns.
Likewise, Trains A and B were modified in 1993 during regularly scheduled
maintenance shutdowns.  Capacity tests on all four trains exceeded design rates
such that Trains A through D are each now capable of LNG production rates
comparable to Train F, an increase of 14 percent, or 22 LNG cargoes per year in
total.  The total cost of the Trains A through D debottlenecking project
amounted to $79 million.  These costs were funded through Package IV revenues.
(See description





                                      -9-
<PAGE>   11
of Package IV beginning on page 13).

    In July 1995, a $969.5 million financing was completed for the seventh
train (Train G), third dock, LPG expansion and other support facilities. The
financing was provided from Japanese sources through arrangements similar to
those used to finance the LNG Plant's fifth and sixth trains.  Repayment is
scheduled to begin in 1998 principally from the proceeds of the medium-term LNG
sales contracts with Chinese Petroleum Corporation and Korea Gas Corporation
and, starting in 2000, from proceeds of the 1973 Sales Contract extension.  The
construction of the seventh train began in 1995 and is scheduled for completion
in late 1997.

    In March 1997, a $1,127 million financing was signed for the eighth train
(Train H), an additional LNG storage tank, an additional natural gas pipeline
from the Badak field to the LNG Plant, and a debottlenecking project for Trains
A through F.  The financing provides for initial advances of up to $150
million, with further advances being conditioned upon the execution and
delivery of the marine transportation agreement associated with the Badak VI
Sales Contract.  Construction is expected to begin in 1997.  Revenues from the
Badak V Sales Contract with Korea Gas Corporation and the Badak VI Sales
Contract with Chinese Petroleum Corporation will be the primary sources of
repayment for this financing.

    Financing for the fifth, sixth, seventh and eighth trains are nonrecourse
to both Pertamina and the Joint Venture.

    The LPG processing facilities at the LNG Plant were constructed
concurrently with the fifth processing train.  The LPG facilities were
completed in 1988, at a cost of approximately $158 million.  Financing was made
available to Pertamina through a consortium of Japanese banks.  A significant
portion of the LPG sales proceeds is dedicated to the financing, which is
repayable through 1999.

    A second dock facility at the LNG Plant is used for both LNG and LPG
deliveries.  The portion of the second dock costs attributable to the LPG trade
was financed through the same consortium of Japanese banks that financed the
LPG processing facilities at the LNG Plant.  Financing for the LNG portion of
the second dock was provided by a trustee borrowing from Japanese banks.  Final
payment on this financing arrangement was made in the second quarter of 1995.

    Included in the scope of the Train G project is a third dock to be used for
both LNG and LPG deliveries, as well as an additional LPG storage tank.

    The table below sets forth information regarding the status of the major
project financings incurred or arranged by Pertamina to construct the LNG
Plant:





                                      -10-
<PAGE>   12
<TABLE>
<CAPTION>
                    ORIGINAL
                  PRINCIPAL/     BALANCE AT     FINAL          PRIMARY
                    PAYMENT    DECEMBER 31,   PAYMENT         SOURCE OF
 FINANCING          AMOUNT         1996         DATE          REPAYMENT
 ---------          ------         ----         ----          ---------
                    (000'S)       (000'S)
<S>                            <C>               <C>       <C>
Trains A & B
 and 1st
 Loading Dock    $771,500      $      -             -      1973 LNG Sales
                                                             Contract

Trains C & D      995,800             -             -      1981 LNG Sales
                                                             Contract

Train E           294,000      130,830           2000      Taiwan LNG Sales
                                                             Contract
Train F and
 Support
 Facilities       699,000       576,482          2004      Train F LNG
                                                             Sales Contract

Train G and
 Support    
 Facilities       969,500       429,000(a)       2008      Package V Sales
                                                             Contracts (b)

Train H and
 Support        
 Facilities     1,127,000             -(c)       2010      Badak V and Badak
                                                             VI Sales Contracts

2nd Loading Dock
 & Train E
 Support
 Facilities       135,000             -             -      1973 LNG Sales
                                                             Contract

LPG Facilities    157,700        39,220          1999      LPG Sales
                                                             Contract
</TABLE>

(a) Drawdown amount as of December 31, 1996.

(b) Repayment is scheduled to begin in 1998 principally from the proceeds of
    the Korea and Taiwan Medium Term Sales Contracts and, starting in 2000,
    from the proceeds of the 1973 Sales Contract Extension.

(c) Financing was completed in March of 1997.





                                      -11-
<PAGE>   13
MARKETING AND DISTRIBUTION OF LNG

    Certain information regarding deliveries of LNG from the LNG Plant is set
forth below:

<TABLE>
<CAPTION>
                                       BTUS           AVERAGE
                  NUMBER OF LNG    IN TRILLIONS      PRICE PER
                 TANKER LIFTINGS   (APPROXIMATE)        MMBTU 
                 ---------------   -------------     ---------
      <S>              <C>              <C>            <C>
      1994             247              716            $2.52
      1995             240              704            $2.67
      1996             287              787            $3.15
</TABLE>

    As a result of variations in LNG tanker capacity among the various sales
contracts, the measure of a net equivalent cargo has been established.  One net
equivalent cargo equates to the quantity of LNG delivered for the Joint
Venture's interest in a 1973 Sales Contract shipment.

    The Joint Venture and other gas producers in Indonesia have the opportunity
to participate in each sales package.  The Joint Venture's equity interest in a
sales package is based on its share of gas reserves available for commitment to
the package.

    The Joint Venture's allocation in the LNG sales contracts has declined over
time since the initial 1973 Sales Contract, when the Joint Venture was
virtually the only supplier to the LNG Plant, to the present when there are two
other major production sharing contractors supplying gas to the LNG Plant and
sharing in the allocation of volumes.  Absent the discovery of significant
additional gas reserves in the Joint Venture's PSC, the Joint Venture's
participation in future sales packages will continue to decline.

    The following table sets forth information regarding the LNG Plant's share
of the LNG Sales Contracts grouped together by the Joint Venture PSC's
participating percentages in the sales contracts (each such group being
referred to as a "package"):





                                      -12-
<PAGE>   14
<TABLE>
<CAPTION>
PACKAGE         EQUITY           SALES CONTRACT           TERM         REMAINING GROSS     NET EQUIVALENT         BASE LNG PRICE 
-------        INTEREST          --------------           ----             VOLUMES           CARGOES (b)           PER MMBTU (a) 
               ---------                                                   -------           -------               ---------
                                                                            TBTUs          1996 REMAINING       12/31/96 01/31/97
                                                                                           ---- ---------       -----------------
  <S>           <C>           <C>                       <C>                <C>              <C>      <C>           <C>
   I            97.9%                 1973              1977-1999             86            61         29          3.62    3.77    
                                                                                                                                
   II           66.4%                 1981              1983-2003          1,062            39        240          3.68    3.84    
                                                                                                                                
  IIIA          50.0%           Korean Carryover        1986-2006            145             3         25          3.62    3.77    
                                                                                                                                
  IIIB          29.6%                Taiwan             1990-2009          1,144             8        115          3.61    3.76    
                                                                                                                                
  IIIB          29.6%                 Toho              1988-1997              4             -          -          3.62    3.77    
                                                                                                                                
  IIIB          29.6%           1981 Additional         1990-2003            114             2         11          3.68    3.84    
                                                                                                                                
   IV           27.2%               Train F             1994-2013          2,035            11        188          3.47    3.62    
                                                                                                                                
   IV           27.2%               Korea II            1994-2014            865             7         80          3.50    3.65    
                                                                                                                                
   IV           27.2%            1973 Extension         1997-1999            446             -         41          3.62    3.77    
                                                                                                                                
   IV           27.2%         Medium City Gas Co.       1996-2015            358             1         33          3.61    3.76    
                                                                                                                                
   IV           27.2%                 Toho              1990-1999             13             2          1          3.62    3.77    
                                                                                                                                
   V            21.6%            1973 Extension         2000-2009          4,361             -        320             -        
                                                                                                                                
   V            21.6%          Korea Medium Term        1995-1999            401             6         29          3.66    3.81    
                                                                                                                                
   V            21.6%               Badak V             1998-1999            106             -          8             -       -
                                                                                                                                
   V            21.6%          Taiwan Medium Term       1998-1999             46             -          3             -       - 
                                                                                                                                
   V            21.6%               Badak VI            1998-1999             44             -          3             -       - 
                                                                                                                                
   V            21.6%       Aquarius/Aries Extension    1997-1999             48             -          3             -       - 
                                                                                                                                
   VI          16.5%(c)          1981 Extension         2003-2008            942             -         53             -       - 
                                                                                                                                
   VI          16.5%(c)             Badak V             1998-2017            956             -         54             -       - 
                                                                                                                                
   VI          16.5%(c)             Badak VI            1998-2017          1,686             -         95             -       - 
                                                                                                                                
  VII            (d)             1973 Extension         2010-2010            436             -         (d)            -       -
       
  VII            (d)             1981 Extension         2009-2011            565             -         (d)            -       -
       
                                                                          ------           ---               
                                                                          15,863           140            
                                                                          ======           ===            
</TABLE>


                                     -13-
<PAGE>   15

(a)  Excludes transportation costs, where applicable.

(b)  Net equivalent cargoes represent the Joint Venture PSC's equity based on
     an average of 2,942 BBTUs per cargo.

(c)  Pertamina and the East Kalimantan producers reached final agreement on
     Package VI revenue sharing percentages in April of 1996. The Joint Venture
     PSC's interest is 16.5 percent.

(d)  The Joint Venture PSC's participation percentage in Package VII sales has
     not yet been determined and is not expected until 1999. Absent the
     discovery of significant additional gas reserves, the Joint Venture PSC's
     percentage in Package VII sales is expected to be less than the Package VI
     percentage.

     LNG is primarily sold under six long-term sales contracts between
Pertamina and buyers in Japan, Taiwan and Korea. These contracts are the 1973
Sales Contract, the 1981 Sales Contract, the Taiwan Sales Contract, the Train F
Sales Contract, the Korea II Sales Contract and the Medium City Gas Company
Sales Contract. Extensions to certain of these contracts, and several medium
term sales contracts, are supplied by the excess capacity of the LNG plant due
to the expansion of its facilities. The gas processed by the LNG Plant is
supplied from the Joint Venture's contract area as well as other fields in
which the Joint Venture has no interest. The Joint Venture's share in LNG
volumes from the LNG plant is expected to decline in 1997 by about 15 percent
as compared to 1996 due to the phaseout of the original 1973 Sales Contract in
which the Joint Venture has a high participation interest.

     LNG sales contracts and amendments thereto are executed between Pertamina
and the buyers for the sale and delivery of a fixed quantity of BTUs of LNG at
a price that reflects an LNG element derived from a basket of Indonesian crude
oil prices that is recalculated monthly. A transportation charge is added to
the LNG element under all contracts except for the 1981 Sales Contract and
Extension, the Train F Sales Contract, the Korea II Sales Contract, a portion
of the Korea Medium Term Sales Contract and the Badak V Sales Contract, where
the buyers bear the risk of loss during shipment and the transportation costs.
In those instances where the seller bears the risk of loss during shipment, the
cargoes are insured.

     The LNG to be delivered under the sales contracts is supplied from the LNG
Plant and, in some cases, from a separate facility at Arun in Sumatra (Arun
Plant). The Joint Venture does not supply gas to the Arun Plant or have any
interest in revenues from the sale of its products. The allocation of contract
quantities between the LNG Plant and the Arun Plant is determined by Pertamina.
All deliveries under the 1981 Sales Contract and Extension, the Taiwan Sales
Contract, the Train F Sales Contract, the 1973 Sales Contract Extension, the
Badak V Sales Contract and the Badak VI Sales Contract are or will be
exclusively supplied by the LNG Plant.

     In April of 1996, Pertamina and the East Kalimantan producers reached
final agreement on the Package VI revenue sharing percentage. The Joint Venture
PSC's interest is 16.5 percent. The 1981 Sales Contract Extension is an
eight-year extension contract, the first five

                                      -14-

<PAGE>   16



years of which will be at the Package VI Joint Venture PSC rate of 16.5
percent. The remaining three years will be at a Package VII rate which has not
yet been determined by Pertamina and is not expected before 1999. It is
expected that this rate will be less than the Package VI rate of 16.5 percent.

     The Badak V Sales Contract between Pertamina and Korea Gas Corporation and
the Badak VI Sales Contract between Pertamina and Chinese Petroleum Corporation
were both executed in 1995 and are twenty-year supply contracts. The first two
years of each contract are supplied at the Package V rate of 21.6 percent; the
remaining eighteen years will be supplied at the Package VI rate of 16.5
percent. Revenues from these two sales contracts will be the primary source of
repayment for the Train H financing.

     The final year of the 1973 Sales Contract extension will be supplied at a
Package VII rate. This rate has not yet been determined by Pertamina and is not
expected before 1999. It is expected that this rate will be less than the
Package VI rate.

     During the years ended 1996, 1995 and 1994, sales to Osaka Gas Co., Ltd.,
The Kansai Electric Power Co. Inc., and The Chubu Electric Power Co., Inc. each
individually accounted for more than 10 percent of the Company's total
revenues.

     Other Gas Sales - The Joint Venture is obligated until 2008 to supply
approximately 74 MMCF of gas per day to three local fertilizer plants at a
price of $1.00 per MMBTU subject to a pipeline tariff. In addition, the Joint
Venture is required to supply approximately 5 MMCF per day of gas to the
Balikpapan refinery at a price of $1.49 per MMBTU. In 1994, Pertamina executed
a twenty-year contract, commencing in February of 1998, for the sale of
approximately 70 MMCF per day of gas to be supplied by the Joint Venture to a
local methanol plant at a price not less than $1.25 per MMBTU for the first ten
years.

MARKETING AND DISTRIBUTION OF LPG

     Pertamina has individual contracts with seven Japanese utility companies
for the sale and delivery of LPG through the year 1998. The LPG facility at the
LNG Plant supplies approximately 800,000 metric tons per year under these
contracts. In 1996, 22 gross cargoes including spot sales, totaling 969,000
metric tons of LPG were shipped from the LNG Plant to Japan at an average
invoice price of $209.77 per metric ton. The Joint Venture was allocated a
Package IIIB sharing percentage for revenues from the first 401,000 metric tons
sold, a Package IV sharing percentage for revenues from the next 90,000 metric
tons sold, and a Package V sharing percentage for revenues from the remaining
478,000 metric tons sold during 1996, after deducting LPG-related operating
costs and debt service.


MARKETING OF OIL AND CONDENSATE

     Each party to the Joint Venture and Pertamina are entitled to take their
respective shares of oil and condensate in kind and to market such shares
separately. The Company, through affiliates of Ustar and

                                      -15-

<PAGE>   17



Unistar, markets its share of oil and condensate f.o.b. Santan Terminal,
in East Kalimantan, independently of Pertamina and the other Joint
Venture participants.  The Santan Terminal (operated by UNOCAL Indonesia
Ltd.) is used for storing and loading oil produced by the Joint Venture.

     The Company's share of the Joint Venture's oil and condensate, except for
that sold to Pertamina for Indonesian domestic consumption, is sold at the
applicable ICP for the grade of oil exported.

     Effective August 1, 1994, the Company has marketed for export two
segregated streams of crude oil, Badak Crude and Bontang Mix. In 1996, 88
percent of the Company's export sales were Bontang Mix, the balance of 12
percent being Badak. These crudes have individual ICPs. Since the inception of
segregated crude oil marketing in 1994, the ICPs have more closely mirrored
world market crude oil prices for each grade of crude oil sold.

     The sales price for the domestic market consumption is $0.20 per barrel
with respect to fields commencing production prior to February 23, 1989. For
fields commencing production after that date, domestic market consumption is
priced at 10 percent of the weighted average price of crude oil sold from such
fields. However, for the first sixty consecutive months of production from new
fields, domestic market consumption is priced at ICP. Domestic market sales
from the Semberah field, which commenced production in December 1991, were
priced at ICP until December 1996.

     Substantially all of the oil and condensate currently being produced by
the Joint Venture from the PSC area is being produced from the Badak, Nilam,
Mutiara and Semberah fields. Selected data pertaining to oil and condensate
sales for 1994 through 1996 appear below:

<TABLE>
<CAPTION>
                                             YEARS ENDED DECEMBER 31,
                                      --------------------------------------
                                      1996             1995             1994
                                      ----             ----             ----

<S>                                <C>              <C>              <C>       
Total Oil & Condensate
     Sales (barrels) (a)           25,155,246       21,739,437       22,635,461

Company's Oil & Condensate
     Sales (barrels) (b)            1,702,788        1,710,547        1,778,966

Company's Average Sales
     Price (per barrel) (b)     $       20.04      $     17.18       $    16.46

Average Production (Lifting)
     Cost (per barrel)          $        1.12      $      1.21       $     1.05
</TABLE>


(a)  Includes production attributable to other contractors' share of unitized
     operations in the Badak and Nilam fields. See "Exploration and
     Development".

(b)  Excludes domestic consumption sales.


                                      -16-

<PAGE>   18



COMPETITION AND RISKS

     Indonesian oil and LNG competes in the world market with oil and LNG
produced from other nations. Indonesia is a member of OPEC, and any
OPEC-imposed restrictions on oil or LNG exports in which Indonesia participates
could have a material adverse effect on the Company.

     In addition to the LNG being sold from the Arun Plant, LNG plants in the
Middle East, Australia, Malaysia, or elsewhere may provide competition for
sales of any additional Joint Venture LNG to Japanese and other markets, beyond
the amount under current contracts.

     The Joint Venture's activities in Indonesia are subject to risks common to
foreign operations in the oil and gas industry, including political and
economic uncertainties, the risks of cancellation or unilateral modification of
contract rights, operating restrictions, currency repatriation restrictions,
expropriation, export restrictions, increased taxes and other risks arising out
of foreign governmental sovereignty over areas in which the Joint Venture's
operations are conducted. The Company's foreign operations and investment may
also be subject to the laws and policies of the U. S. affecting foreign trade,
investment and taxation that could affect the conduct and profitability of
those operations.

     All of the Company's oil and gas activities are subject to the risks
normally incident to exploration for and production of oil and gas, including
blowouts, cratering, spills and fires, each of which could result in damage to
life and property. Production from the LNG Plant, which is the source of most
of the Company's revenues, is subject to the risks associated with maintaining
and operating a complex, technologically intensive processing plant, including
the risks of equipment failures, fire and explosion. To the extent that the
seller of the LNG produced by the LNG Plant bears the risk of loss of cargoes,
the seller is subject to the usual risks of maritime transportation, including
adverse incidents arising from loading and unloading cargoes. In accordance
with customary industry practices, the Company carries insurance against some,
but not all, of these risks. Losses and liabilities arising from such events
would reduce revenues and increase costs of the Company to the extent not
covered by insurance.

ITEM 2. PROPERTIES

     See Item 1. Business.

ITEM 3. LEGAL PROCEEDINGS

     The Company has pending litigation arising in the ordinary course of its
business. However, none of the litigation is expected to have a material
adverse effect on the Company's financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.


                                      -17-

<PAGE>   19



                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND SHAREHOLDER MATTERS

     Refer to Item 12 for a description of the Registrant's Equity. Refer to
Item 1 for a description of the Indonesian Participating Units.

ITEM 6. SELECTED FINANCIAL DATA

     The following financial data was derived from the audited consolidated
financial statements of the Company and should be read in conjunction with the
consolidated financial statements and related notes included elsewhere herein.

<TABLE>
<CAPTION>
                            1996   1995   1994   1993   1992
                            ----   ----   ----   ----   ----
                                 (millions of dollars)

<S>                         <C>    <C>    <C>    <C>    <C> 
Operating revenues          $253   $202   $198   $201   $206

Earnings before
 extraordinary item           51     40     36     30     24

Net earnings                  51     40     33     30     24

Total assets                 383    407    422    449    472

Debt and security subject
  to mandatory redemption    --     --     --      33     32
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

     Cash flow from operations amounted to $104 million in 1996, as compared to
$80 million in 1995. The increase resulted primarily from higher oil prices
combined with increased LNG volumes. Capital expenditures of $21 million were
primarily spent on continued development activities in the Badak, Nilam,
Mutiara and Semberah fields as was the case in 1995. Net distributions in 1996
to the partners from the Company were $83 million, $29 million greater than in
1995.

     In December of 1996, the VICO Board of Directors approved a plan to
consolidate the Balikpapan office into the Jakarta office and Badak field
office as a result of an ongoing business process reengineering effort. The
closing of the Balikpapan office will result in the elimination of a number of
positions and an anticipated reduction in the number of employees. A voluntary
early retirement program has been offered to all qualifying national employees.
The Company has included an accrual of approximately $1 million, net of cost
recovery, for its share of this plan. The Company also continues to maintain a
reserve and accrue interest for the potential exposure in a royalty dispute. At
December 31, 1996, the reserve approximated $7 million.

     The Company's ability to generate cash is primarily dependent on the
prices it receives for the sale of LNG, and to a lesser extent, the

                                      -18-

<PAGE>   20



sales of crude oil and LPG. In the event cash generated from operations is not
sufficient to meet capital investment and other requirements, any shortfall
will be funded through additional cash contributions by the partners. The
Company cannot predict with any degree of certainty the prices it will receive
in 1997 and future years for its crude oil, LNG and LPG. The Company's
financial condition, operating results and liquidity will be materially
affected by any significant fluctuations in sales prices.

     LNG sales are made under six principal long-term contracts and several
short- and medium-term contracts with Japanese, South Korean and Taiwanese
industrial and utility companies. The long-term contracts contain take-or-pay
provisions that generally require that the purchasers either take the
contracted quantities or pay for such quantities if not taken; such provisions
tend to support the Company's ability to generate cash. During 1996, 140 net
equivalent cargoes were shipped, of which 127 were under these long-term
contracts (1995, 131 and 121 respectively).

     Through the culmination of its supply agreements with Pertamina, 1996 was
a peak gas demand year for the Joint Venture. The Joint Venture's equity
interest in sales agreements is based on its share of gas reserves available
for commitment. This equity interest has declined over time due to the
increased participation of other production sharing contractors in the more
recent supply agreements. Absent the discovery of significant additional gas
reserves in the Joint Venture PSC area, the Joint Venture's participation in
future sales will continue to decline.

     The Joint Venture's share of LNG shipments in 1997 is expected to decline
by approximately 15 percent as compared to 1996, due to the phase-out of the
original 1973 Sales Contract in which the Joint Venture has a higher revenue
sharing interest. A further decline in the Joint Venture's share of LNG
shipments is expected in 1998. In 1997, the Company anticipates the shipping of
approximately 117 net equivalent cargoes.

     A seventh processing train (Train G) is being constructed at the LNG plant
to produce the LNG required for the LNG sales contracts in Package V. In
addition to the processing train, a third LNG/LPG dock, an additional LPG
storage tank and other support facilities are being constructed at the LNG
Plant. Project financing was for the amount of $970 million, of which $429
million was drawn down as of December 31, 1996. The financing is repayable over
ten years in graduated quarterly payments commencing in the fourth quarter of
1998. At December 31, 1996, the overall progress of the Train G project
engineering, procurement and construction was 81.5 percent. Completion of the
project is scheduled for late 1997. Financing for Train G is nonrecourse to
both Pertamina and the Joint Venture.

     In March 1997, a $1,127 million financing was signed for the eighth train
(Train H), an additional LNG storage tank, an additional natural gas pipeline
from the Badak field to the LNG Plant, and a debottlenecking project for Trains
A through F. The financing provides for initial advances of up to $150 million,
with further advances being conditioned upon the execution and delivery of the
marine transportation

                                      -19-

<PAGE>   21



agreement associated with the Badak VI Sales Contract. Construction is expected
to begin in 1997. Revenues from the Badak V Sales Contract with Korea Gas
Corporation and the Badak VI Sales Contract with Chinese Petroleum Corporation
will be the primary sources of repayment for this financing.

     Capital expenditures of the Joint Venture relate to the exploration and
development of the oil and gas fields. In 1997, the Company's share of the
Joint Venture expenditures is expected to total $52 million, including $6
million of exploration expenditures and $26 million of development
expenditures. The 1997 budgeted expenditures reflect continued development
activities to maintain gas deliverability and a seismic and exploration program
that provides for the drilling of several wells.

     The Company can give no assurance as to the future trend of its business
and earnings, or as to future events and developments that could affect the
Company in particular or the oil industry in general. These include such
matters as environmental quality control standards, new discoveries of
hydrocarbons and the demand for petroleum products. Furthermore, the Company's
business could be profoundly affected by future events including price changes
or controls, payment delays, increased expenditures, legislation and
regulations affecting the Company's business, expropriation of assets,
renegotiation of contracts with foreign governments or customers, political
instability, currency exchange and repatriation losses, taxes, litigation, the
competitive environment and international economic and political developments
including actions of members of OPEC.

     The Company's revenues are predominately based on the market price of
crude oil, which is denominated in U. S. dollars. Certain operating costs,
taxes and capital costs represent commitments settled in foreign currency.
Currency exchange rate fluctuations on transactions in currencies other than U.
S. dollars are recognized as adjustments to the U. S. dollar cost of the
transaction.

     The Company is unaware of any unrecorded environmental claims as at
December 31, 1996 which would have a material impact upon the Company's
financial condition or operations.

     The discussion of the Company's business and operations in this report
includes in several instances forward-looking statements, which are based upon
management's good faith assumptions relating to the financial, market,
operating and other relevant environments that will exist and affect the
Company's business and operations in the future. No assurance can be made that
the assumptions upon which management based its forward-looking statements will
prove to be correct, or that the Company's business and operations will not be
affected in any substantial manner by other factors not currently foreseeable
by management or beyond the Company's control. All forward-looking statements
involve risks and uncertainty, including those described in this report, and
such statements shall be deemed in the future to be modified in their entirety
by the Company's public pronouncements, including those contained in all future
reports and other documents filed by the Company with the Securities Exchange
Commission.


                                     -20-

<PAGE>   22



RESULTS OF OPERATIONS

1996 COMPARED TO 1995

     Net earnings for the year ended December 31, 1996 were $51 million as
compared to $40 million for the year ended December 31, 1995. Net earnings for
1996 benefitted from increased oil and gas revenues, partially offset by higher
depletion and exploration costs. Cash flow from operations for the year ended
December 31, 1996 was $104 million as compared to $80 million for the year
ended December 31, 1995.

     Revenues for the year ended December 31, 1996 were $253 million compared
to $202 million in the prior year. The increase in revenues was attributable to
increased prices received for LNG and crude oil sales in addition to increased
LNG volumes. The Joint Venture PSC's share of LNG volumes in 1996 increased 27
trillion BTUs to 413 trillion BTUs (140 net equivalent cargoes) as compared to
386 trillion BTUs (131 net equivalent cargoes) in 1995. The increase in LNG
volumes was due to higher contractual commitments during 1996. Crude oil and
condensate volumes (excluding domestic consumption) net to the Company in both
1996 and 1995 were 1.7 million barrels.

     The average price received for LNG in 1996 increased $0.48 per million
BTUs to $3.15 per million BTUs as compared to $2.67 per million BTUs in 1995.
The average price received for crude oil increased $2.86 per barrel to $20.04
per barrel in 1996 as compared to $17.18 per barrel in 1995.

     The table below summarizes the volumes and average prices for the
Company's share of PSC LNG sales as well as the Company's crude oil sales
(excluding domestic consumption) for the years ended December 31, 1996 and
1995:

<TABLE>
<CAPTION>
                                   1996    1995
                                   ----    ----
<S>                                <C>     <C> 
Volumes
    LNG (tbtus)                    95.5    89.3
    Oil & Condensate (mmbbls)       1.7     1.7
Prices
    LNG ($/mmbtu)                   3.15    2.67
    Oil ($/bbl)                    20.04   17.18
</TABLE>


     Production costs of $24 million for 1996 decreased slightly as compared to
the prior year. Depletion, depreciation and amortization for 1996 was $47
million, an increase of $5 million, reflecting the record level of production
attained in 1996.

     Exploration costs increased by $1 million in 1996 as compared to the prior
year due to an expanded seismic program. During 1996, the Company drilled no
exploration wells.

     General and administrative expenses for 1996 decreased slightly from the
prior year.

     The effective tax rates for 1996 and 1995 were 71 percent and 70 percent,
respectively. These rates were the aggregate of Indonesian source income taxed
at a 56 percent rate, and certain expenses

                                      -21-

<PAGE>   23



attributable to the Company's activities which are not deductible in the
partnership for Indonesian tax purposes.


RESULTS OF OPERATIONS

1995 COMPARED TO 1994

     Net earnings for the year ended December 31, 1995 were $40 million as
compared to $33 million for the year ended December 31, 1994. Included in the
1994 results was an extraordinary loss of $3 million for the redemption of its
8-1/4 percent debentures. Net earnings for 1995 benefitted from increased oil
and gas revenues, lower depletion and exploration costs, partially offset by
higher production costs. Cash flow from operations for the year ended December
31, 1995 was $80 million as compared to $86 million for the year ended December
31, 1994.

     Revenues for the year ended December 31, 1995 were $202 million compared
to $198 million in the prior year. The increase in revenues was attributable to
increased average prices received for LNG and crude oil sales, partially offset
by decreased LNG and crude oil volumes. The Joint Venture PSC's share of LNG
volumes in 1995 decreased 18 trillion BTUs to 386 trillion BTUs (131 net
equivalent cargoes) as compared to 404 trillion BTUs (138 net equivalent
cargoes) in 1994. The decrease in LNG volumes was due to lower contractual
commitments during 1995. Crude oil and condensate volumes (excluding domestic
consumption) net to the Company in 1995 and 1994 were 1.7 million barrels and
1.8 million barrels respectively.

     The average price received for LNG in 1995 increased $0.15 to $2.67 per
million BTUs as compared to $2.52 per million BTUs in 1994. The realized crude
oil price increased $0.72 per barrel to $17.18 per barrel in 1995 as compared
to $16.46 per barrel in 1994.

     The table below summarizes the volumes and average prices for the
Company's share of PSC LNG sales as well as the Company's crude oil sales
(excluding domestic consumption) for the years ended December 31, 1995 and
1994:

<TABLE>
<CAPTION>
                                     1995    1994
                                     ----    ----
<S>                                  <C>     <C> 
Volumes
    LNG (tbtus)                      89.3    93.4
    Oil and Condensate (mmbbls)       1.7     1.8
Prices
    LNG ($/mmbtu)                     2.67    2.52
    Oil ($/bbl)                      17.18   16.46
</TABLE>

         Production costs for 1995 increased $5 million to $25 million as
compared to the prior year, due in part to higher workover costs and an
increased reserve for obsolete inventory. Depletion, depreciation and
amortization for 1995 was $42 million, a decrease of $9 million, reflecting the
lower levels of production and the year's effect of reserve additions which
occurred during the fourth quarter of 1994.

         Exploration costs decreased by $3 million in 1995 as compared to the
prior year due to lower seismic costs and the absence of exploratory

                                      -22-

<PAGE>   24



drilling. During 1995, the Company drilled no exploration wells, whereas two
exploration wells were drilled in 1994, including one discovery.

     General and administrative expenses decreased slightly from the prior
year.

     The effective tax rates for both 1995 and 1994 were 70 percent. These
rates were the aggregate of Indonesian source income taxed at a 56 percent
rate, and certain expenses attributable to the Company's activities which are
not deductible in the partnership for Indonesian tax purposes.

     Effective September 30, 1995, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." This SFAS
requires that an impairment loss be recognized whenever the carrying amount of
an asset exceeds the sum of the estimated future cash flows (undiscounted) of
the asset. Under SFAS No. 121, the Company performed its impairment review of
proved oil and gas properties on a production sharing contract basis. The
adoption of SFAS No. 121 had no impact on the consolidated financial statements
of the Company.


                                      -23-

<PAGE>   25



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                          INDEPENDENT AUDITORS' REPORT


To The Partners of Unimar Company

We have audited the accompanying consolidated balance sheets of Unimar Company
and subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of earnings, cash flows, and partners' capital for the two years
ended December 31, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

As more fully described in the notes to consolidated financial statements, the
Company has material transactions with its partners and affiliates.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Unimar
Company and subsidiaries at December 31, 1996 and 1995, and the consolidated
results of their operations and their cash flows for the two years ended
December 31, 1996, in conformity with generally accepted accounting principles.


                                       KPMG Peat Marwick LLP






Houston, Texas
February 26, 1997



                                      -24-

<PAGE>   26



                         REPORT OF INDEPENDENT AUDITORS


To The Partners of Unimar Company

We have audited the consolidated balance sheet of Unimar Company and
subsidiaries as of December 31, 1994 and the related consolidated statements of
earnings, cash flows, and partners' capital for the year then ended. The
consolidated balance sheet as of December 31, 1994 is not presented separately
herein. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

As more fully described in the notes to consolidated financial statements, the
Company has material transactions with its partners and affiliates.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Unimar
Company and subsidiaries at December 31, 1994, and the consolidated results of
their operations and their cash flows for the year then ended, in conformity
with generally accepted accounting principles.


                                       ERNST & YOUNG LLP






Houston, Texas
February 24, 1995



                                      -25-

<PAGE>   27



                        UNIMAR COMPANY AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1996 AND 1995
                             (THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
                                                             1996          1995
                                                             ----          ----

<S>                                                       <C>          <C>       
ASSETS
Current assets:
     Cash and cash equivalents                            $    3,274   $    4,882
     Accounts receivable                                      13,943        7,415
     Inventories                                               8,177        9,839
     Other current assets                                      2,951        3,372
                                                          ----------   ----------

       Total current assets                                   28,345       25,508

Property, plant and equipment, at cost:
     Oil and gas properties (successful efforts method)    1,070,819    1,049,708
     Other                                                     2,287        2,264
                                                          ----------   ----------
                                                           1,073,106    1,051,972

     Less: accumulated depreciation and depletion            720,976      673,543
                                                          ----------   ----------
           Net property, plant and equipment                 352,130      378,429

Other assets                                                   3,002        3,277
                                                          ----------   ----------

                                                          $  383,477   $  407,214
                                                          ==========   ==========

LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
     Accounts payable                                     $    1,043   $    2,394
     Advances from joint venture partners                      1,234        2,777
     Accrued liabilities                                      17,892       14,595
     Income and other taxes                                   19,924       11,697
                                                          ----------   ----------

       Total current liabilities                              40,093       31,463

     Deferred income taxes                                   154,087      158,364
     Other liabilitie                                         14,859       12,321

Partners' capital                                            254,438      285,066
     Less: demand notes receivable                            80,000       80,000
                                                          ----------   ----------
                                                             174,438      205,066
                                                          ----------   ----------

Commitments and Contingencies
                                                          $  383,477   $  407,214
                                                          ==========   ==========
</TABLE>


See accompanying Notes to Consolidated Financial Statements.

                                      -26-

<PAGE>   28



                        UNIMAR COMPANY AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF EARNINGS
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
                             (THOUSANDS OF DOLLARS)


<TABLE>
<CAPTION>
                                              1996          1995         1994
                                              ----          ----         ----


<S>                                        <C>          <C>          <C>      
Oil and gas production revenues            $ 252,653    $ 202,019    $ 197,925

Production costs                              24,404       24,749       19,623
Depletion, depreciation and amortization      47,156       41,717       50,554
Exploration costs including dry holes          1,045          102        2,787
                                           ---------    ---------    ---------

Operating profit                             180,048      135,451      124,961


General and administrative expenses            1,361        1,460        1,923
Interest expense                                  76           54           55
Interest income                                 (305)        (313)        (274)
Other (income) expense                          (213)        (172)         624
                                           ---------    ---------    ---------


Earnings before income taxes and
  extraordinary item                         179,129      134,422      122,633

Income tax expense (benefit)
  Current                                    131,992       98,883       90,661
  Deferred                                    (4,277)      (4,602)      (4,240)
                                           ---------    ---------    ---------
                                             127,715       94,281       86,421
                                           ---------    ---------    ---------


Earnings before extraordinary item            51,414       40,141       36,212

Extraordinary loss on redemption of debt        --           --          3,108
                                           ---------    ---------    ---------

Net earnings                               $  51,414    $  40,141    $  33,104
                                           =========    =========    =========
</TABLE>


See accompanying Notes to Consolidated Financial Statements.


                                      -27-

<PAGE>   29



                        UNIMAR COMPANY AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
                             (THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
                                                                            1996        1995          1994
                                                                            ----        ----          ----

<S>                                                                      <C>          <C>          <C>      
Net earnings                                                             $  51,414    $  40,141    $  33,104

Adjustments to reconcile to net cash provided by operating activities:
       Loss on extraordinary item                                             --           --          3,108
       Depletion, depreciation and amortization                             47,434       42,044       50,889
       Deferred income taxes                                                (4,277)      (4,602)      (4,240)
       Exploratory dry hole costs                                             --             (6)       2,635
       Loss on sale of assets                                                    2         --            710
       (Increase) Decrease in operating
         receivables                                                        (6,528)      (1,533)       5,722
       (Increase) Decrease in inventories                                    1,662        2,628       (1,581)
       Increase (Decrease) in operating payables
         and accruals                                                        2,604         (142)       5,482
       Increase (Decrease) in other operating
         assets and liabilities                                             11,461        1,890      (10,215)
                                                                         ---------    ---------    ---------
Net cash provided by operating activities                                  103,772       80,420       85,614
                                                                         ---------    ---------    ---------

Investment activities:
       Capital expenditures                                                (21,138)     (26,307)     (34,399)
       Proceeds from sale of assets                                              1         --            382
                                                                         ---------    ---------    ---------
Net cash used in investing activities                                      (21,137)     (26,307)     (34,017)
                                                                         ---------    ---------    ---------

Financing activities:
       Capital contributions                                                22,200       36,200       65,800
       Capital distributions                                              (104,900)     (90,000)     (83,900)
       Debt repaid                                                            --           --        (36,400)
                                                                         ---------    ---------    ---------
Net cash used in financing activities                                      (82,700)     (53,800)     (54,500)
                                                                         ---------    ---------    ---------

Increase (Decrease) in advances from joint
  venture partners                                                          (1,543)       1,148       (1,960)
                                                                         ---------    ---------    ---------

Net increase (decrease) in cash and
  cash equivalents                                                          (1,608)       1,461       (4,863)

Cash and cash equivalents at beginning
  of year                                                                    4,882        3,421        8,284
                                                                         ---------    ---------    ---------

Cash and cash equivalents at end of year                                 $   3,274    $   4,882    $   3,421
                                                                         =========    =========    =========

Supplemental cash flow disclosure:

IPU distributions paid                                                   $  23,713    $  19,617    $  18,539
                                                                         =========    =========    =========

Interest paid                                                            $      70    $      46    $     331
                                                                         =========    =========    =========

Income taxes paid                                                        $ 123,764    $  98,512    $  94,174
                                                                         =========    =========    =========
</TABLE>

See accompanying Notes to Consolidated Financial Statements.

                                      -28-


<PAGE>   30



                        UNIMAR COMPANY AND SUBSIDIARIES

            CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
                             (THOUSANDS OF DOLLARS)



<TABLE>
<CAPTION>
                                        USTAR        UNISTAR       TOTAL

<S>                                   <C>          <C>          <C>      
Balance, January 1, 1994              $ 135,784    $ 147,043    $ 282,827

Contributions                            32,900       32,900       65,800

Cash distributions                      (41,950)     (41,950)     (83,900)

ENSTAR pension liability adjustment         208          209          417

Net earnings                             16,552       16,552       33,104
                                      ---------    ---------    ---------

Balance, December 31, 1994              143,494      154,754      298,248

Contributions                            18,100       18,100       36,200

Cash distributions                      (45,000)     (45,000)     (90,000)

ENSTAR pension liability adjustment         239          238          477

Net earnings                             20,071       20,070       40,141
                                      ---------    ---------    ---------

Balance, December 31, 1995              136,904      148,162      285,066

Contributions                            11,100       11,100       22,200

Cash Distributions                      (52,450)     (52,450)    (104,900)

ENSTAR pension liability adjustment         329          329          658

Net earnings                             25,707       25,707       51,414
                                      ---------    ---------    ---------

Balance, December 31, 1996            $ 121,590    $ 132,848    $ 254,438
                                      =========    =========    =========
</TABLE>



See accompanying Notes to Consolidated Financial Statements.


                                      -29-

<PAGE>   31



                        UNIMAR COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
              (in thousands of dollars unless otherwise indicated)

(1)      THE COMPANY

         Unimar Company (the Company) is a general partnership organized under
         the Texas Uniform Partnership Act, whose partners are Unistar, Inc.
         (Unistar), a Delaware corporation and a direct subsidiary of Union
         Texas Petroleum Holdings, Inc. (UTPH), a publicly traded Delaware
         corporation, and LASMO (Ustar), Inc. (Ustar), a Delaware corporation
         and an indirect wholly-owned subsidiary of LASMO plc (LASMO), a public
         limited company organized under the laws of England. Each partner
         shares equally in the Company's net earnings, distributions and
         capital contributions.


(2)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (a)      Basis of Presentation

                  The Company's consolidated financial statements include the
                  accounts of the Company and its subsidiaries including its
                  proportionate share of the activities of an Indonesian joint
                  venture (the Joint Venture). All significant intercompany
                  accounts and transactions have been eliminated.

         (b)      Use of Estimates

                  The preparation of financial statements in conformity with
                  generally accepted accounting principles requires management
                  to make estimates and assumptions that affect the reported
                  amounts of assets and liabilities and disclosure of
                  contingent assets and liabilities at the date of the
                  financial statements and the reported amounts of revenues and
                  expenses during the reporting period. Actual results could
                  differ from those estimates.

         (c)      Inventories

                  Inventories primarily consist of materials and supplies and
                  are generally priced at the lower of cost (moving average
                  cost method) or net realizable value.

         (d)      Accounting for Oil and Gas Properties

                  Oil and gas exploration, development and production
                  activities are accounted for under the successful efforts
                  method of accounting. Under this method of accounting, the
                  cost of acquiring undeveloped oil and gas leasehold acreage,
                  including lease bonuses, brokers' fees and other related
                  costs are capitalized. Provisions for impairment of
                  undeveloped oil and gas leases are based on periodic
                  evaluation and exploratory experience. Costs to drill and
                  equip wells that


                                      -30-

<PAGE>   32


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)

         (d)      Accounting for Oil and Gas Properties (continued)

                  find proved reserves are capitalized while costs associated
                  with unsuccessful exploratory wells are expensed. Other
                  exploratory expenditures, including geological and
                  geophysical costs and annual lease rentals are expensed as
                  incurred. Costs incurred to drill and equip productive wells,
                  including development dry holes and related production
                  facilities are capitalized.

                  Depreciation, depletion, and amortization of successful oil
                  and gas exploration wells and all development costs are
                  determined under the unit-of-production method based on
                  estimated recoverable proved developed reserves. Leasehold
                  costs of producing properties are depleted on the
                  unit-of-production method based on estimated proved developed
                  and undeveloped reserves.

                  The Company generally provides for depreciation of other
                  property, plant and equipment on a straight-line method over
                  the estimated useful life of the assets.

                  Effective September 30, 1995, the Company adopted Statement
                  of Financial Accounting Standards ("SFAS") No. 121,
                  "Accounting for the Impairment of Long-Lived Assets and for
                  Long-Lived Assets to Be Disposed Of." This SFAS requires that
                  an impairment loss be recognized whenever the carrying amount
                  of an asset exceeds the sum of the estimated future cash
                  flows (undiscounted) of the asset. Under SFAS No. 121, the
                  Company performed its impairment review of proved oil and gas
                  properties on a production sharing contract basis. The
                  adoption of SFAS No. 121 had no impact on the consolidated
                  financial statements of the Company.

         (e)      LNG Revenue Recognition

                  The Company recognizes its share of liquefied natural gas
                  (LNG) revenues net of Pertamina's plant operating costs,
                  transportation charges and project debt service. The Company
                  is not a party to any gas balancing arrangements.

         (f)      Income and Other Taxes

                  The Company is a partnership and, therefore, does not pay
                  income taxes. Since the Company's subsidiaries are
                  corporations, income taxes included in the accompanying
                  financial statements represent the domestic and foreign taxes
                  applicable to such entities.




                                      -31-

<PAGE>   33


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)

         (f)      Income and Other Taxes (continued)

                  The Company's subsidiary, ENSTAR Corporation (ENSTAR), and
                  its subsidiaries file a consolidated federal corporate income
                  tax return.

                  Certain income and expense items are recorded during
                  different periods for financial statement and income tax
                  purposes. Deferred income taxes are provided for these
                  differences.

                  The Company applies the asset and liability method in
                  accounting for income taxes. Under this method, deferred tax
                  assets and liabilities are determined based on differences
                  between financial reporting and tax bases of assets and
                  liabilities and are measured using the enacted tax rates and
                  laws that will be in effect when the differences are expected
                  to reverse. An impairment evaluation, with reserves recorded
                  as necessary for any tax benefit not expected to be realized,
                  is required of deferred tax assets. A current tax expense or
                  benefit is recognized for estimated taxes payable or
                  refundable on tax returns for the current year. The effect on
                  deferred tax assets and liabilities of a change in tax rates
                  is recognized in income in the period that includes the
                  enactment date.

         (g)      Concentrations of Credit Risk

                  Financial instruments which may subject the Company to
                  concentrations of credit risk consist principally of
                  short-term investments and trade receivables. The Company's
                  excess cash is invested in time deposits with major banks.
                  These deposits are purchased at a maturity of three months or
                  less, and have minimal risk.

                  The Company's receivables consist primarily of the revenues
                  derived from the sale of LNG under long-term contracts with
                  utility and industrial companies in Japan, Taiwan and Korea.
                  The buyers of the LNG make payment in United States dollars
                  to a U.S. bank as trustee for the Joint Venture and other
                  parties. The trustee, after deducting plant operating costs,
                  transportation charges and project debt service from the
                  gross LNG sales proceeds, distributes the net proceeds to the
                  Joint Venture participants and other parties. The Company's
                  trade receivables at December 31, 1996 result principally
                  from sales of LNG, LPG and oil and are considered current and
                  collectible, and collateral is not required to secure such
                  receivables.


                                      -32-

<PAGE>   34


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)

         (g)      Concentrations of Credit Risk  (continued)

                  During the years ended 1996, 1995 and 1994, LNG sales to
                  Osaka Gas Co., Ltd., The Kansai Electric Power Co., Inc., and
                  The Chubu Electric Power Co., Inc. individually accounted for
                  more than 10 percent of the Company's total revenues.

         (h)      Fair Value of Financial Instruments

                  The Company has various types of financial instruments
                  consisting of cash and cash equivalents, accounts receivable,
                  other current assets, accounts payable, advances from joint
                  venture partners and accrued liabilities. The carrying amount
                  approximates fair value because of the short maturity of
                  these instruments.

         (i)      Foreign Currency

                  The functional currency for translating the accounts of
                  foreign subsidiaries is the U. S. dollar.  Transaction gains
                  and losses resulting from the effect of exchange rate
                  fluctuations on transactions in currencies other than the
                  functional currency are included in the determination of net
                  earnings.

(3)      INDONESIAN OIL AND GAS PROPERTIES

         The Company, through its subsidiaries, has a 23.125 percent interest
         in, and is the operator of, the Joint Venture that has certain oil and
         gas exploration and production rights in Indonesia through a
         Production Sharing Contract (PSC) which was amended and extended in
         1990 until August 7, 2018 with Pertamina, the state petroleum
         enterprise of the Republic of Indonesia. In addition, other
         subsidiaries of UTPH and LASMO each own a 26.25 percent interest in
         the Joint Venture.

         Virginia Indonesia Company (VICO), a subsidiary of the Company, is the
         operator of the Joint Venture and is responsible for conducting
         exploration and development activities within the PSC area. The cost
         of such activities is funded by the Joint Venture partners to VICO. In
         addition to operating management responsibility, the operator acts as
         a custodian of Joint Venture cash received from its partners until
         disbursed in payment of operating and capital expenditures. At
         December 31, 1996 and 1995, cash and cash equivalents included $1,234
         and $2,777, respectively, advanced from the other Joint Venture
         partners.






                                      -33-

<PAGE>   35


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)

(3)      INDONESIAN OIL AND GAS PROPERTIES (continued)

         The PSC permits the Joint Venture to recover their costs of
         exploration, development and production - including general and
         administrative expenses - from oil and gas revenues as follows:
         capital costs are based on recoverable double-declining balance
         depreciation over various useful lives, which average fourteen years;
         non-capital costs are recovered in the year incurred.

         The Joint Venture, and thus the Company, has no ownership interest in
         oil and gas reserves and related assets, but rather receives revenues
         from the sale of oil, condensate, liquefied petroleum gas (LPG) and
         LNG in accordance with the PSC. The Joint Venture is required to sell
         8.5 percent (7.2 percent after August 7, 1998) of the total oil and
         condensate production from the contract area for Indonesian domestic
         consumption. Such amounts were purchased for domestic use in 1996,
         1995 and 1994. The sales price for the domestic market consumption is
         $0.20 per barrel with respect to fields commencing production prior to
         February 23, 1989. For fields commencing production after that date,
         domestic market consumption is priced at 10 percent of the weighted
         average price of crude oil sold from such fields. However, for the
         first sixty consecutive months of production from new fields, domestic
         market consumption is priced at the official Indonesian Crude Price
         (ICP). The Semberah field which commenced production in December 1991
         was exempt from the domestic obligation pricing until December 1996.

         The share of revenues from the sale of gas after cost recovery through
         August 7, 1998 will remain at 35 percent to the Joint Venture after
         Indonesian income taxes and 65 percent to Pertamina. The split after
         August 7, 1998 will be 25 percent to the Joint Venture after
         Indonesian income taxes and 75 percent to Pertamina for gas sales
         under the 1973 LNG Sales Contract, the 1981 LNG Sales Contract and
         extension, Korean carryover quantities and the seven 1986 liquefied
         petroleum gas (LPG) Sales Contracts to the extent that the gas to
         fulfill these contracts is supplied from the Badak or Nilam fields.
         For the gas used to fulfill the eleven-year extension (2000 - 2010) to
         the 1973 LNG Sales Contract that is supplied from the Badak or Nilam
         fields, 41.655 percent of such gas shall be split 25 percent to the
         Joint Venture after Indonesian income taxes and 75 percent to
         Pertamina with the remaining gas supplying this extension to be split
         30 percent to the Joint Venture after Indonesian income taxes and 70
         percent to Pertamina. All other LNG sales contract revenues after
         August 7, 1998 will be split 30 percent after Indonesian income taxes
         to the Joint Venture and 70 percent to Pertamina.

                                      -34-

<PAGE>   36


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)

(3)      INDONESIAN OIL AND GAS PROPERTIES (continued)

         Based on current and projected oil production, the revenue split from
         oil sales after cost recovery through August 7, 2018 will remain at 15
         percent to the Joint Venture after Indonesian income taxes and 85
         percent to Pertamina. These revenue splits are based on Indonesian
         income taxes of 56 percent through August 7, 1998, and 48 percent
         thereafter.

         Pertamina currently sells LNG to Japanese, Korean and Taiwanese
         utility and industrial customers primarily under six long-term
         contracts that expire in 1999, 2003, 2009, 2013, 2014 and 2015,
         respectively. Contracted sales of LNG to these customers approximated
         75 percent, 73 percent, and 72 percent of the Company's gross revenues
         in 1996, 1995 and 1994, respectively.

         The Joint Venture's share in LNG volumes from the LNG plant is
         expected to decline in 1997 by about 15 percent as compared to 1996
         due to the phaseout of the original 1973 Sales Contract in which the
         Joint Venture has a high participation interest.

(4)      CASH AND CASH EQUIVALENTS

         At December 31, 1996 and 1995, cash and cash equivalents included
         short-term deposits and highly liquid debt instruments, purchased at a
         maturity with three months or less, of $3,274 and $4,882,
         respectively.

(5)      PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment is as follows:

<TABLE>
<CAPTION>
                                 1996         1995
                                 ----         ----

<S>                           <C>          <C>       
Oil and gas properties        $1,070,819   $1,049,708

Less: Accumulated depletion      719,285      672,130
                              ----------   ----------
                                 351,534      377,578
Other, net of accumulated
  depreciation of $1,691 in
  1996 and $1,413 in 1995            596          851
                              ----------   ----------

                              $  352,130   $  378,429
                              ==========   ==========
</TABLE>


                                      -35-

<PAGE>   37


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)

(6)      ACCRUED LIABILITIES

         As at December 31, 1996 and 1995, accrued liabilities consisted of:

<TABLE>
<CAPTION>
                                  1996      1995
                                  ----      ----

<S>                             <C>       <C>    
Accrued IPU liability           $ 8,641   $ 5,629
Indonesian operating accruals     8,976     7,937
Other                               275     1,029
                                -------   -------

                                $17,892   $14,595
                                =======   =======
</TABLE>


(7)      LEASES

         The Operator's minimum future rental payments required by year under
         operating leases that have initial or remaining noncancelable lease
         terms in excess of one year are:

<TABLE>
                   <S>                                      <C>     
                   1997                                     $  6,427
                   1998                                        4,355
                   1999                                          289
                   2000                                          261
                   Later years                                    22
                                                             -------

                   Total minimum payments required           $11,354
                                                             =======
</TABLE>

         The above commitments represent leases on the Joint Venture's U.S. and
         Indonesian offices, housing leases, and contract commitments with
         various suppliers which cover drilling services, geological services
         and office administrative functions, and are included net of estimated
         cost recovery.

         Rent expense, net of cost recovery, was $3,123, $2,269 and $4,553 in
         1996, 1995 and 1994 respectively. The Company charges its
         proportionate share of the Joint Venture's rent expense to operations
         for all operating leases.

         The above minimum future rental payments have not been reduced by
         future minimum sublease rentals of $1,244 due under non-cancelable
         subleases.

(8)      INCOME AND OTHER TAXES

         At December 31, 1996, the Company had investment tax credit carryovers
         of $2,066 that expire in 1997 through 2001, net foreign tax credit
         carryovers of $26,085 for regular tax purposes and $144,897 for
         alternative minimum tax purposes both of which expire in 1997 through
         2001.



                                      -36-

<PAGE>   38


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)

(8)      INCOME AND OTHER TAXES (continued)

         The Company has a minimum tax credit of $21,800 that carries forward
         indefinitely. Deferred tax assets of $26,085 and $32,324 for foreign
         tax credit carryforwards and $2,066 and $3,207 for investment tax
         credit carryforwards at December 31, 1996 and 1995, respectively, have
         been offset by a valuation allowance.

         Deferred income taxes reflect the net tax effects of temporary
         differences between the carrying amounts of assets and liabilities for
         financial reporting purposes and the amounts used for income tax
         purposes. Significant components of the Company's deferred tax
         liabilities as of December 31, 1996 and 1995 are as follows:

<TABLE>
<CAPTION>
                                                      1996        1995
                                                      ----        ----

         <S>                                        <C>        <C>     
          Deferred tax liabilities:

           Oil and gas proven property costs
            capitalized for financial purposes
            and deducted for foreign tax purposes   $154,087   $158,364
                                                    ========   ========
</TABLE>



              For financial reporting purposes, income before income taxes
              includes the following components:

<TABLE>
<CAPTION>
                                    1996          1995         1994
                                    ----          ----         ----

         <S>                      <C>          <C>          <C>       
          Pretax income/(loss):
            U. S                  $  (1,403)   $  (1,402)   $  (2,423)
            Foreign                 180,532      135,824      125,056
                                  ---------    ---------    ---------

                                  $ 179,129    $ 134,422    $ 122,633
                                  =========    =========    =========
</TABLE>


              Significant components of the provision for income taxes
              attributable to continuing operations are as follows:

<TABLE>
<CAPTION>
                            1996         1995         1994
                         ---------    ---------    ---------

<S>                      <C>          <C>          <C>      
          Current:
               Federal   $   3,686    $   3,050    $   2,884
               Foreign     128,306       95,833       87,777
                         ---------    ---------    ---------
                           131,992       98,883       90,661
                         ---------    ---------    ---------

          Deferred:
               Foreign      (4,277)      (4,602)      (4,240)
                         ---------    ---------    ---------

                         $ 127,715    $  94,281    $  86,421
                         =========    =========    =========
</TABLE>




                                      -37-

<PAGE>   39


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)

(8)      INCOME AND OTHER TAXES (continued)

         The reconciliation of income tax attributable to earnings before
         extraordinary item computed at the U.S. federal statutory rates to
         income tax expense is:


<TABLE>
<CAPTION>
                                        1996      1995      1994
                                       ------    ------    ------


         <S>                             <C>       <C>       <C>  
          Tax at U.S. Statutory Rate     35.0%     35.0%     35.0%

          Foreign statutory tax rate
            in excess of federal
            statutory tax rate           21.0%     21.0%     21.0%

          Expenses not deductible in
            calculating Indonesian
            taxes                        12.8%     11.2%     11.0%

          U.S. taxes related to
            foreign operations            2.1%      2.3%      2.4%

          Other                           0.4%      0.6%      1.1%
                                       ------    ------    ------

          Total                          71.3%     70.1%     70.5%
                                       ======    ======    ======
</TABLE>




                                      -38-

<PAGE>   40


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)

(9)           INDONESIAN PARTICIPATING UNITS (IPUs)

              The IPUs were issued, with no assigned value, in connection with
              the acquisition of ENSTAR in 1984 and represent a general
              obligation of the Company to make quarterly participation
              payments until September 25, 1999, at which time the IPUs will
              expire with no residual value. The amount of each quarterly
              participation payment will be measured by a fixed percentage of
              Net Cash Flow (as defined below) from the Joint Venture. While
              the amount of the Participation Payments, which are treated as
              reductions from revenues, will vary quarter to quarter depending
              upon the amount of Net Cash Flow, payment of the amounts due to
              the IPU holders is an obligation of the Company, not dependent
              upon the discretion of the partners of the Company. The rights of
              the IPU holders are those of a general creditor of the Company
              and thus the IPU holders have no equity interest in the Company
              in the nature of a general or limited partnership interest or
              otherwise. The IPU holders derive no economic benefit from the
              business activities of the Company other than the Joint Venture.

              Each IPU entitles the holder to receive, until September 25,
              1999, a quarterly participation payment equal to 1/14,077,747 of
              32 percent of net positive cash flow. Net Cash Flow, attributable
              to IPU holders, is equal to the product of (I) a fraction, the
              numerator of which is equal to the number of IPUs outstanding on
              the last business day of such quarterly period, and the
              denominator of which is 14,077,747, multiplied by (ii) 32 percent
              of specified revenues net of specified expenditures from the
              Joint Venture. The above calculation was the result of
              negotiations among the parties to the 1984 merger of ENSTAR
              Corporation into the Company and represents the amount of future
              income from the Joint Venture that the Company has agreed to pay
              to the former stockholders of ENSTAR in the form of payments on
              the IPUs. If Net Cash Flow is zero or negative for any quarterly
              period, no Participation Payments for that quarter will be made.
              The Company maintains an irrevocable letter of credit for the
              benefit of the IPU holders in an amount equal to 240 percent of
              the most recent quarterly distribution. At December 31, 1996 and
              1995, there were 10,778,590 IPUs issued and outstanding. Based on
              the closing price on the American Stock Exchange of the IPUs at
              December 31, 1996 of $4.50 per unit, the outstanding IPUs had a
              total market valuation of $49 million.







                                      -39-

<PAGE>   41


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)



                        Calculation of Net Cash Flow and
                             Participation Payments


<TABLE>
<CAPTION>
                                                       1996       1995
                                                     --------   --------

         <S>                                         <C>        <C>     
          Positive cash flow:

            Gas receipts                             $236,472   $185,710
            Oil and condensate receipts                36,406     32,386
            Other non-revenue cash receipts from
               Joint Venture                            6,270      6,973
                                                     --------   --------

                   Total positive cash flow           279,148    225,069
                                                     --------   --------

          Less negative cash flow:

            Expenditures to Joint Venture              47,719     52,230
            Indonesian income taxes                   125,405     95,478
                                                     --------   --------

                   Total negative cash flow           173,124    147,708
                                                     --------   --------


          Net positive cash flow from 23.125%
            interest in Joint Venture                $106,024   $ 77,361
                                                     ========   ========


          Net cash flow for benefit of IPU holders   $ 25,976   $ 18,970
                                                     ========   ========


          Participation Payment per unit             $   2.41   $   1.76
                                                     ========   ========
</TABLE>










                                      -40-

<PAGE>   42


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)

(10)     LONG-TERM DEBT

         The 8-1/4% convertible subordinated guaranteed debentures, due in
         December 1995, were repaid on January 5, 1994 in the principal amount
         of $36,400. The debentures had a carrying value at December 31, 1993
         of $33,292 resulting in an extraordinary loss on redemption of $3,108,
         which was recognized in the first quarter of 1994.

(11)     BENEFIT PLANS

         In December of 1996, the VICO Board of Directors approved a plan to
         consolidate the Balikpapan office into the Jakarta office and Badak
         field office as a result of an ongoing business process reengineering
         effort. The closing of the Balikpapan office will result in the
         elimination of a number of positions and an anticipated reduction in
         the number of employees. A voluntary early retirement program has been
         offered to all qualifying national employees. The Company has included
         an accrual of approximately $1 million, net of cost recovery, for its
         share of this plan.

         VICO has a defined contribution retirement plan that covers its
         eligible employees. Although VICO expects to provide an annual
         contribution based on a percentage of each eligible employee's salary,
         the actual contribution is determined at the end of each year by its
         Board of Directors and may vary depending upon circumstances. Defined
         contribution pension expense is funded by the Joint Venture
         participants and the Company's share of such expense for the years
         ended December 31, 1996, 1995 and 1994 was $191, $216 and $211,
         respectively.

         VICO provides severance pay to its employees based upon salary and
         length of service. Such severance pay is accrued over the service life
         of the employees and is funded by the Joint Venture. The Company has
         provided approximately $1.3 million, $2.0 million and $1.1 million for
         the years ended December 31, 1996, 1995 and 1994 respectively for its
         share of future severance payments.

         The Company has a defined benefit pension plan established by ENSTAR
         that covers ENSTAR's former employees who are considered terminated
         and fully vested. ENSTAR's pension funding policy is to contribute an
         amount meeting the requirement of the Employees Retirement Income
         Security Act. The estimated reconciliation of the funded status of
         ENSTAR's pension plan as at December 31, 1996, 1995 and 1994
         respectively was as follows:

                                      -41-

<PAGE>   43


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)

(11)     BENEFIT PLANS (continued)

<TABLE>
<CAPTION>
                                               1996        1995        1994
                                             --------    --------    --------
         <S>                                 <C>         <C>         <C>      
          Actuarial present value of:

               Vested accumulated benefit
                 obligation                  $(17,562)   $(18,233)   $(16,155)
                                             ========    ========    ========

               Projected vested benefit
                 obligation                  $(17,562)   $(18,233)   $(16,155)
               Fair value of plan assets       17,476      16,287      13,902
                                             --------    --------    --------

               Unfunded projected benefit
                 obligation                       (86)     (1,946)     (2,253)
               Unrecognized net
                 (gain)loss                      (657)        767       1,243
               Unrecognized net transition
                 obligation                       768         803         837
               Adjustment required to
                 recognize minimum
                 liability                       (111)     (1,570)     (2,080)
                                             --------    --------    --------

               Accrued pension cost
                 recognized in the
                 Consolidated Balance
                 Sheet                       $    (86)   $ (1,946)   $ (2,253)
                                             ========    ========    ========
</TABLE>


         The minimum liability that must be recognized is equal to the excess
         of the accumulated benefit obligation over the fair value of plan
         assets. A corresponding amount is recognized as either an intangible
         asset or a reduction to Partners' Capital.

         The pension (income) expense for 1996, 1995 and 1994 was composed of
         the following:

<TABLE>
<CAPTION>
                                           1996       1995       1994
                                          -------    -------    -------

         <S>                              <C>        <C>        <C>    
          Interest cost                   $ 1,234    $ 1,318    $ 1,317
          Actual return on plan assets     (1,964)    (3,623)    (1,063)
          Net amortization and deferral       715      2,595         35
                                          -------    -------    -------

                                          $   (15)   $   290    $   289
                                          =======    =======    =======
</TABLE>


                                      -42-

<PAGE>   44


                        UNIMAR COMPANY AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)
              (in thousands of dollars unless otherwise indicated)

(11)     BENEFIT PLANS (continued)

         The assumed discount rate used in determining the projected benefit
         obligation was 7.25 percent, 7.25 percent and 8.5 percent for 1996,
         1995 and 1994, respectively. The assumed long-term rate of return on
         plan assets was 8 percent for 1996, 1995 and 1994. Plan assets are
         invested in equity and fixed income securities.

(12)     CLAIMS AND LITIGATION

         The Company has pending litigation arising in the ordinary course of
         its business. However, none of the litigation is expected to have a
         material adverse effect on the Company's financial position or results
         of operations. The Company also has a reserve of $6.5 million for
         potential exposure in a royalty dispute. The Company believes it may
         have valid defenses against such claims.

(13)     RELATED PARTY TRANSACTIONS

         All aspects of the Company's business that are not associated with the
         operating management of the Joint Venture, such as legal, accounting,
         tax and other management functions are supplied by VICO or employees
         of the partners in accordance with management agreements negotiated
         among the parties. For the years 1996, 1995 and 1994, these charges
         were $402, $455 and $434, respectively.

         The Company holds demand notes in the amount of $40 million from or
         guaranteed by affiliates of each partner. These funds will be made
         available to the Company if additional working capital is required.

         In addition to acting as the operator of the Joint Venture,  VICO
         performs engineering, pipeline maintenance, and human resource
         related services for the operator of the LNG Plant, P. T. Badak
         Natural Gas Liquefaction Company (P. T. Badak).  During the years
         ended December 31, 1996 and 1995, VICO billed P. T. Badak $25.1
         million and $20.2 million respectively for services rendered.
         Accounts receivable from P. T. Badak approximated $2.6 million and
         $2.3 million at December 31, 1996 and 1995, respectively.



                                      -43-

<PAGE>   45



                        UNIMAR COMPANY AND SUBSIDIARIES

         SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)

         The following items are contained in this section:

         (a) Indonesian oil and gas operations
         (b) Interim financial data


(a)      INDONESIAN OIL AND GAS OPERATIONS

         The Company's estimated net share of Indonesian oil and gas reserves
         is shown in Table 1. The estimated proved reserves of gas and oil and
         condensate as of December 31, 1996, 1995, 1994 and 1993 attributable
         to the Joint Venture's interest in the production sharing contract in
         East Kalimantan were prepared by petroleum engineers employed by
         LASMO, an affiliate of Ustar.

         Net share estimates are the Company's present best estimates of the
         share of proved Indonesian reserves attributable to revenue the
         Company would receive, before Indonesian income taxes, under the terms
         of the Production Sharing Contract, as extended through August 7, 2018
         based upon assumptions regarding levels of Joint Venture expenditures
         over the life of the project, oil and gas prices, firm contract sales
         commitments and potential sales opportunities and upon numerous other
         assumptions. The Company has no ownership interest in the Indonesian
         reserves in place, but rather shares in production and revenue from
         the sale of oil, condensate, LPG and LNG in accordance with the PSC.
         The reserve estimates are subject to revision as prices fluctuate due
         to the cost recovery feature for field and other operating costs under
         the PSC and for changes in the Indonesian income tax rate. Because of
         the number and range of these variables, no representation can be made
         that the net share estimates set forth below are accurate, and any
         changes in such variables will impact such estimates and the cash
         flows the Company may realize in the future.

         Oil and gas reserves are considered proved if economic producibility
         is supported by either actual production or conclusive formation
         tests. Proved developed reserves are reserves that can be expected to
         be recovered through existing wells with existing equipment and
         operating methods. Proved undeveloped reserves are reserves that are
         expected to be recovered from new wells on undrilled acreage or from
         existing wells where a relatively significant expenditure is required
         to permit production. These estimates do not include reserves which
         may be found by extension of proved areas, reserves which have been
         estimated considering known geological and seismic data and previous
         experience with similar reservoirs, or reserves recoverable by
         secondary or tertiary recovery methods unless these methods are in
         operation and showing successful results. These estimates include
         reserves that are not currently under contract, but which management
         expects may be marketed during the remaining period in which the
         Company has the right to produce such reserves, but for which there is
         no assurance of sales. Estimates of

                                      -44-

<PAGE>   46


    (a)  INDONESIAN OIL AND GAS OPERATIONS (continued)

         reserves require extensive judgments of reservoir engineering data and
         are generally less precise than other estimates used in connection
         with financial reporting. Actual future revenues from proved reserves
         estimates may vary significantly from estimated future cash flows due
         to changes in prices of oil and gas, and in the timing of actual
         production in future periods. Actual production and development costs
         will vary from those estimated due to inflation and other factors.


                                      -45-

<PAGE>   47


         (a)  INDONESIAN OIL AND GAS OPERATIONS (continued)

                                    TABLE 1

                       QUANTITIES OF OIL AND GAS RESERVES
                    (OIL IN THOUSANDS OF BBLS; GAS IN MMCF)
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                     OIL          GAS


<S>                                                 <C>        <C>      
PROVED DEVELOPED AND UNDEVELOPED
     RESERVES:

         As of December 31, 1993                    13,554     1,075,240

              Revisions to previous estimates        2,724        96,257

              Production                            (1,891)      (92,408)
                                                    ------     ---------
                                                               
         As of December 31, 1994                    14,387     1,079,089
                                                               
              Revisions to previous estimates        2,916        (6,943)
                                                               
              Production                            (1,753)      (88,830)
                                                    ------     ---------
                                                               
         As of December 31, 1995                    15,550       983,316
                                                               
              Revisions to previous estimates        1,425        (7,573)
                                                               
              Production                            (1,805)      (95,958)
                                                    ------     ---------
                                                               
         As of December 31, 1996                    15,170       879,785
                                                    ======     =========
                                                               
                                                               
                                                               
PROVED DEVELOPED RESERVES:                                     
                                                               
         As of December 31, 1993                    10,281       727,536
                                                    ======     =========
                                                               
         As of December 31, 1994                    11,731       877,140
                                                    ======     =========
                                                               
         As of December 31, 1995                    13,782       779,425
                                                    ======     =========
                                                               
         As of December 31, 1996                    12,628       695,466
                                                    ======     =========
</TABLE>


                                      -46-

<PAGE>   48


         (a)  INDONESIAN OIL AND GAS OPERATIONS (continued)


         Table 2 shows costs incurred in oil and gas property acquisition,
         exploration and development activities.

                                    TABLE 2

              COSTS INCURRED IN OIL AND GAS PROPERTY ACQUISITION,
                     EXPLORATION AND DEVELOPMENT ACTIVITIES
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
                             (THOUSANDS OF DOLLARS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                          1996           1995           1994
                         -------        -------        -------

<S>                      <C>            <C>            <C>    
Exploration costs        $ 1,045        $   102        $ 2,545
Development costs         21,114         26,157         31,878
</TABLE>





         Table 3 shows results of operations for oil and gas producing
         activities.

                                    TABLE 3

           RESULTS OF OPERATIONS FOR OIL AND GAS PRODUCING ACTIVITIES
                 YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
                             (THOUSANDS OF DOLLARS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                   1996            1995            1994
                                 --------        --------        --------


<S>                              <C>             <C>             <C>     
Revenues                         $252,653        $202,019        $197,925

Production costs                   23,928          24,416          19,618

Exploration costs                   1,045             102           2,787

Depreciation, depletion
and amortization                   47,156          41,717          50,554

Income tax expense                124,210          94,311          86,357
                                 --------        --------        --------

Results of operations for
producing activities (1)         $ 56,314        $ 41,473        $ 38,609
                                 ========        ========        ========
</TABLE>




         (1)  Excludes corporate overhead and interest costs.


                                      -47-

<PAGE>   49


         (a)  INDONESIAN OIL AND GAS OPERATIONS (continued)


         Table 4 shows a standardized measure of discounted future net cash
         flows and changes therein relating to proved oil and gas reserves
         using an annual discount of 10 percent and the Company's net share
         estimates referred to in the preface to Table 1. Generally, estimated
         future cash inflows have been computed by applying year-end prices of
         oil and gas to estimated future production of proved oil and gas
         reserves. The LNG crude oil basket prices used in Table 4 for 1996,
         1995 and 1994 on a per barrel basis were $23.12, $18.16 and $16.17,
         respectively. Future development and production costs have been
         computed by estimating the future expenditures (based on year-end
         costs) to be incurred in developing and producing the proved reserves,
         assuming continuation of existing economic conditions. Future income
         tax expenses have been calculated by using the year-end statutory tax
         rate for Indonesia of 56 percent through August 7, 1998 and 48 percent
         thereafter. Indonesian net cash flow estimates are the Company's
         present best estimates of the share of future net revenues, after
         Indonesian taxes and capital and operating contributions to the Joint
         Venture, that the Company would receive if proved reserves are
         produced under the terms of the PSC, as extended, based upon
         assumptions regarding levels of Joint Venture expenditures over the
         life of the project, firm contract sales commitments and potential
         sales opportunities and upon numerous other assumptions. Additionally,
         the net cash flow estimates include amounts due IPU holders.

         Because of the number and range of these variables, no representation
         can be made that the net cash flow estimates set forth below are
         accurate, and any change in such variables will impact the cash flows
         the Company may realize in the future.


                                      -48-

<PAGE>   50


         (a)  INDONESIAN OIL AND GAS OPERATIONS (continued)



                                    TABLE 4

          STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS AND
            CHANGES THEREIN RELATING TO PROVED OIL AND GAS RESERVES
                      AT DECEMBER 31, 1996, 1995 AND 1994
                             (THOUSANDS OF DOLLARS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                              1996                1995                1994
                                          -----------         -----------         -----------

<S>                                       <C>                 <C>                 <C>        
Future cash inflows                       $ 3,095,956         $ 2,421,947         $ 2,372,316
Future production and
  development costs                          (561,737)           (489,767)           (593,791)
Future income tax expenses                 (1,226,268)           (948,669)           (874,477)
                                          -----------         -----------         -----------

Future net cash flows                       1,307,951             983,511             904,048

10% annual discount for estimated
  timing of cash flows                       (668,376)           (488,307)           (442,377)
                                          -----------         -----------         -----------

Standardized measure of discounted
 future net cash flows                    $   639,575         $   495,204         $   461,671
                                          ===========         ===========         ===========
</TABLE>



The following are the principal sources of changes in the standardized measure
of discounted future net cash flows for proved reserves during 1996, 1995 and
1994.

<TABLE>
<CAPTION>
                                             1996              1995              1994
                                           ---------         ---------         ---------
                                                        (THOUSANDS OF DOLLARS)
                                                             (UNAUDITED)
<S>                                        <C>               <C>               <C>      
Standardized measure of discounted
  future net cash flows at
  beginning of period                      $ 495,204         $ 461,671         $ 379,751

Sales and transfers of oil and gas
  produced, net of production costs         (230,591)         (180,507)         (176,275)

Net changes in prices and
  production costs                           247,938           157,100           159,985

Development costs incurred
  during the period                           21,114            26,157            31,878

Revisions of previous
  quantity estimates                         130,797           (26,301)           67,590

Accretion of discount                         90,528            86,109            71,775

Net change in income taxes                  (115,415)          (29,025)          (73,033)
                                           ---------         ---------         ---------

Standardized measure of discounted
 future net cAsh flows at end
 of period                                 $ 639,575         $ 495,204         $ 461,671
                                           =========         =========         =========
</TABLE>


Note: The standardized measure of discounted future net cash flows at December
31, 1996, 1995 and 1994 included $52,060, $54,805 and $59,571, respectively, in
future net cash flows attributable to IPU holders (See Footnote 9).

                                      -49-

<PAGE>   51



(b)      INTERIM FINANCIAL DATA (Unaudited)

         The following table shows summary quarterly data for 1996, 1995 and
         1994:




<TABLE>
<CAPTION>
                                      1ST            2ND            3RD            4TH
                                    QUARTER        QUARTER        QUARTER        QUARTER
                                    -------        -------        -------        -------
<S>                                 <C>            <C>            <C>            <C>    
YEAR ENDED DECEMBER 31, 1996
----------------------------------------------------------------------------------------
Revenues                            $68,596        $57,615        $62,693        $63,749

Operating profit                    $49,517        $40,861        $43,538        $46,132

Net earnings                        $17,461        $12,187        $11,462        $10,304


YEAR ENDED DECEMBER 31, 1995
----------------------------------------------------------------------------------------
Revenues                            $60,539        $53,261        $43,734        $44,485

Operating profit                    $42,594        $36,271        $28,255        $28,331

Net earnings                        $14,172        $11,022        $ 8,296        $ 6,651


YEAR ENDED DECEMBER 31, 1994
----------------------------------------------------------------------------------------
Revenues                            $55,151        $42,717        $51,941        $48,116

Operating profit                    $35,384        $26,018        $31,029        $32,530

Earnings before
 extraordinary item                 $ 9,818        $ 8,509        $10,088        $ 7,797

Net earnings                        $ 6,710        $ 8,509        $10,088        $ 7,797
</TABLE>


                                      -50-

<PAGE>   52



ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURES.

         None.


                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The management, budgeting and financial control of the Company's
interest in the Indonesian Joint Venture operations are exercised by a
Management Board consisting of six members, three appointed by each partner.
The following persons currently serve as members of the Company's Management
Board:

         GEORGE W. BERKO (age 50) was appointed to the Company's Management
Board in May 1992. In January 1996, he was appointed Controller of VICO. Since
May 1992, he has served as the Partners' representative for Investor Relations,
Treasurer and Chief Financial and Accounting Officer of ENSTAR, ENSTAR
Indonesia, Inc., INTERNATIONAL, and certain of their subsidiaries, and has been
LASMO America Ltd.'s Vice President - Unimar Accounting. From October 1990
until April 1992, he was Vice President, Controller of Ultramar Oil and Gas
Limited, and prior to that time, he was a General Manager of American Ultramar
Ltd. beginning in December 1984.

         JOHN A. HOGAN (age 43) was appointed to the Company's Management Board
in March 1996. Since February 1993, he has been Chief Operating Officer for
LASMO. In 1989, he was appointed Managing Director of LASMO North Sea. From
1981 to 1989, he served as Executive Vice President of US operations for LASMO.

         LARRY D. KALMBACH (age 45) was appointed to the Company's Management
Board in February 1993. He is also a Director of ENSTAR and certain of its
affiliates. Since February 1995, he has been Vice President and Chief Financial
Officer of UTPH. Prior to that time, he held several executive and management
positions with UTPH including Vice President - Finance from 1993 to 1995 and
Vice President and Controller from 1986 to 1993.

         WILLIAM M. KRIPS (age 57) was appointed to the Company's Management
Board in January 1987 and was appointed Chairman of the Management Board in May
1994. He is also a Director of ENSTAR and certain of its affiliates. Since
1994, he has been Senior Vice President of UTPH. Prior to that time, he has
served as Senior Vice President - Exploration & Production, Senior Vice
President and General Manager - U. S. Exploration and Production, Senior Vice
President and General Manager - Hydrocarbon Products Group and Vice President
and General Manager - International Operations.


                                      -51-

<PAGE>   53




         ARTHUR W. PEABODY, JR. (age 53) was appointed to the Company's
Management Board in February 1992. He is also a Director of ENSTAR and certain
of its affiliates. Since May 1994, he has served as Senior Vice President of
UTPH and has held several executive positions with UTPH including Senior Vice
President - Exploration and Production, Senior Vice President and General
Manager - Hydrocarbon Products Group, Vice President - Planning and
Administration and Vice President - Acquisitions and Planning.

         RICHARD L. SMERNOFF (age 55) was appointed to the Company's Management
Board in July 1995. He is also a Director of ENSTAR, ENSTAR Indonesia, Inc.,
INTERNATIONAL and VICO. Since March 1, 1994, he has served as Finance Director
of LASMO. He has spent some fourteen years in senior finance positions in the
oil and gas industry, most recently as Senior Vice President with Amerada Hess
Corporation in the United States. Prior to joining the Company, he was Chief
Financial Officer of Datascope Corp.

         As set forth above, control of the Company's operations is exercised
by the Management Board. The Company, a Texas general partnership, does not
have any Executive Officers.

ITEM 11. EXECUTIVE COMPENSATION.

         The Company has no executive officers, and no members of the
Management Board are paid directly by the Company. All members of the
Management Board are full-time employees of UTPH or LASMO, or their respective
subsidiaries, and do not receive from the Company any remuneration for their
services to the Company. Moreover, the Company has no employees who are
compensated for their services to the Company. VICO and its subsidiaries, have
employees who are responsible for the daily operating activities of the Joint
Venture and are compensated by the Joint Venture. See Item 13 below for
information concerning the Company's reimbursement to LASMO for services
rendered to the Company by one of LASMO's designees on the Management Board.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT.

         The Company is a Texas general partnership and as such has no voting
securities apart from the general partnership interests owned by the partners.
The following table reflects the beneficial ownership of 100 percent of the
partnership interests in the Company as of March 15, 1997:

                                      -52-

<PAGE>   54


<TABLE>
<CAPTION>
                              Name and Address of        Amount Beneficially
Title of Class                  Beneficial Owner               Owned
--------------                -------------------              -----
<S>                           <C>                               <C>
General Partnership           LASMO plc                         50%
  Interest                    100 Liverpool Street
                              London EC2M 2BB
                              England

<CAPTION>

                              Name and Address of          Amount Beneficially
Title of Class                  Beneficial Owner                 Owned
--------------                  ----------------                 -----

<S>                           <C>                                 <C>
General Partnership           Union Texas Petroleum               50%
  Interest                      Holdings, Inc.
                              1330 Post Oak Boulevard
                              Houston, Texas 77252
</TABLE>


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

              The partners of the Company provide management expertise, office
space, and administrative, legal and professional services. For such services,
a management fee of $402 and $455 was charged in 1996 and 1995, respectively,
including $56 ($147 in 1995) paid in respect of Mr. Berko's services.

              The Company holds demand notes in the amount of $40 million from
or generated by affiliates of each partner. These funds will be made available
to the Company if additional working capital is required.

              As operator of the Joint Venture, VICO conducts exploration and
development activities within the PSC area. The cost of such activities is
funded by the Joint Venture participants to VICO. In addition, VICO performs
engineering, pipeline maintenance and human resource related services for the
operator of the LNG Plant, P.T. Badak Natural Gas Liquefaction Company (P.T.
Badak). For the year ended December 31, 1996 and 1995, VICO billed P.T. Badak
$25.1 million and $20.2 million respectively for services rendered. Accounts
receivable from P.T. Badak approximated $2.6 million at December 31, 1996 ($2.3
million at December 31, 1995).

                                      -53-

<PAGE>   55



                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
         ON FORM 8-K.


     (a) Financial Statements listed below are included as Part II, Item 8
         hereof on the pages indicated:


              Independent Auditors' Report                                24

              Report of Independent Auditors                              25

              Consolidated Balance Sheets,
                   December 31, 1996 and 1995                             26

              Consolidated Statements of Earnings,
                   Years ended December 31, 1996,
                   1995 and 1994                                          27

              Consolidated Statements of Cash Flows,
                   Years ended December 31, 1996,
                   1995 and 1994                                          28

              Consolidated Statements of Changes in
                   Partners' Capital, Years ended
                   December 31, 1996, 1995 and 1994                       29

              Notes to Consolidated Financial
                   Statements                                            30-43

              Supplemental Financial Information
                   (unaudited)                                           44-50


         All schedules are omitted as they are not applicable.

                                      -54-

<PAGE>   56



(b)      The following documents are included as Exhibits to this Report.
         Unless it has been indicated that a document listed below is
         incorporated by reference herein, copies of the document have been
         filed herewith.

         (2)-1-   Merger Agreement, dated May 22, 1984, and Amendment
                  Agreements thereto, dated June 8, 1984 and June 12, 1984
                  (incorporated by reference to Annex A to the Prospectus/Proxy
                  Statement included in the Company's Registration Statement on
                  Form S-14 (No. 2-93037)).*

         (2)-2-   Agreement of Merger, dated as of August 28, 1984
                  (incorporated by reference to Annex B to the
                  Prospectus/Proxy Statement included in the Company's
                  Registration Statement on Form S-14 (No. 2-93037)).*

         (2)-3-   Divestiture Agreement, dated June 20, 1984 (filed as
                  Exhibit 2.3 to the Company's Registration Statement on
                  Form S-14 (No. 2-93037)).*

         (3)-1-   Amended and Restated Agreement of General Partnership
                  of Unimar Company dated September 11, 1990 between
                  Unistar, Inc. and Ultrastar, Inc. (filed as Exhibit
                  (3)-4- to the Company's 1990 Form 10-K (No. 18791)).*

         (4)-1-   Form of Indenture between Unimar and Irving Trust
                  Company, as Trustee (filed as Exhibit 4 to the
                  Company's Registration Statement on Form S-14 (No. 2-
                  93037)).*

         (4)-2-   First Supplemental Indenture, dated as of October 31, 1986,
                  to the Indenture between Unimar and Irving Trust Co., as
                  Trustee (Exhibit (4)-1 above) (filed as Exhibit 10.114 to
                  Union Texas Petroleum Holdings, Inc.'s Registration Statement
                  on Form S-1 (No. 33-16267)).*

         (10)-1-  Joint Venture Agreement, dated August 8, 1968, among Roy M.
                  Huffington, Inc., Virginia International Company, Austral
                  Petroleum Gas Corporation, Golden Eagle Indonesia, Limited,
                  and Union Texas Far East Corporation, as amended (filed as
                  Exhibit 6.6 to Registration Statement No. 2-58834 of Alaska
                  Interstate Company).*

         (10)-2-  Agreement dated as of October 1, 1979, among the parties to
                  the Joint Venture Agreement referred to in Exhibit (10)-1-
                  above (filed as Exhibit 5.2 to Registration Statement No.
                  2-66661 of Alaska Interstate Company).*


                      * Incorporated herein by reference.

                                      -55-

<PAGE>   57



         (10)-3-  Amendment to the Operating Agreement dated April 1,
                  1990, between Roy M. Huffington, Inc., a Delaware
                  corporation, Ultramar Indonesia Limited, a Bermuda
                  corporation, Virginia Indonesia Company, a Delaware
                  corporation, Virginia International Company, a Delaware
                  corporation, Union Texas East Kalimantan Limited, a
                  Bahamian corporation, and Universe Gas & Oil Company,
                  Inc., a Liberian corporation. (filed as Exhibit (10)-3-
                  to the Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-4-  Amended and Restated Production Sharing Contract dated
                  April 23, 1990 (effective August 8, 1968 - August 7,
                  1998) by and between Perusahaan Pertambangan Minyak Dan
                  Gas Bumi Negara (Pertamina) and Roy M. Huffington,
                  Inc., Virginia International Company, Virginia
                  Indonesia Company, Ultramar Indonesia Limited, Union
                  Texas East Kalimantan Limited, Universe Gas & Oil
                  Company, Inc. and Huffington Corporation. (filed as
                  Exhibit (10)-4- to the Company's 1993 Form 10-K (No. 1-
                  8791)).*

         (10)-5-  Production Sharing Contract dated April 23, 1990
                  (effective August 8, 1998 - August 7, 2018) between
                  Perusahaan Pertambangan Minyak Dan Gas Bumi Negara
                  (Pertamina) and Roy M. Huffington, Inc., Virginia
                  International Company, Virginia Indonesia Company,
                  Ultramar Indonesia Limited, Union Texas East Kalimantan
                  Limited, Universe Gas & Oil Company, Inc. and
                  Huffington Corporation.(filed as Exhibit (10)-5- to
                  the Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-6-  Nilam Unit Agreement, effective as of January 1, 1980,
                  to establish the manner in which the Joint Venture and
                  Total will cooperate to develop the unitized area of
                  the Nilam Field. (filed as Exhibit (10)-58- to the
                  Company's 1991 Form 10-K (No. 1-8791)).*

         (10)-7-  Fourth Amended and Restated Implementation Procedures
                  for Crude Oil Liftings, effective as of July 1, 1993,
                  among Virginia Indonesia Company, LASMO Sanga Sanga
                  Limited, Opicoil Houston, Inc., Union Texas East
                  Kalimantan Limited, Universe Gas & Oil Company, Inc.
                  and Virginia International Company. (filed as Exhibit
                  (10)-7- to the Company's 1994 Form 10-K (No. 1-8791)).*

         (10)-8-  Amended and Restated 1973 LNG Sales Contract, dated as
                  of the 1st day of January 1990, by and between
                  Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as
                  Seller, and Chubu Electric Power Co., Inc., The Kansai
                  Electric Power Co., Inc., Kyushu Electric Power Co.,
                  Inc., Nippon Steel Corporation, Osaka Gas Co., Ltd. and
                  Toho Gas Co., Ltd., as Buyers. (filed as Exhibit
                  (10)-8- to the Company's 1993 Form 10-K (No. 1-8791)).*


                      * Incorporated herein by reference.

                                      -56-

<PAGE>   58



         (10)-9-  Amendment to the 1973 LNG Sales Contract dated as of
                  the 3rd day of December, 1973, amended by Amendment No.
                  1 dated as of the 31st day of August, 1976, and amended
                  and restated as of the 1st day of January, 1990 ("1973
                  LNG Sales Contract"), is entered into as of the 1st day
                  of June, 1992, by and between Perusahaan Pertambangan
                  Minyak Dan Gas Bumi Negara, a state enterprise of the
                  Republic of Indonesia (Seller), on the one hand, and
                  Kyushu Electric Power Co., Inc. (Kyushu Electric),
                  Nippon Steel Corporation (Nippon Steel), and Toho Gas
                  Co., Ltd. (Toho Gas), all corporations organized and
                  existing under the laws of Japan, on the other hand.
                  (filed as Exhibit (10)-9- to the Company's 1993 Form
                  10-K (No. 1-8791)).*

         (10)-10- Amended and Restated Supply Agreement (In Support of
                  the Amended and Restated 1973 LNG Sales Contract)
                  between Pertamina and Virginia Indonesia Company, LASMO
                  Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas
                  East Kalimantan Limited, Universe Gas & Oil Company,
                  Inc., and Virginia International Company dated
                  September 22, 1993, effective December 3, 1973. (filed
                  as Exhibit (10)-10- to the Company's 1993 Form 10-K
                  (No. 1-8791)).*

         (10)-11- Amended and Restated Badak LNG Sales Contract, dated as
                  of the 1st day of January, 1990, by and between
                  Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as
                  Seller, and Chubu Electric Power Co., Inc., The Kansai
                  Electric Power Co., Inc., Osaka Gas Co., Ltd. and Toho
                  Gas Co., Ltd., as Buyers. (filed as Exhibit (10)-11- to
                  the Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-12- Supply Agreement, dated as of April 14, 1981 between
                  Perusahaan Pertambangan Minyak Dan Gas Bumi Negara
                  (Pertamina)and the parties to the Joint Venture
                  Agreement, including the Company. (filed as Exhibit
                  (10)-12- to the Company's 1993 Form 10-K (No. 1-
                  8791)).*

         (10)-13- Seventh Supply Agreement for Excess Sales (Additional
                  Fixed Quantities under Badak LNG Sales Contract as a
                  Result of Contract Amendment and Restatement) between
                  Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and
                  Virginia Indonesia Company, Opicoil Houston, Inc.,
                  Ultramar Indonesia Limited, Union Texas East Kalimantan
                  Limited, Universe Gas & Oil Company, Inc. and Virginia
                  International Company, dated September 28, 1992, but
                  effective as of January 1, 1990. (filed as Exhibit
                  (10)-13- to the Company's 1993 Form 10-K (No. 1-
                  8791)).*




                      * Incorporated herein by reference.

                                      -57-

<PAGE>   59



         (10)-14- Bontang II Trustee and Paying Agent Agreement Amended
                  and Restated as of July 15, 1991 among Perusahaan
                  Pertambangan Minyak Dan Gas Bumi Negara, Virginia
                  Indonesia Company, Virginia International Company,
                  Union Texas East Kalimantan Limited, Ultramar Indonesia
                  Limited, Opicoil Houston, Inc., Universe Gas & Oil
                  Company, Inc., Total Indonesie, Unocal Indonesia, Ltd.,
                  Indonesia Petroleum, Ltd. and Continental Bank
                  International. (filed as Exhibit (10)-14- to the
                  Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-15- Producers Agreement No. 2 dated as of June 9, 1987 by
                  Perusahaan Pertambangan Minyak Dan Gas Bumi Negara
                  (Pertamina), Roy M. Huffington, Inc., Virginia
                  International Company, Ultramar Indonesia Limited,
                  Virginia Indonesia Company, Union Texas East Kalimantan
                  Limited, Universe Tankships, Inc., Huffington
                  Corporation in favor of The Industrial Bank of Japan
                  Trust Company as Agent (filed as Exhibit (10)-30- to
                  the Company's 1987 Form 10-K (No. 1-8791)).*

         (10)-16- Badak III LNG Sales Contract between Perusahaan
                  Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) as
                  Seller and Chinese Petroleum Corporation as Buyer
                  signed on March 19, 1987.  (filed as Exhibit (10)-16-
                  to the Company's 1994 Form 10-K (No. 1-8791)).*

         (10)-17- Badak III LNG Sales Contract Supply Agreement, dated
                  October 19, 1987 among Perusahaan Pertambangan Minyak
                  Dan Gas Bumi Negara (Pertamina) and the parties to the
                  Joint Venture Agreement. (filed as Exhibit (10)-17- to
                  the Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-18- LNG Sales and Purchase Contract (Korea II) effective
                  May 7, 1991 between Perusahaan Pertambangan Minyak
                  Dan Gas Bumi Negara and Korea Gas Corporation. (filed
                  as Exhibit (10)-18- to the Company's 1993 Form 10-K
                  (No. 1-8791)).*

         (10)-19- Schedule A to the LNG Sales and Purchase Contract
                  (Korea II FOB) between Perusahaan Pertambangan Minyak
                  Dan Gas Bumi Negara and Korea Gas Corporation. (filed
                  as Exhibit (10)-19- to the Company's 1993 Form 10-K
                  (No. 1-8791)).*

         (10)-20- Bontang III Producers Agreement, dated February 9,
                  1988, among Perusahaan Pertambangan Minyak Dan Gas Bumi
                  Negara (Pertamina) and the parties to the Joint Venture
                  Agreement. (filed as Exhibit (10)-20- to the Company's
                  1993 Form 10-K (No. 1-8791)).*





                      * Incorporated herein by reference.

                                      -58-

<PAGE>   60



         (10)-21- Amendment No. 1 to Bontang III Producers Agreement
                  dated as of May 31, 1988 among Perusahaan Pertambangan
                  Minyak Dan Gas Bumi Negara, Roy M. Huffington, Inc.,
                  Huffington Corporation, Virginia International Company,
                  Virginia Indonesia Company, Ultramar Indonesia Limited,
                  Union Texas East Kalimantan Limited, Universe
                  Tankships, Inc., Total Indonesie, Unocal Indonesia,
                  Ltd., Indonesia Petroleum, Ltd. and Train-E Finance
                  Co., Ltd., as Tranche A Lender, The Industrial Bank of
                  Japan Trust Company, as Agent and The Industrial Bank
                  of Japan Trust Company on behalf of the Tranche B
                  Lenders. (filed as Exhibit (10)-21- to the Company's
                  1993 Form 10-K (No. 1-8791)).*

         (10)-22- $316,000,000 Bontang III Loan Agreement dated February
                  9, 1988 among Continental Bank International as
                  Trustee, Train-E Finance Co., Ltd. as Tranche A Lender
                  and The Industrial Bank of Japan Trust Company as
                  Agent. (filed as Exhibit (10)-23- to the Company's 1993
                  Form 10-K (No. 1-8791)).*

         (10)-23- Bontang III Trustee and Paying Agent Agreement, dated
                  February 9, 1988, among Pertamina, Roy M. Huffington,
                  Inc., Huffington Corporation, Virginia International
                  Company, VICO, Ultrastar Indonesia Limited, Union Texas
                  East Kalimantan Limited, Universe Tankships, Inc., Total 
                  Indonesia, Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd. 
                  and Continental Bank International (filed as Exhibit 10.42 to
                  the Union Texas Petroleum Holdings, Inc.'s 1991 Form 10-K 
                  (Commission File No. 1-9019))*

         (10)-24- Amendment No. 1 to Bontang III Trustee and Paying Agent
                  Agreement, dated as of December 11, 1992, among
                  Pertamina, VICO, Virginia International Company,
                  Ultramar Indonesia Limited, Union Texas East Kalimantan
                  Limited, Opicoil Houston, Inc., Universe Gas & Oil
                  Company, Inc., Total Indonesia, Unocal Indonesia Ltd.,
                  Indonesia Petroleum, Ltd. and Continental Bank
                  International, as Bontang III Trustee  (filed as
                  Exhibit 10.83 to the Union Texas Petroleum Holdings,
                  Inc.'s 1992 Form 10-K (Commission File No. 1-9019)).*

         (10)-25- Amended and Restated Debt Service Allocation Agreement
                  dated February 9, 1988 among Perusahaan Pertambangan
                  Minyak Dan Gas Bumi Negara and Roy M. Huffington, Inc.,
                  Virginia International Company, Ultramar Indonesia
                  Limited, Virginia Indonesia Company, Union Texas East
                  Kalimantan Limited, Universe Tankships, Inc.,
                  Huffington Corporation, Total Indonesie, Unocal
                  Indonesia, Ltd. and Indonesia Petroleum, Ltd.(filed
                  as Exhibit (10)-26- to the Company's 1994 Form 10-K
                  (No. 1-8791)).*


                      * Incorporated herein by reference.

                                      -59-

<PAGE>   61



         (10)-26- Letter agreement between Perusahaan Pertambangan Minyak
                  Dan Gas Bumi Negara and Chinese Petroleum Corporation,
                  dated December 1, 1989. (filed as Exhibit (10)-27- to
                  the Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-27- Badak IV LNG Sales Contract dated October 23, 1990
                  between Perusahaan Pertambangan Minyak Dan Gas Bumi
                  Negara (Pertamina), as Seller and Osaka Gas Co., Ltd.,
                  Tokyo Gas Co., Ltd. and Toho Gas Co., Ltd., as Buyers.
                  filed as Exhibit (10)-29- to the Company's 1993 Form 
                  10-K (No. 1-8791)).*

         (10)-28- LNG Sales Contract dated as of October 13, 1992 between
                  Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as
                  Seller and Hiroshima Gas Co., Ltd. and Nippon Gas Co.,
                  Ltd., as Buyers. (filed as Exhibit (10)-30- to the
                  Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-29- LNG Sales Contract dated as of October 13, 1992 between 
                  Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller
                  and Osaka Gas Co., Ltd., as Buyer.(filed as Exhibit (10)-31- 
                  to the Company's 1993 Form 10-K (No.1-8791)).*

         (10)-30- Supply Agreement for Natural Gas to Badak IV LNG Sales
                  Contract dated August 12, 1991 between Perusahaan
                  Pertambangan Minyak Dan Gas Bumi Negara, Virginia
                  Indonesia Company, Opicoil Houston, Inc., Ultramar
                  Indonesia Limited, Union Texas East Kalimantan Limited,
                  Universe Gas & Oil Company, Inc. and Virginia
                  International Company. (filed as Exhibit (10)-32- to
                  the Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-31- Second Supply Agreement for Package IV Excess Sales
                  (Osaka Gas Contract - Package IV Quantities) between
                  Pertamina and Virginia Indonesia Company, LASMO Sanga
                  Sanga Limited, Opicoil Houston, Inc., Union Texas East
                  Kalimantan Limited, Universe Gas & Oil Company, Inc.,
                  and Virginia International Company dated September 22,
                  1993, effective January 1, 1991. (filed as Exhibit
                  (10)-33- to the Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-32- Third Supply Agreement for Package IV Excess Sales
                  (Toho Gas Contract - Package IV Quantities) between
                  Pertamina and Virginia Indonesia Company, LASMO Sanga
                  Sanga Limited, Opicoil Houston, Inc., Union Texas East
                  Kalimantan Limited, Universe Gas & Oil Company, Inc.,
                  and Virginia International Company dated September 28,
                  effective January 1, 1991. (filed as Exhibit (10)-34-
                  to the Company's 1993 Form 10-K (No. 1-8791)).*




                      * Incorporated herein by reference.

                                      -60-

<PAGE>   62



         (10)-33- Eleventh Supply Agreement for Package IV Excess Sales
                  (1973 Contract Build-Down Quantities) between Pertamina
                  and Virginia Indonesia Company, LASMO Sanga Sanga
                  Limited, Opicoil Houston, Inc., Union Texas East
                  Kalimantan Limited, Universe Gas & Oil Company, Inc.,
                  and Virginia International Company dated September 22,
                  1993, effective January 1, 1990. (filed as Exhibit
                  (10)-35- to the Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-34- Bontang IV Producers Agreement dated August 26, 1991 by
                  Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
                  Virginia Indonesia Company, Opicoil Houston, Inc.,
                  Virginia International Company, Ultramar Indonesia
                  Limited, Union Texas East Kalimantan Limited, Universe
                  Gas & Oil Company, Inc., Total Indonesie, Unocal
                  Indonesia, Ltd. and Indonesia Petroleum, Ltd., in favor
                  of The Chase Manhattan Bank, N.A. as Agent for the
                  Lenders. (filed as Exhibit (10)-36- to the Company's
                  1993 Form 10-K (No. 1-8791)).*

         (10)-35- $750,000,000 Bontang IV Loan Agreement dated August 26,
                  1991 among Continental Bank International as Trustee
                  under the Bontang IV Trustee and Paying Agent Agreement
                  as Borrower, Chase Manhattan Asia Limited and The
                  Mitsubishi Bank, Limited as Coordinators, the other
                  banks and financial institutions named herein as
                  Arrangers, Co-Arrangers, Lead Managers, Managers, Co-
                  Managers and Lenders, The Chase Manhattan Bank, N.A.
                  and the Mitsubishi Bank, Limited as Co-Agents and The
                  Chase Manhattan Bank, N.A. as Agent. (filed as Exhibit
                  (10)-37- to the Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-36- Bontang IV Trustee and Paying Agent Agreement dated
                  August 26, 1991 among Perusahaan Pertambangan Minyak
                  Dan Gas Bumi Negara, Virginia Indonesia Company,
                  Opicoil Houston, Inc., Virginia International Company,
                  Ultramar Indonesia Limited, Union Texas East Kalimantan
                  Limited, Universe Gas & Oil Company, Inc., Total Indonesie, 
                  Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd. and 
                  Continental Bank International. (filed as Exhibit (10)-38- 
                  to the Company's 1993 Form 10-K (No. 1-8791)).*











                      * Incorporated herein by reference.

                                      -61-

<PAGE>   63



         (10)-37- Amended and Restated Bontang Processing Agreement dated
                  February 9, 1988 among Perusahaan Pertambangan Minyak
                  Dan Gas Bumi Negara and Roy M. Huffington, Inc.,
                  Huffington Corporation, Virginia International Company,
                  Virginia Indonesia Company, Ultramar Indonesia Limited,
                  Union Texas East Kalimantan Limited, Universe
                  Tankships, Inc., Total Indonesie, Unocal Indonesia,
                  Ltd., Indonesia Petroleum, Ltd. and P.T. Badak Natural
                  Gas Liquefaction Company (filed as Exhibit (10)-39- to
                  the Company's 1988 Form 10-K (No. 1-8791)).*

         (10)-38- Bontang LPG Sales and Purchase Contract between
                  Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as
                  Seller, and National Federation of Agricultural Co-
                  Operative Associations (Zen-Noh), as Buyer, dated
                  February 21, 1992. (filed as Exhibit (10)-42- to the
                  Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-39- Bontang LPG Sales and Purchase Contract between
                  Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as
                  Seller, and Japan Indonesia Oil Co., Ltd., as Buyer,
                  dated February 20, 1992. (filed as Exhibit (10)-43- to
                  the Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-40- Arun and Bontang LPG Sales and Purchase Contract
                  between Perusahaan Pertambangan Minyak Dan Gas Bumi
                  Negara (Pertamina) as Seller and Mitsubishi
                  Corporation, Cosmo Oil Co., Ltd., Nippon Petroleum Gas
                  Co., Ltd., Showa Shell Sekiyu K.K., Kyodo Oil Co.,
                  Ltd., Idemitsu Kosan Co., Ltd. and Mitsui Liquefied Gas
                  Co., Ltd. as Buyers dated July 15, 1986.  (filed as
                  Exhibit (10)-42- to the Company's 1994 Form 10-K (No. 
                  1-8791)).*

         (10)-41- Amendments to Arun and Bontang LPG Sales and Purchase
                  Contract, dated October 5, 1994, between Pertamina, as
                  Seller, and Mitsubishi Corporation, Cosmo Oil Co.,
                  Ltd., Nippon Petroleum Gas Co., Ltd., Showa Shell
                  Sekiyu K.K., Japan Energy Corporation, Idemitsu Kosan
                  Co., Ltd., and Mitsui Oil & Gas Co., Ltd., as Buyers.
                  (filed as Exhibit 10.88 to the Union Texas Petroleum
                  Holdings, Inc.'s 1994 Form 10-K (Commission File No. 
                  1-9019)).*

         (10)-42- Bontang LPG Supply Agreement, dated November 17, 1987,
                  between Perusahaan Pertambangan Minyak Dan Gas Bumi
                  Negara (Pertamina) and the parties to the Joint Venture
                  Agreement. (filed as Exhibit (10)-45- to the Company's
                  1993 Form 10-K (No. 1-8791)).*






                      * Incorporated herein by reference.

                                      -62-

<PAGE>   64



         (10)-43- Advance Payment Agreement between Perusahaan
                  Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and
                  Arun Bontang Project Finance Co., Ltd., dated February
                  16, 1987 (filed as Exhibit (4)-15- to the Company's
                  1986 Form 10-K (No. 1-8791)).*

         (10)-44- Agreement and Plan of Reorganization of ENSTAR
                  Corporation, dated December 22, 1989, by and among
                  Unimar Company, Ultrastar, Inc., Unistar, Inc., ENSTAR
                  Corporation, Newstar Inc., Union Texas Development
                  Corporation, Union Texas Petroleum Corporation and
                  Ultramar America Limited. (filed as Exhibit (10)-47- to
                  the Company's 1993 Form 10-K (No. 1-8791)).*

         (10)-45- Amendment to Agreement and Plan of Reorganization of
                  ENSTAR Corporation, dated May 1, 1990, by and among
                  Unimar Company, Ultrastar, Inc., Unistar, Inc.,
                  ENSTAR Corporation, Ultramar Production Company,
                  Union Texas Development Corporation, Union Texas
                  Petroleum Corporation and Ultramar America Limited.
                  (filed as Exhibit (10)-48- to the Company's 1993 Form
                  10-K (No. 1-8791)).*

         (10)-46- Addendum to Badak IV LNG Sales Contract Supply
                  Agreement (effective October 23, 1990), dated January
                  31, 1994, by and between Perusahaan Pertambangan Minyak
                  Dan Gas Bumi Negara ("Pertamina") and Virginia
                  Indonesia Company ("VICO"), LASMO Sanga Sanga Limited,
                  Opicoil Houston, Inc., Union Texas East Kalimantan
                  Limited, Universe Gas & Oil Company, Inc., and Virginia
                  International Company.  (filed as Exhibit (10)-48- to
                  the Company's 1994 Form 10-K (No. 1-8791)).*

         (10)-47- Memorandum of Agreement for Purchase and Sale of LNG
                  During 1995 - 1999 between Perusahaan Pertambangan
                  Minyak Dan Gas Bumi Negara ("Pertamina") ("Seller")
                  and Korea Gas Corporation ("KGC") ("Buyer") for the
                  sale and purchase of certain quantities of LNG.
                  (filed as Exhibit (10)-49- to the Company's 1994 Form
                  10-K (No. 1-8791)).*

         (10)-48- Second Amended and Restated 1973 LNG Sales Contract,
                  dated as of August 3, 1995 between Perusahaan
                  Pertambangan Minyak Dan Gas Bumi Negara ("Pertamina"),
                  as Seller, and Chubu Electric Power Co., Inc., The
                  Kansai Electric Power Co., Inc/. Kyushu Electric Power
                  Co., Inc., Nippon Steel Corporation, Osaka Gas Co.,
                  Ltd. and Toho Gas Co., Ltd., as the Buyers, with
                  related letter agreement, dated August 3, 1995, between
                  Seller and Buyers (filed as Exhibit 10.7 to the Union
                  Texas Petroleum Holdings, Inc. Form 10-Q for quarter
                  ended September 30, 1995 (Commission File No. 1-9019)).*


                      * Incorporated herein by reference.

                                      -63-

<PAGE>   65



         (10)-49- Second Amended and Restated 1981 Badak LNG Sales
                  Contract, dated as of August 3, 1995, between
                  Pertamina, as Seller, and Chubu Electric Power Co.,
                  Inc., The Kansai Electric Power Co., Inc., Osaka Gas
                  Co., Ltd. and Toho Gas Co., Ltd., as Buyers with
                  related letter agreement, dated August 3, 1995, between
                  Seller and Buyers.  (filed as Exhibit 10.106 to the
                  Union Texas Petroleum Holdings, Inc.'s 1995 Form 10-K
                  (Commission File No. 1-9019)).*

         (10)-50- LNG Sales and Purchase Contract (Badak V) dated August
                  12, 1995, between Pertamina and Korea Gas Corporation.
                  (filed as Exhibit 10.107 to the Union Texas Petroleum
                  Holdings, Inc.'s 1995 Form 10-K (Commission File No. 
                  1-9019)).*

         (10)-51- LNG Sales and Purchase Contract (Badak VI), dated
                  October 25, 1995, between Pertamina and Chinese
                  Petroleum Corporation.  (filed as Exhibit 10.108 to the
                  Union Texas Petroleum Holdings, Inc.'s 1995 Form 10-K
                  (Commission File No. 1-9019)).*

         (10)-52- Allocation of Supply Entitlements between the Arun and
                  Bontang Plants for LNG Sales (effective January 1, 1995).  
                  (filed as Exhibit (10)-52- to the Company's 1995 Form 10-K 
                  (No. 1-8791)).*

         (10)-53- Memorandum of Understanding  re:  Supply Agreements and
                  Package VI Sales dated and effective as of the 27th day
                  of October, 1995, by and among Perusahaan Pertambangan
                  Minyak Dan Gas Bumi Negara ("Pertamina"); TOTAL
                  Indonesie and Indonesia Petroleum, Ltd., (collectively
                  referred to as the "TOTAL Group"); Virginia Indonesia
                  Company, LASMO Sanga Sanga Limited, OPICOIL Houston,
                  Inc., Union Texas East Kalimantan Limited, Universe Gas
                  & Oil Company, Inc., and Virginia International Company
                  (collectively referred to as the "VICO Group");
                  Indonesia Petroleum, Ltd., in respect of its interest
                  in a certain portion of the Attaka Unit (referred to as
                  "INPEX Attaka"); and Unocal Indonesia Company (referred
                  to as "UNOCAL") (the TOTAL Group, the VICO Group, INPEX
                  Attaka, and UNOCAL each referred to as an "East
                  Kalimantan Contractor Group" and collectively called
                  the "East Kalimantan Contractors").  (filed as Exhibit
                  (10)-53- to the Company's 1995 Form 10-K (No. 1-8791)).*









                      * Incorporated herein by reference.

                                      -64-

<PAGE>   66



         (10)-54- Package V Supply Agreement for Natural Gas in Support
                  of the 1973 LNG Sales Contract Extension, dated June
                  16, 1995, effective October 6, 1994, between Pertamina
                  and Virginia Indonesia Company, LASMO Sanga Sanga
                  Limited, OPICOIL Houston, Inc., Union Texas East
                  Kalimantan Limited, Universe Gas and Oil Company, Inc.
                  and Virginia International Company (filed as Exhibit
                  10.8 to the Union Texas Petroleum Holdings, Inc. Form
                  10-Q for the quarter ended September 30, 1995
                  (Commission File No. 1-9010)).*

         (10)-55- Package V Supply Agreement (1995 - 1999 LNG Sales to
                  Korea Gas Corp.) dated June 16, 1995, between Pertamina
                  and Virginia Indonesia Company, LASMO Sanga Sanga
                  Limited, Opicoil Houston, Inc., Union Texas East
                  Kalimantan Limited, Universe Gas & Oil Company, Inc.
                  and Virginia International Company.  (filed as Exhibit
                  (10)-55- to the Company's 1995 Form 10-K (No. 1-8791)).*

         (10)-56- Package V Supply Agreement (1998 - 1999 LNG Sales to
                  Chinese Petroleum Corporation), dated as of June 16,
                  1995, between Pertamina and Virginia Indonesia Company,
                  LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union
                  Texas East Kalimantan Limited, Universe Gas & Oil
                  Company, Inc. and Virginia International Company.
                  (filed as Exhibit (10)-56- to the Company's 1995 Form
                  10-K (No. 1-8791)).*

         (10)-57- Tripartite Agreement Regarding Producer Contributions
                  to Dwiputrai Costs, dated as of January 1, 1995, by and
                  among Perusahaan Pertambangan Minyak Dan Gas Bumi
                  Negara ("Pertamina"); Mobil Oil Indonesia Inc.
                  ("Mobil"); and Virginia Indonesia Company, Total
                  Indonesie, and Unocal Indonesia Company, acting on
                  behalf of themselves and all other LNG producers in the
                  East Kalimantan Production Sharing Contracts
                  (collectively, the "East Kalimantan Producers").
                  (filed as Exhibit(10)-57- to the Company's 1995 Form
                  10-K (No. 1-8791)).*

         (10)-58- Amendment No. 1 to Amended and Restated Badak Trustee
                  and Paying Agent Agreement, dated as of July 1, 1995,
                  among Continental Bank International, as Trustee, and
                  the Producers (filed as Exhibit 10.4 to the Union Texas
                  Petroleum Holdings, Inc. Form 10-Q for the quarter
                  ended September 30, 1995 (Commission File No. 1-9019)).*







                      * Incorporated herein by reference.

                                      -65-

<PAGE>   67



         (10)-59- Amendment No. 1 to Bontang III Loan Agreement, dated as
                  of July 1, 1995, among Continental Bank International,
                  as Trustee under the Bontang III Trustee and Paying
                  Agent Agreement, Train-E Finance Co., Ltd., as Tranche
                  A Lender, and The Industrial Bank of Japan Trust
                  Company, as Agent on behalf of the Majority Tranche B
                  Lenders (filed as Exhibit 10.6 to the Union Texas
                  Petroleum Holdings., Inc. Form 10-Q for the quarter
                  ended September 30, 1995 (Commission File No. 1-9019)).*

         (10)-60- Amendment No. 1 to Amended and Restated Bontang Excess
                  Sales Trustee and Paying Agent Agreement, dated as of
                  July 1, 1995, among Continental Bank International, as
                  Trustee, and the Producers (filed as Exhibit 10.5 to
                  the Union Texas Petroleum Holdings, Inc. Form 10-Q for
                  the quarter ended September 30, 1995 (Commission File
                  No. 1-9019)).*

         (10)-61- Bontang V Loan Agreement, dated as of July 1, 1995,
                  among BankAmerica International, as Trustee under the
                  Bontang V Trustee and Paying Agent Agreement, as
                  Borrower, Bontang Train-G Project Finance Co., Ltd.
                  ("Tranche A Lender"), the banks named therein as
                  Tranche B Lenders, The Long-Term Credit Bank of Japan,
                  Limited, New York Branch ("Facility Agent"), The Fuji
                  Bank, Limited ("Intercreditor Agent"), Credit Lyonnais
                  ("Technical Agent"), and Credit Lyonnais, The Fuji
                  Bank, Limited and The Long-Term Credit Bank of Japan,
                  Limited (collectively, the "Arrangers") (filed as
                  Exhibit 10.1 to the Union Texas Petroleum Holdings,
                  Inc. Form 10-Q for the quarter ended September 30, 1995
                  (Commission File No. 1-9019)).*

         (10)-62- Bontang V Producers Agreement, dated as of July 1,
                  1995, by Perusahaan Pertambangan Minyak Dan Gas Bumi
                  Negara, Virginia Indonesia Company, OPICOIL Houston,
                  Inc., Virginia International Company, LASMO Sanga Sanga
                  Limited, Union Texas East Kalimantan Limited, Universe
                  Gas & Oil Company, Inc., Total Indonesie, Unocal
                  Indonesia Company and Indonesia Petroleum, Ltd.
                  (collectively, the "Producers"), in favor of the
                  Tranche A Lender, Facility Agent, Intercreditor Agent,
                  Technical agent and Arrangers (filed as Exhibit 10.2 to
                  the Union Texas Petroleum Holdings, Inc. Form 10-Q for
                  the quarter ended September 30, 1995 (Commission File
                  No. 1-9019)).*

         (10)-63- Bontang V Trustee and Paying Agent Agreement, dated
                  as of July 1, 1995, among the Producers and
                  BankAmerica International, as Trustee and Paying
                  Agent (filed as Exhibit 10.3 to the Union Texas
                  Petroleum Holdings, Inc. Form 10-Q for the quarter
                  ended September 30, 1995 (Commission File No.
                  1-9019)).*

                      * Incorporated herein by reference.

                                      -66-

<PAGE>   68



         (10)-64- Bontang V Disbursement Trustee and Paying Agent
                  Agreement dated as of July 1, 1995, by and among
                  BankAmerica International, not in its individual
                  capacity but solely as trustee and paying agent (in
                  such capacity, the "Bontang V Trustee") under the
                  Bontang V Trustee and Paying Agent Agreement dated as
                  of July 1, 1995, as the same may be amended from time
                  to time (the "Bontang V Trust Agreement"); and
                  BankAmerica International, not in its individual
                  capacity but solely as disbursement trustee and paying
                  agent under this Agreement.  (filed as Exhibit (10)-64-
                  to the Company's 1995 Form 10-K (No. 1-8791)).*

         (10)-65- First Supply Agreement for Package V Excess Sales
                  (1998-1999 LNG Sales to Korea Gas Corporation under
                  Badak V), dated as of May 1, 1996, between Pertamina
                  and Virginia Indonesia Company, Lasmo Sanga Sanga
                  Limited, Opicoil Houston, Inc., Union Texas East
                  Kalimantan Limited, Universe Gas & Oil Company, Inc.
                  And Virginia International Company. (filed as Exhibit
                  10.2 to the Union Texas Petroleum Holdings, Inc. Form
                  10-Q for the quarter ended June 30, 1996 (Commission
                  File No. 1-9019)).*

         (10)-66- Second Supply Agreement for Package V Excess Sales
                  (1998-1999 LNG Sales to Chinese Petroleum Corporation
                  under Badak VI), dated as of May 1, 1996, between
                  Pertamina and Virginia Indonesia Company, Lasmo Sanga
                  Sanga Limited, Opicoil Houston, Inc., Union Texas East
                  Kalimantan Limited, Universe Gas & Oil Company, Inc.
                  and Virginia International Company (filed as Exhibit
                  10.3 to the Union Texas Petroleum Holdings, Inc. Form
                  10-Q for the quarter ended June 30, 1996 (Commission
                  File No. 1-9019)).*

         (10)-67- Package VI Supply Agreement for Natural Gas in Support
                  of 2000-2017 LNG Sales to Korea Gas Corporation under
                  Badak V, dated as of May 1, 1996, between Pertamina and
                  Virginia Indonesia Company, Lasmo Sanga Sanga Limited,
                  Opicoil Houston, Inc., Union Texas Est Kalimantan
                  Limited, Universe Gas & Oil Company, Inc. and Virginia
                  International Company (filed as Exhibit 10.4 to the
                  Union Texas Petroleum Holdings, Inc. Form 10-Q for the
                  quarter ended June 30, 1996 (Commission File No. 1-9019)).*










                      * Incorporated herein by reference.

                                      -67-

<PAGE>   69



         (10)-68- Package VI Supply Agreement for Natural Gas in Support
                  of 2000-2017 LNG Sales to Chinese Petroleum Corporation
                  under Badak VI, dated as of May 1, 1996, between
                  Pertamina and Virginia Indonesia Company, Lasmo Sanga
                  Sanga Limited, Opicoil Houston, Inc., Union Texas East
                  Kalimantan Limited, Universe Gas & Oil Company, Inc.
                  and Virginia International Company (filed as Exhibit
                  10.5 to the Union Texas Petroleum Holdings, Inc. Form
                  10-Q for the quarter ended June 30, 1996 (Commission
                  File No. 1-9019)).*

         (10)-69- First Supply Agreement for Package VI Excess Sales
                  (2003-2008 LNG Sales under the Second Amended and
                  Restated 1981 Badak Sales Contract), dated as of May 1,
                  1996, between Pertamina and Virginia Indonesia Company,
                  Lasmo Sanga Sanga Limited, Opicoil Houston, Inc., Union
                  Texas East Kalimantan Limited, Universe Gas & Oil
                  Company, Inc. and Virginia International Company (filed
                  as Exhibit 10.6 to the Union Texas Petroleum Holdings,
                  Inc. Form 10-Q for the quarter ended June 30, 1996
                  (Commission File No. 1-9019)).*

         (10)-70- Memorandum of Agreement for Purchase and Sale of LNG
                  During 1996 - 1999 between Perusahaan Pertambangan
                  Minyak Dan Gas Bumi Negara ("Pertamina") ("Seller")
                  and Korea Gas Corporation ("Kogas") ("Buyer") for the
                  sale and purchase of certain quantities of LNG.

         (21)-1-  List of Subsidiaries of the Company.

         (23)-1-  Consent of KPMG Peat Marwick LLP.

         (23)-2-  Consent of Ernst & Young LLP.

         (27)-1-  Financial Data Schedule for the twelve months ended December
                  31, 1996.

(c)      Reports on Form 8-K

         No reports on Form 8-K have been filed during the last quarter of the
         fiscal year ended December 31, 1996.









                      * Incorporated herein by reference.

                                      -68-

<PAGE>   70



                                   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.


                              UNIMAR COMPANY


March 21, 1997                By  /S/ WILLIAM M. KRIPS
                                  --------------------
                                  William M. Krips
                                  Chairman of the
                                  Management Board




     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 indicated as of March 21, 1997.




By   /S/ GEORGE W. BERKO                   By     /S/ LARRY D. KALMBACH
     --------------------------                   ---------------------
       George W. Berko                               Larry D. Kalmbach
       Management Board                              Management Board
       (LASMO Representative)                        (UTPH Representative)




By   /S/ JOHN A. HOGAN                     By     /S/ WILLIAM M. KRIPS
     --------------------------                   --------------------
       John A. Hogan                                 William M. Krips
       Management Board                              Chairman of the
       (LASMO Representative)                        Management Board
                                                     (UTPH Representative)



By   /S/ RICHARD L. SMERNOFF               By     /S/ ARTHUR W. PEABODY, JR.
     --------------------------                   --------------------------
       Richard L. Smernoff                           Arthur W. Peabody, Jr.
       Management Board                              Management Board
       (LASMO Representative)                        (UTPH Representative)


                                      -69-

<PAGE>   71



                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                   Sequential
                                                                    Numbered
Exhibit Number                                                        Page
--------------                                                     ----------

The following documents are included as Exhibits to this Report. Unless it has
been indicated that a document listed below is incorporated by reference
herein, copies of the document have been filed herewith.

<S>      <C>                                                          <C> 
(2)-1-   Merger Agreement, dated May 22, 1984, and Amendment
         Agreements thereto, dated June 8, 1984 and June 12,
         1984 (incorporated by reference to Annex A to the
         Prospectus/Proxy Statement included in the Company's
         Registration Statement on Form S-14 (No. 2-93037)).*

(2)-2-   Agreement of Merger, dated as of August 28, 1984
         (incorporated by reference to Annex B to the
         Prospectus/Proxy Statement included in the Company's
         Registration Statement on Form S-14 (No. 2-93037)).*

(2)-3-   Divestiture Agreement, dated June 20, 1984 (filed as
         Exhibit 2.3 to the Company's Registration Statement on
         Form S-14 (No. 2-93037)).*

(3)-1-   Amended and Restated Agreement of General Partnership
         of Unimar Company dated September 11, 1990 between
         Unistar, Inc. and Ultrastar, Inc. (filed as Exhibit
         (3)-4- to the Company's 1990 Form 10-K (No. 18791)).*

(4)-1-   Form of Indenture between Unimar and Irving Trust
         Company, as Trustee (filed as Exhibit 4 to the
         Company's Registration Statement on Form S-14 (No. 2-93037)).*

(4)-2-   First Supplemental Indenture, dated as of October 31,
         1986, to the Indenture between Unimar and Irving Trust
         Co., as Trustee (Exhibit (4)-1 above) (filed as Exhibit
         10.114 to Union Texas Petroleum Holdings, Inc.'s Registration 
         Statement on Form S-1 (No. 33-16267)).*

(10)-1-  Joint Venture Agreement, dated August 8, 1968, among
         Roy M. Huffington, Inc., Virginia International
         Company, Austral Petroleum Gas Corporation, Golden
         Eagle Indonesia, Limited, and Union Texas Far East
         Corporation, as amended (filed as Exhibit 6.6 to
         Registration Statement No. 2-58834 of Alaska Interstate
         Company).*
</TABLE>






                      * Incorporated herein by reference.

                                      -70-

<PAGE>   72



(10)-2- Agreement dated as of October 1, 1979, among the
        parties to the Joint Venture Agreement referred to in
        Exhibit (10)-1- above (filed as Exhibit 5.2 to
        Registration Statement No. 2-66661 of Alaska Interstate
        Company).*

(10)-3- Amendment to the Operating Agreement dated April 1,
        1990, between Roy M. Huffington, Inc., a Delaware
        corporation, Ultramar Indonesia Limited, a Bermuda
        corporation, Virginia Indonesia Company, a Delaware
        corporation, Virginia International Company, a Delaware
        corporation, Union Texas East Kalimantan Limited, a
        Bahamian corporation, and Universe Gas & Oil Company,
        Inc., a Liberian corporation. (filed as Exhibit (10)-3-
        to the Company's 1993 Form 10-K (No. 1-8791)).*

(10)-4- Amended and Restated Production Sharing Contract dated
        April 23, 1990 (effective August 8, 1968 - August 7,
        1998) by and between Perusahaan Pertambangan Minyak Dan
        Gas Bumi Negara (Pertamina) and Roy M. Huffington,
        Inc., Virginia International Company, Virginia
        Indonesia Company, Ultramar Indonesia Limited, Union
        Texas East Kalimantan Limited, Universe Gas & Oil
        Company, Inc. and Huffington Corporation. (filed as
        Exhibit (10)-4- to the Company's 1993 Form 10-K (No. 1- 8791)).*

(10)-5- Production Sharing Contract dated April 23, 1990
        (effective August 8, 1998 - August 7, 2018) between
        Perusahaan Pertambangan Minyak Dan Gas Bumi Negara
        (Pertamina) and Roy M. Huffington, Inc., Virginia
        International Company, Virginia Indonesia Company,
        Ultramar Indonesia Limited, Union Texas East Kalimantan
        Limited, Universe Gas & Oil Company, Inc. and
        Huffington Corporation.  (filed as Exhibit (10)-5- to
        the Company's 1993 Form 10-K (No. 1-8791)).*

(10)-6- Nilam Unit Agreement, effective as of January 1, 1980,
        to establish the manner in which the Joint Venture and
        Total will cooperate to develop the unitized area of
        the Nilam Field.  (filed as Exhibit (10)-58- to the
        Company's 1991 Form 10-K (No. 1-8791)).*

(10)-7- Fourth Amended and Restated Implementation Procedures
        for Crude Oil Liftings, effective as of July 1, 1993,
        among Virginia Indonesia Company, LASMO Sanga Sanga
        Limited, Opicoil Houston, Inc., Union Texas East
        Kalimantan Limited, Universe Gas & Oil Company, Inc.
        and Virginia International Company.  (filed as Exhibit
        (10)-7- to the Company's 1994 Form 10-K (No. 1-8791)).*





                      * Incorporated herein by reference.

                                      -71-

<PAGE>   73



(10)-8-  Amended and Restated 1973 LNG Sales Contract, dated as
         of the 1st day of January 1990, by and between
         Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as
         Seller, and Chubu Electric Power Co., Inc., The Kansai
         Electric Power Co., Inc., Kyushu Electric Power Co.,
         Inc., Nippon Steel Corporation, Osaka Gas Co., Ltd. and
         Toho Gas Co., Ltd., as Buyers. (filed as Exhibit
         (10)-8- to the Company's 1993 Form 10-K (No. 1-8791)).*

(10)-9-  Amendment to the 1973 LNG Sales Contract dated as of
         the 3rd day of December, 1973, amended by Amendment No.
         1 dated as of the 31st day of August, 1976, and amended
         and restated as of the 1st day of January, 1990 ("1973
         LNG Sales Contract"), is entered into as of the 1st day
         of June, 1992, by and between Perusahaan Pertambangan
         Minyak Dan Gas Bumi Negara, a state enterprise of the
         Republic of Indonesia (Seller), on the one hand, and
         Kyushu Electric Power Co., Inc. (Kyushu Electric),
         Nippon Steel Corporation (Nippon Steel), and Toho Gas
         Co., Ltd. (Toho Gas), all corporations organized and
         existing under the laws of Japan, on the other hand.
         (filed as Exhibit (10)-9- to the Company's 1993 Form
         10-K (No. 1-8791)).*

(10)-10- Amended and Restated Supply Agreement (In Support of
         the Amended and Restated 1973 LNG Sales Contract)
         between Pertamina and Virginia Indonesia Company, LASMO
         Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas
         East Kalimantan Limited, Universe Gas & Oil Company,
         Inc., and Virginia International Company dated
         September 22, 1993, effective December 3, 1973. (filed
         as Exhibit (10)-10- to the Company's 1993 Form 10-K
         (No. 1-8791)).*

(10)-11- Amended and Restated Badak LNG Sales Contract, dated as
         of the 1st day of January, 1990, by and between
         Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as
         Seller, and Chubu Electric Power Co., Inc., The Kansai
         Electric Power Co., Inc., Osaka Gas Co., Ltd. and Toho
         Gas Co., Ltd., as Buyers. (filed as Exhibit (10)-11- to
         the Company's 1993 Form 10-K (No. 1-8791)).*

(10)-12- Supply Agreement, dated as of April 14, 1981 between
         Perusahaan Pertambangan Minyak Dan Gas Bumi Negara
         (Pertamina) and the parties to the Joint Venture
         Agreement, including the Company. (filed as Exhibit
         (10)-12- to the Company's 1993 Form 10-K (No. 1-8791)).*







                      * Incorporated herein by reference.

                                      -72-

<PAGE>   74



(10)-13- Seventh Supply Agreement for Excess Sales (Additional
         Fixed Quantities under Badak LNG Sales Contract as a
         Result of Contract Amendment and Restatement) between
         Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and
         Virginia Indonesia Company, Opicoil Houston, Inc.,
         Ultramar Indonesia Limited, Union Texas East Kalimantan
         Limited, Universe Gas & Oil Company, Inc. and Virginia
         International Company, dated September 28, 1992, but
         effective as of January 1, 1990. (filed as Exhibit
         (10)-13- to the Company's 1993 Form 10-K (No. 1-
         8791)).*

(10)-14- Bontang II Trustee and Paying Agent Agreement Amended
         and Restated as of July 15, 1991 among Perusahaan
         Pertambangan Minyak Dan Gas Bumi Negara, Virginia
         Indonesia Company, Virginia International Company,
         Union Texas East Kalimantan Limited, Ultramar Indonesia
         Limited, Opicoil Houston, Inc., Universe Gas & Oil
         Company, Inc., Total Indonesie, Unocal Indonesia, Ltd.,
         Indonesia Petroleum, Ltd. and Continental Bank
         International. (filed as Exhibit (10)-14- to the
         Company's 1993 Form 10-K (No. 1-8791)).*

(10)-15- Producers Agreement No. 2 dated as of June 9, 1987 by
         Perusahaan Pertambangan Minyak Dan Gas Bumi Negara
         (Pertamina), Roy M. Huffington, Inc., Virginia
         International Company, Ultramar Indonesia Limited,
         Virginia Indonesia Company, Union Texas East Kalimantan
         Limited, Universe Tankships, Inc., Huffington
         Corporation in favor of The Industrial Bank of Japan
         Trust Company as Agent (filed as Exhibit (10)-30- to
         the Company's 1987 Form 10-K (No. 1-8791)).*

(10)-16- Badak III LNG Sales Contract between Perusahaan
         Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) as
         Seller and Chinese Petroleum Corporation as Buyer
         signed on March 19, 1987.  (filed as Exhibit (10)-16-
         to the Company's 1994 Form 10-K (No. 1-8791)).*

(10)-17- Badak III LNG Sales Contract Supply Agreement, dated
         October 19, 1987 among Perusahaan Pertambangan Minyak
         Dan Gas Bumi Negara (Pertamina) and the parties to the
         Joint Venture Agreement. (filed as Exhibit (10)-17- to
         the Company's 1993 Form 10-K (No. 1-8791)).*

(10)-18- LNG Sales and Purchase Contract (Korea II) effective
         May 7, 1991 between Perusahaan Pertambangan Minyak
         Dan Gas Bumi Negara and Korea Gas Corporation. (filed
         as Exhibit (10)-18- to the Company's 1993 Form 10-K 
         (No. 1-8791)).*





                      * Incorporated herein by reference.

                                      -73-

<PAGE>   75



(10)-19- Schedule A to the LNG Sales and Purchase Contract
         (Korea II FOB) between Perusahaan Pertambangan Minyak
         Dan Gas Bumi Negara and Korea Gas Corporation. (filed
         as Exhibit (10)-19- to the Company's 1993 Form 10-K
         (No. 1-8791)).*

(10)-20-  Bontang III Producers Agreement, dated February 9,
          1988, among Perusahaan Pertambangan Minyak Dan Gas Bumi
          Negara (Pertamina) and the parties to the Joint Venture
          Agreement. (filed as Exhibit (10)-20- to the Company's
          1993 Form 10-K (No. 1-8791)).*

(10)-21-  Amendment No. 1 to Bontang III Producers Agreement
          dated as of May 31, 1988 among Perusahaan Pertambangan
          Minyak Dan Gas Bumi Negara, Roy M. Huffington, Inc.,
          Huffington Corporation, Virginia International Company,
          Virginia Indonesia Company, Ultramar Indonesia Limited,
          Union Texas East Kalimantan Limited, Universe
          Tankships, Inc., Total Indonesie, Unocal Indonesia,
          Ltd., Indonesia Petroleum, Ltd. and Train-E Finance
          Co., Ltd., as Tranche A Lender, The Industrial Bank of
          Japan Trust Company, as Agent and The Industrial Bank
          of Japan Trust Company on behalf of the Tranche B
          Lenders. (filed as Exhibit (10)-21- to the Company's
          1993 Form 10-K (No. 1-8791)).*

(10)-22-  $316,000,000 Bontang III Loan Agreement dated February 9, 1988 
          among Continental Bank International as Trustee, Train-E Finance 
          Co., Ltd. as Tranche A Lender and The Industrial Bank of Japan 
          Trust Company as Agent. (filed as Exhibit (10)-23- to the Company's 
          1993 Form 10-K (No. 1-8791)).*

(10)-23-  Bontang III Trustee and Paying Agent Agreement, dated
          February 9, 1988, among Pertamina, Roy M. Huffington,
          Inc., Huffington Corporation, Virginia International
          Company, VICO, Ultrastar Indonesia Limited, Union Texas
          East Kalimantan Limited, Universe Tankships, Inc.,
          Total Indonesia, Unocal Indonesia, Ltd., Indonesia
          Petroleum, Ltd. and Continental Bank International
          (filed as Exhibit 10.42 to the Union Texas Petroleum
          Holdings, Inc.'s 1991 Form 10-K (Commission File No. 1-
          9019)).*

(10)-24- Amendment No. 1 to Bontang III Trustee and Paying Agent
         Agreement, dated as of December 11, 1992, among
         Pertamina, VICO, Virginia International Company,
         Ultramar Indonesia Limited, Union Texas East Kalimantan
         Limited, Opicoil Houston, Inc., Universe Gas & Oil
         Company, Inc., Total Indonesia, Unocal Indonesia Ltd.,
         Indonesia Petroleum, Ltd. and Continental Bank
         International, as Bontang III Trustee  (filed as
         Exhibit 10.83 to the Union Texas Petroleum Holdings,
         Inc.'s 1992 Form 10-K (Commission File No. 1-9019)).*

                      * Incorporated herein by reference.

                                      -74-

<PAGE>   76



(10)-25- Amended and Restated Debt Service Allocation Agreement
         dated February 9, 1988 among Perusahaan Pertambangan
         Minyak Dan Gas Bumi Negara and Roy M. Huffington, Inc.,
         Virginia International Company, Ultramar Indonesia
         Limited, Virginia Indonesia Company, Union Texas East
         Kalimantan Limited, Universe Tankships, Inc.,
         Huffington Corporation, Total Indonesie, Unocal
         Indonesia, Ltd. and Indonesia Petroleum, Ltd.  (filed
         as Exhibit (10)-26- to the Company's 1994 Form 10-K
         (No. 1-8791)).*

(10)-26- Letter agreement between Perusahaan Pertambangan Minyak
         Dan Gas Bumi Negara and Chinese Petroleum Corporation,
         dated December 1, 1989. (filed as Exhibit (10)-27- to
         the Company's 1993 Form 10-K (No. 1-8791)).*

(10)-27- Badak IV LNG Sales Contract dated October 23, 1990
         between Perusahaan Pertambangan Minyak Dan Gas Bumi
         Negara (Pertamina), as Seller and Osaka Gas Co., Ltd.,
         Tokyo Gas Co., Ltd. and Toho Gas Co., Ltd., as Buyers.
         (filed as Exhibit (10)-29- to the Company's 1993 Form
         10-K (No. 1-8791)).*

(10)-28- LNG Sales Contract dated as of October 13, 1992 between
         Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as
         Seller and Hiroshima Gas Co., Ltd. and Nippon Gas Co.,
         Ltd., as Buyers. (filed as Exhibit (10)-30- to the
         Company's 1993 Form 10-K (No. 1-8791)).*

(10)-29- LNG Sales Contract dated as of October 13, 1992
         between Perusahaan Pertambangan Minyak Dan Gas Bumi
         Negara, as Seller and Osaka Gas Co., Ltd., as Buyer.
         (filed as Exhibit (10)-31- to the Company's 1993 Form
         10-K (No. 1-8791)).*

(10)-30- Supply Agreement for Natural Gas to Badak IV LNG Sales
         Contract dated August 12, 1991 between Perusahaan
         Pertambangan Minyak Dan Gas Bumi Negara, Virginia
         Indonesia Company, Opicoil Houston, Inc., Ultramar
         Indonesia Limited, Union Texas East Kalimantan Limited,
         Universe Gas & Oil Company, Inc. and Virginia
         International Company. (filed as Exhibit (10)-32- to
         the Company's 1993 Form 10-K (No. 1-8791)).*

(10)-31- Second Supply Agreement for Package IV Excess Sales
         (Osaka Gas Contract - Package IV Quantities) between
         Pertamina and Virginia Indonesia Company, LASMO Sanga
         Sanga Limited, Opicoil Houston, Inc., Union Texas East
         Kalimantan Limited, Universe Gas & Oil Company, Inc.,
         and Virginia International Company dated September 22,
         1993, effective January 1, 1991. (filed as Exhibit
         (10)-33- to the Company's 1993 Form 10-K (No. 1-8791)).*


                      * Incorporated herein by reference.

                                      -75-

<PAGE>   77



(10)-32- Third Supply Agreement for Package IV Excess Sales
         (Toho Gas Contract - Package IV Quantities) between
         Pertamina and Virginia Indonesia Company, LASMO Sanga
         Sanga Limited, Opicoil Houston, Inc., Union Texas East
         Kalimantan Limited, Universe Gas & Oil Company, Inc.,
         and Virginia International Company dated September 28,
         effective January 1, 1991. (filed as Exhibit (10)-34-
         to the Company's 1993 Form 10-K (No. 1-8791)).*

(10)-33- Eleventh Supply Agreement for Package IV Excess Sales
         (1973 Contract Build-Down Quantities) between Pertamina
         and Virginia Indonesia Company, LASMO Sanga Sanga
         Limited, Opicoil Houston, Inc., Union Texas East
         Kalimantan Limited, Universe Gas & Oil Company, Inc.,
         and Virginia International Company dated September 22,
         1993, effective January 1, 1990. (filed as Exhibit
         (10)-35- to the Company's 1993 Form 10-K (No. 1-8791)).*

(10)-34- Bontang IV Producers Agreement dated August 26, 1991 by
         Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
         Virginia Indonesia Company, Opicoil Houston, Inc.,
         Virginia International Company, Ultramar Indonesia
         Limited, Union Texas East Kalimantan Limited, Universe
         Gas & Oil Company, Inc., Total Indonesie, Unocal
         Indonesia, Ltd. and Indonesia Petroleum, Ltd., in favor
         of The Chase Manhattan Bank, N.A. as Agent for the
         Lenders. (filed as Exhibit (10)-36- to the Company's
         1993 Form 10-K (No. 1-8791)).*

(10)-35- $750,000,000 Bontang IV Loan Agreement dated August 26,
         1991 among Continental Bank International as Trustee
         under the Bontang IV Trustee and Paying Agent Agreement
         as Borrower, Chase Manhattan Asia Limited and The
         Mitsubishi Bank, Limited as Coordinators, the other
         banks and financial institutions named herein as
         Arrangers, Co-Arrangers, Lead Managers, Managers, Co-
         Managers and Lenders, The Chase Manhattan Bank, N.A.
         and the Mitsubishi Bank, Limited as Co-Agents and The
         Chase Manhattan Bank, N.A. as Agent. (filed as Exhibit
         (10)-37- to the Company's 1993 Form 10-K (No. 1-8791)).*

(10)-36- Bontang IV Trustee and Paying Agent Agreement dated
         August 26, 1991 among Perusahaan Pertambangan Minyak
         Dan Gas Bumi Negara, Virginia Indonesia Company,
         Opicoil Houston, Inc., Virginia International Company,
         Ultramar Indonesia Limited, Union Texas East Kalimantan
         Limited, Universe Gas & Oil Company, Inc., Total
         Indonesie, Unocal Indonesia, Ltd., Indonesia Petroleum,
         Ltd. and Continental Bank International. (filed as
         Exhibit (10)-38- to the Company's 1993 Form 10-K (No.
         1-8791)).*


                      * Incorporated herein by reference.

                                      -76-

<PAGE>   78



(10)-37- Amended and Restated Bontang Processing Agreement dated
         February 9, 1988 among Perusahaan Pertambangan Minyak
         Dan Gas Bumi Negara and Roy M. Huffington, Inc.,
         Huffington Corporation, Virginia International Company,
         Virginia Indonesia Company, Ultramar Indonesia Limited,
         Union Texas East Kalimantan Limited, Universe
         Tankships, Inc., Total Indonesie, Unocal Indonesia,
         Ltd., Indonesia Petroleum, Ltd. and P.T. Badak Natural
         Gas Liquefaction Company (filed as Exhibit (10)-39- to
         the Company's 1988 Form 10-K (No. 1-8791)).*

(10)-38- Bontang LPG Sales and Purchase Contract between
         Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as
         Seller, and National Federation of Agricultural Co-
         Operative Associations (Zen-Noh), as Buyer, dated
         February 21, 1992. (filed as Exhibit (10)-42- to the
         Company's 1993 Form 10-K (No. 1-8791)).*

(10)-39- Bontang LPG Sales and Purchase Contract between
         Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as
         Seller, and Japan Indonesia Oil Co., Ltd., as Buyer,
         dated February 20, 1992. (filed as Exhibit (10)-43- to
         the Company's 1993 Form 10-K (No. 1-8791)).*

(10)-40- Arun and Bontang LPG Sales and Purchase Contract
         between Perusahaan Pertambangan Minyak Dan Gas Bumi
         Negara (Pertamina) as Seller and Mitsubishi
         Corporation, Cosmo Oil Co., Ltd., Nippon Petroleum Gas
         Co., Ltd., Showa Shell Sekiyu K.K., Kyodo Oil Co.,
         Ltd., Idemitsu Kosan Co., Ltd. and Mitsui Liquefied Gas
         Co., Ltd. as Buyers dated July 15, 1986.  (filed as
         Exhibit (10)-42- to the Company's 1994 Form 10-K (No.
         1-8791)).*

(10)-41- Amendments to Arun and Bontang LPG Sales and Purchase
         Contract, dated October 5, 1994, between Pertamina, as
         Seller, and Mitsubishi Corporation, Cosmo Oil Co.,
         Ltd., Nippon Petroleum Gas Co., Ltd., Showa Shell
         Sekiyu K.K., Japan Energy Corporation, Idemitsu Kosan
         Co., Ltd., and Mitsui Oil & Gas Co., Ltd., as Buyers.
         (filed as Exhibit 10.88 to the Union Texas Petroleum
         Holdings, Inc.'s 1994 Form 10-K (Commission File No. 1-
         9019)).*

(10)-42- Bontang LPG Supply Agreement, dated November 17, 1987,
         between Perusahaan Pertambangan Minyak Dan Gas Bumi
         Negara (Pertamina) and the parties to the Joint Venture
         Agreement. (filed as Exhibit (10)-45- to the Company's
         1993 Form 10-K (No. 1-8791)).*






                      * Incorporated herein by reference.

                                      -77-

<PAGE>   79



(10)-43- Advance Payment Agreement between Perusahaan
         Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and
         Arun Bontang Project Finance Co., Ltd., dated February
         16, 1987 (filed as Exhibit (4)-15- to the Company's
         1986 Form 10-K (No. 1-8791)).*

(10)-44- Agreement and Plan of Reorganization of ENSTAR
         Corporation, dated December 22, 1989, by and among
         Unimar Company, Ultrastar, Inc., Unistar, Inc., ENSTAR
         Corporation, Newstar Inc., Union Texas Development
         Corporation, Union Texas Petroleum Corporation and
         Ultramar America Limited. (filed as Exhibit (10)-47- to
         the Company's 1993 Form 10-K (No. 1-8791)).*

(10)-45- Amendment to Agreement and Plan of Reorganization of
         ENSTAR Corporation, dated May 1, 1990, by and among
         Unimar Company, Ultrastar, Inc., Unistar, Inc.,
         ENSTAR Corporation, Ultramar Production Company,
         Union Texas Development Corporation, Union Texas
         Petroleum Corporation and Ultramar America Limited.
         (filed as Exhibit (10)-48- to the Company's 1993 Form
         10-K (No. 1-8791)).*

(10)-46- Addendum to Badak IV LNG Sales Contract Supply
         Agreement (effective October 23, 1990), dated January
         31, 1994, by and between Perusahaan Pertambangan Minyak
         Dan Gas Bumi Negara ("Pertamina") and Virginia
         Indonesia Company ("VICO"), LASMO Sanga Sanga Limited,
         Opicoil Houston, Inc., Union Texas East Kalimantan
         Limited, Universe Gas & Oil Company, Inc., and Virginia
         International Company. (filed as Exhibit (10)-48- to
         the Company's 1994 Form 10-K (No. 1-8791)).*

(10)-47- Memorandum of Agreement for Purchase and Sale of LNG
         During 1995 - 1999 between Perusahaan Pertambangan
         Minyak Dan Gas Bumi Negara ("Pertamina") ("Seller")
         and Korea Gas Corporation ("KGC") ("Buyer") for the
         sale and purchase of certain quantities of LNG.
         (filed as Exhibit (10)-49- to the Company's 1994 Form
         10-K (No. 1-8791)).*

(10)-48- Second Amended and Restated 1973 LNG Sales Contract,
         dated as of August 3, 1995 between Perusahaan
         Pertambangan Minyak Dan Gas Bumi Negara ("Pertamina"),
         as Seller, and Chubu Electric Power Co., Inc., The
         Kansai Electric Power Co., Inc/. Kyushu Electric Power
         Co., Inc., Nippon Steel Corporation, Osaka Gas Co.,
         Ltd. and Toho Gas Co., Ltd., as the Buyers, with
         related letter agreement, dated August 3, 1995, between
         Seller and Buyers (filed as Exhibit 10.7 to the Union
         Texas Petroleum Holdings, Inc. Form 10-Q for quarter
         ended September 30, 1995 (Commission File No. 1-
         9019)).*


                      * Incorporated herein by reference.

                                      -78-

<PAGE>   80



(10)-49- Second Amended and Restated 1981 Badak LNG Sales
         Contract, dated as of August 3, 1995, between
         Pertamina, as Seller, and Chubu Electric Power Co.,
         Inc., The Kansai Electric Power Co., Inc., Osaka Gas
         Co., Ltd. and Toho Gas Co., Ltd., as Buyers with
         related letter agreement, dated August 3, 1995, between
         Seller and Buyers. (filed as Exhibit 10.106 to the
         Union Texas Petroleum Holdings, Inc.'s 1995 Form 10-K
         (Commission File No. 1-9019)).*

(10)-50- LNG Sales and Purchase Contract (Badak V) dated August
         12, 1995, between Pertamina and Korea Gas Corporation.
         (filed as Exhibit 10.107 to the Union Texas Petroleum
         Holdings, Inc.'s 1995 Form 10-K (Commission File No. 1-
         9019)).*

(10)-51- LNG Sales and Purchase Contract (Badak VI), dated
         October 25, 1995, between Pertamina and Chinese
         Petroleum Corporation. (filed as Exhibit 10.108 to the
         Union Texas Petroleum Holdings, Inc.'s 1995 Form 10-K
         (Commission File No. 1-9019)).*

(10)-52- Allocation of Supply Entitlements between the Arun and
         Bontang Plants for LNG Sales (effective January 1,
         1995).  (filed as Exhibit (10)-52- to the Company's
         1995 Form 10-K (No. 1-8791)).*

(10)-53- Memorandum of Understanding  re:  Supply Agreements and
         Package VI Sales dated and effective as of the 27th day
         of October, 1995, by and among Perusahaan Pertambangan
         Minyak Dan Gas Bumi Negara ("Pertamina"); TOTAL
         Indonesie and Indonesia Petroleum, Ltd., (collectively
         referred to as the "TOTAL Group"); Virginia Indonesia
         Company, LASMO Sanga Sanga Limited, OPICOIL Houston,
         Inc., Union Texas East Kalimantan Limited, Universe Gas
         & Oil Company, Inc., and Virginia International Company
         (collectively referred to as the "VICO Group");
         Indonesia Petroleum, Ltd., in respect of its interest
         in a certain portion of the Attaka Unit (referred to as
         "INPEX Attaka"); and Unocal Indonesia Company (referred
         to as "UNOCAL") (the TOTAL Group, the VICO Group, INPEX
         Attaka, and UNOCAL each referred to as an "East
         Kalimantan Contractor Group" and collectively called
         the "East Kalimantan Contractors").  (filed as Exhibit
         (10)-53- to the Company's 1995 Form 10-K (No. 1-
         8791)).*









                      * Incorporated herein by reference.

                                      -79-

<PAGE>   81



(10)-54- Package V Supply Agreement for Natural Gas in Support
         of the 1973 LNG Sales Contract Extension, dated June
         16, 1995, effective October 6, 1994, between Pertamina
         and Virginia Indonesia Company, LASMO Sanga Sanga
         Limited, OPICOIL Houston, Inc., Union Texas East
         Kalimantan Limited, Universe Gas and Oil Company, Inc.
         and Virginia International Company (filed as Exhibit
         10.8 to the Union Texas Petroleum Holdings, Inc. Form
         10-Q for the quarter ended September 30, 1995
         (Commission File No. 1-9010)).*

(10)-55- Package V Supply Agreement (1995 - 1999 LNG Sales to
         Korea Gas Corp.) dated June 16, 1995, between Pertamina
         and Virginia Indonesia Company, LASMO Sanga Sanga
         Limited, Opicoil Houston, Inc., Union Texas East
         Kalimantan Limited, Universe Gas & Oil Company, Inc.
         and Virginia International Company.  (filed as Exhibit
         (10)-55- to the Company's 1995 Form 10-K (No. 1-
         8791)).*

(10)-56- Package V Supply Agreement (1998 - 1999 LNG Sales to
         Chinese Petroleum Corporation), dated as of June 16,
         1995, between Pertamina and Virginia Indonesia Company,
         LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union
         Texas East Kalimantan Limited, Universe Gas & Oil
         Company, Inc. and Virginia International Company.
         (filed as Exhibit (10)-56- to the Company's 1995 Form
         10-K (No. 1-8791)).*

(10)-57- Tripartite Agreement Regarding Producer Contributions
         to Dwiputrai Costs, dated as of January 1, 1995, by and
         among Perusahaan Pertambangan Minyak Dan Gas Bumi
         Negara ("Pertamina"); Mobil Oil Indonesia Inc.
         ("Mobil"); and Virginia Indonesia Company, Total
         Indonesie, and Unocal Indonesia Company, acting on
         behalf of themselves and all other LNG producers in the
         East Kalimantan Production Sharing Contracts
         (collectively, the "East Kalimantan Producers").
         (filed as Exhibit(10)-57- to the Company's 1995 Form
         10-K (No. 1-8791)).*

(10)-58- Amendment No. 1 to Amended and Restated Badak Trustee
         and Paying Agent Agreement, dated as of July 1, 1995,
         among Continental Bank International, as Trustee, and
         the Producers (filed as Exhibit 10.4 to the Union Texas
         Petroleum Holdings, Inc. Form 10-Q for the quarter
         ended September 30, 1995 (Commission File No. 1-
         9019)).*







                      * Incorporated herein by reference.

                                      -80-

<PAGE>   82



(10)-59- Amendment No. 1 to Bontang III Loan Agreement, dated as
         of July 1, 1995, among Continental Bank International,
         as Trustee under the Bontang III Trustee and Paying
         Agent Agreement, Train-E Finance Co., Ltd., as Tranche
         A Lender, and The Industrial Bank of Japan Trust
         Company, as Agent on behalf of the Majority Tranche B
         Lenders (filed as Exhibit 10.6 to the Union Texas
         Petroleum Holdings., Inc. Form 10-Q for the quarter
         ended September 30, 1995 (Commission File No. 1-
         9019)).*

(10)-60- Amendment No. 1 to Amended and Restated Bontang Excess
         Sales Trustee and Paying Agent Agreement, dated as of
         July 1, 1995, among Continental Bank International, as
         Trustee, and the Producers (filed as Exhibit 10.5 to
         the Union Texas Petroleum Holdings, Inc. Form 10-Q for
         the quarter ended September 30, 1995 (Commission File
         No. 1-9019)).*

(10)-61- Bontang V Loan Agreement, dated as of July 1, 1995,
         among BankAmerica International, as Trustee under the
         Bontang V Trustee and Paying Agent Agreement, as
         Borrower, Bontang Train-G Project Finance Co., Ltd.
         ("Tranche A Lender"), the banks named therein as
         Tranche B Lenders, The Long-Term Credit Bank of Japan,
         Limited, New York Branch ("Facility Agent"), The Fuji
         Bank, Limited ("Intercreditor Agent"), Credit Lyonnais
         ("Technical Agent"), and Credit Lyonnais, The Fuji
         Bank, Limited and The Long-Term Credit Bank of Japan,
         Limited (collectively, the "Arrangers") (filed as
         Exhibit 10.1 to the Union Texas Petroleum Holdings,
         Inc. Form 10-Q for the quarter ended September 30, 1995
         (Commission File No. 1-9019)).*

(10)-62- Bontang V Producers Agreement, dated as of July 1,
         1995, by Perusahaan Pertambangan Minyak Dan Gas Bumi
         Negara, Virginia Indonesia Company, OPICOIL Houston,
         Inc., Virginia International Company, LASMO Sanga Sanga
         Limited, Union Texas East Kalimantan Limited, Universe
         Gas & Oil Company, Inc., Total Indonesie, Unocal
         Indonesia Company and Indonesia Petroleum, Ltd.
         (collectively, the "Producers"), in favor of the
         Tranche A Lender, Facility Agent, Intercreditor Agent,
         Technical agent and Arrangers (filed as Exhibit 10.2 to
         the Union Texas Petroleum Holdings, Inc. Form 10-Q for
         the quarter ended September 30, 1995 (Commission File
         No. 1-9019)).*

(10)-63- Bontang V Trustee and Paying Agent Agreement, dated
         as of July 1, 1995, among the Producers and
         BankAmerica International, as Trustee and Paying
         Agent (filed as Exhibit 10.3 to the Union Texas
         Petroleum Holdings, Inc. Form 10-Q for the quarter
         ended September 30, 1995 (Commission File No.
         1-9019)).*

                      * Incorporated herein by reference.

                                      -81-

<PAGE>   83



(10)-64- Bontang V Disbursement Trustee and Paying Agent Agreement dated as of
         July 1, 1995, by and among BankAmerica International, not in its
         individual capacity but solely as trustee and paying agent (in such
         capacity, the "Bontang V Trustee") under the Bontang V Trustee and
         Paying Agent Agreement dated as of July 1, 1995, as the same may be
         amended from time to time (the "Bontang V Trust Agreement"); and
         BankAmerica International, not in its individual capacity but solely
         as disbursement trustee and paying agent under this Agreement. (filed
         as Exhibit (10)-64- to the Company's 1995 Form 10-K (No. 1-8791)).*

(10)-65- First Supply Agreement for Package V Excess Sales (1998-1999 LNG Sales
         to Korea Gas Corporation under Badak V), dated as of May 1, 1996,
         between Pertamina and Virginia Indonesia Company, Lasmo Sanga Sanga
         Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited,
         Universe Gas & Oil Company, Inc. And Virginia International Company.
         (filed as Exhibit 10.2 to the Union Texas Petroleum Holdings, Inc.
         Form 10-Q for the quarter ended June 30, 1996 (Commission File No.
         1-9019)).*

(10)-66- Second Supply Agreement for Package V Excess Sales (1998-1999 LNG
         Sales to Chinese Petroleum Corporation under Badak VI), dated as of
         May 1, 1996, between Pertamina and Virginia Indonesia Company, Lasmo
         Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East
         Kalimantan Limited, Universe Gas & Oil Company, Inc. and Virginia
         International Company (filed as Exhibit 10.3 to the Union Texas
         Petroleum Holdings, Inc. Form 10-Q for the quarter ended June 30, 1996
         (Commission File No. 1-9019)).*

(10)-67- Package VI Supply Agreement for Natural Gas in Support of 2000-2017
         LNG Sales to Korea Gas Corporation under Badak V, dated as of May 1,
         1996, between Pertamina and Virginia Indonesia Company, Lasmo Sanga
         Sanga Limited, Opicoil Houston, Inc., Union Texas Est Kalimantan
         Limited, Universe Gas & Oil Company, Inc. and Virginia International
         Company (filed as Exhibit 10.4 to the Union Texas Petroleum Holdings,
         Inc. Form 10-Q for the quarter ended June 30, 1996 (Commission File
         No. 1- 9019)).*










                      * Incorporated herein by reference.

                                      -82-

<PAGE>   84


(10)-68- Package VI Supply Agreement for Natural Gas in Support of 2000-2017
         LNG Sales to Chinese Petroleum Corporation under Badak VI, dated as of
         May 1, 1996, between Pertamina and Virginia Indonesia Company, Lasmo
         Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East
         Kalimantan Limited, Universe Gas & Oil Company, Inc. and Virginia
         International Company (filed as Exhibit 10.5 to the Union Texas
         Petroleum Holdings, Inc. Form 10-Q for the quarter ended June 30, 1996
         (Commission File No. 1-9019)).*

(10)-69- First Supply Agreement for Package VI Excess Sales (2003-2008 LNG
         Sales under the Second Amended and Restated 1981 Badak Sales
         Contract), dated as of May 1, 1996, between Pertamina and Virginia
         Indonesia Company, Lasmo Sangga Sanga Limited, Opicoil Houston, Inc.,
         Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc.
         and Virginia International Company (filed as Exhibit 10.6 to the Union
         Texas Petroleum Holdings, Inc. Form 10-Q for the quarter ended June
         30, 1996 (Commission File No. 1-9019)).*

(10)-70- Memorandum of Agreement for Purchase and Sale of LNG During 1996 -
         1999 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara
         ("Pertamina") ("Seller") and Korea Gas Corporation ("Kogas") ("Buyer")
         for the sale and purchase of certain quantities of LNG.

(21)-1-  List of Subsidiaries of the Company.

(23)-1-  Consent of KPMG Peat Marwick LLP.

(23)-2-  Consent of Ernst & Young LLP.

(27)-1-  Financial Data Schedule for the twelve months ended December 31, 1996.

                      * Incorporated herein by reference.

                                      -83-