Annual Report (Form 10-K), fiscal year 1993

ITEM 1. BUSINESS.
GENERAL
Presidio Oil Company is an independent oil and gas company organized under the laws of the State of Delaware in April 1976 to continue the business of Presidio Exploration, Inc. (organized in 1968) of engaging, primarily through subsidiaries, in onshore oil and gas exploration, development and production in selected regions in the continental United States. The Company maintains its corporate offices at 5613 DTC Parkway, Suite 750, Englewood, Colorado 80111-3065. Its telephone number at that location is (303) 773-0100. Unless the context otherwise requires, all references in this Annual Report on Form 10-K (this "Report") to "Presidio" or the "Company" are to Presidio Oil Company and its consolidated subsidiaries.
The Company conducts its exploration, development and production operations in three regional areas: (i) the Rocky Mountains, with operations primarily in Wyoming and North Dakota, (ii) the Mid-Continent, with operations primarily in southeastern New Mexico and west Texas, western Oklahoma and south Louisiana, and (iii) West Virginia, with operations primarily in southern West Virginia. Within these regional areas, the Company's operations are concentrated in seven core areas: the Green River Basin in Wyoming; the Powder River Basin in Wyoming; the Williston Basin in North Dakota; the Permian Basin in southeastern New Mexico and west Texas; the Anadarko Basin in western Oklahoma; south Louisiana; and southern West Virginia.
BUSINESS STRATEGY
The Company is committed to a growth strategy that emphasizes oil and gas reserve additions in its seven core areas, both through development drilling and acquisition activity and, to a lesser extent, through exploration drilling. Because the Company controls the operations of most of its producing properties, the Company believes that it has achieved overhead and operating expenses below the independent industry average.
In 1993 Presidio recorded substantial success in adding .8 million barrels ("MMBbls") of oil and 52.2 billion cubic feet ("BCF") of gas to its proved hydrocarbon reserves, compared to production of 1.4 MMBbls of oil and 15.3 BCF of gas and sales of lower-margin oil and gas properties consisting of 205,000 barrels of oil and 2.8 BCF of gas, and thereby replacing 204% of its production and property sales at a cost per equivalent barrel of $2.21. In terms of natural gas equivalents, the Company added 57 billion equivalent cubic feet of gas at a finding cost of $.37 per equivalent thousand cubic feet of gas.
Most of this increase in proved reserves resulted from the Company's successful field extension and other developmental operations, with the remainder being principally attributable to the acquisition of additional interests in oil and gas wells operated by the Company (see Note 15 to the Company's Consolidated Financial Statements contained in Item 8 of this Report for detailed information concerning the Company's oil and gas reserves, including certain producing property sales completed subsequent to yearend 1993). Moreover, as a result of these operations, Presidio's proved developed gas reserves increased by 25%, or 33.3 BCF during 1993, from 131.2 BCF to 164.5 BCF, after production of 15.3 BCF during the year.
Presidio's large portfolio of probable reserves, other close-in drilling locations and undeveloped acreage provides significant opportunities for the Company to continue to add to its proved oil and gas reserves in 1994 and thereafter.
In 1994 the Company anticipates that its capital expenditures will total approximately $30.4 million and will be principally devoted to natural gas field development and exploration activities, as follows:
. $26.1 million on development operations and small producing property acquisitions. The development operations will be concentrated in several of the Company's core areas, including: 29 (10 net) wells in the Green River Basin in Wyoming; 16 (5 net) wells in the Powder River Basin in Wyoming; 6 (3 net) wells in the Anadarko Basin in western Oklahoma; and 15 (4 net) wells in southern West Virginia, while the property acquisitions are currently anticipated to involve producing properties located primarily in Wyoming, Oklahoma and Texas.
. $4.3 million on exploratory projects, principally in Wyoming, Louisiana, Oklahoma and Texas.
Moreover, during the 1995 - 1996 period, the Company currently plans to spend a minimum of $25-30 million per annum on capital expenditures, with a substantial portion of such expenditures being devoted to the development of the Company's proved undeveloped hydrocarbon reserves, which totaled 3.1 MMBbls of oil and 138.4 BCF of gas as of December 31, 1993, or 41% of the Company's total proved reserves.
EXPLORATION AND PRODUCTION OPERATIONS
The exploration and production activities of the Company consist of the geological and geophysical evaluation of prospective oil and gas properties, the acquisition of oil and gas leases or other interests in exploratory prospects, the drilling of exploratory test wells, and the development and operation of properties for the production and sale of oil and gas. The Company's drilling activities include participation in a substantial amount of low-risk development drilling operations, as well as in selected high-risk, high-potential exploration prospects. The Company generates most of its exploration prospects, particularly in the Rocky Mountains, through its in-house geological staff. However, exploration and development drilling prospects may be identified by third parties, including independent petroleum consultants and other oil and gas companies through joint interest programs, particularly in the Mid-Continent. All of the drilling activities of the Company are performed by independent drilling contractors. Each of the Company's regional operating areas, and the operations conducted therein, are briefly described below.
ROCKY MOUNTAINS
At December 31, 1993, the Company had 481 gross (193 net) producing wells, 109,300 gross (47,700 net) developed acres and 657,600 gross (248,400 net) undeveloped acres in this area, primarily located in (i) the Moxa Arch and Red Desert areas of the Green River Basin in Wyoming, (ii) the Powder River Basin in Wyoming and (iii) the Williston Basin in North Dakota. The Company operates 349 of these gross wells. For the month ended January 31, 1994, net production from the Rocky Mountain area averaged approximately 31 million cubic feet ("MMCF") of gas and 3.5 thousand barrels ("MBbls") of oil per day, representing approximately 77% of the Company's average daily production for such period. At December 31, 1993 the Rocky Mountain area had proved reserves of 129.5 BCF of gas and 10.3 MMBbls of oil, representing approximately 50% of the Company's total proved oil and gas reserves, of which 92.8 BCF of gas and 8.4 MMBbls of oil were proved developed reserves.
MID-CONTINENT
At December 31, 1993, the Company had 355 gross (100 net) producing wells, 58,800 gross (24,100 net) developed acres and 34,000 gross (11,600 net) undeveloped acres in this area, primarily located in (i) south Louisiana, (ii) the Permian Basin in southeastern New Mexico and west Texas and (iii) the Anadarko Basin in western Oklahoma. The Company operates 112 of these gross wells. For the month ended January 31, 1994, net production from the Mid-Continent area averaged approximately 14 MMCF of gas and .3 MBbls of oil per day, representing approximately 23% of the Company's average daily production for such period.
At December 31, 1993 the Mid-Continent area had proved reserves of 145.4 BCF of gas and 2.7 MMBbls of oil, representing approximately 42% of the Company's total proved oil and gas reserves, of which 71.1 BCF of gas and 1.5 MMBbls of oil were proved developed reserves.
WEST VIRGINIA
At December 31, 1993, as a result of the Company's 1993 drilling program, the Company had 9 gross (2 net) producing wells and 700 gross (100 net) developed acres in this area. The Company also had proved reserves of 28.1 BCF of gas in West Virginia, representing approximately 8% of the Company's total proved oil and gas reserves, of which .6 BCF of gas are proved developed reserves. The undeveloped portion of these reserves, along with approximately 172,900 gross (91,400 net) undeveloped acres, will be developed by the Company and is subject to a joint drilling participation agreement described in Note 13 to the Company's Consolidated Financial Statements contained in Item 8 of this report.
EMPLOYEES
As of February 8, 1994, the Company had 133 employees of which 34 were field employees. The Company's employment level will change over time as required by its operations. In addition, the Company intends to engage the services of independent geological, engineering, land, accounting and other consultants from time to time to assist with its operations.
MARKETS
The Company's gas production has historically been sold under contracts with marketing and transportation companies and with end-users. In past years a surplus of gas has been available to the marketplace in certain areas of the United States, resulting in industry-wide price weakness. During 1993 and early 1994 gas prices strengthened, and the Company benefitted from such improved prices since its contracts with third-party purchasers provide for short-term and/or market sensitive pricing for the majority of its gas production. Moreover, since gas production is a seasonal business with production volumes and product prices generally being lower during the warmer summer months and higher during the colder winter months, the Company has maintained the ability to shift much of its gas production between markets in response to price and seasonal demand fluctuations through the use of such contracts.
The Company markets most of its oil production with independent third-party resellers and refiners at market ("posted") prices. These posted prices generally reflect the prices determined by the trading of West Texas Intermediate ("WTI") oil futures contracts on the New York Mercantile Exchange ("NYMEX"), with adjustments for the geographical area in which the producing properties are located and for the quality of the oil produced. NYMEX prices continue to be influenced by worldwide production levels and a variety of political and economic events over which the Company has no control.
COMPETITION
Competition in the oil and gas industry is intense. Many companies and individuals compete to acquire prospective oil and gas leases and other mineral interests, as well as to obtain exploration and development funding. Many of these competitors are large, well-established companies with substantially larger operating staffs and greater capital resources than the Company, and they have been engaged in the energy business for a much longer period than the Company. The Company may be at a competitive disadvantage with these larger entities.
There is also competition in the marketing of gas, insofar as numerous companies are active gas marketers, including marketing affiliates of interstate pipelines, major integrated oil companies, Canadian gas producers and pipelines, and local and national gas gatherers, brokers and marketers of widely varying sizes, financial resources and experience. Certain competitors have capital resources many times greater than the Company's, and they control substantially greater supplies of gas. Local utilities and distributors of gas (some of which are customers of the Company) are, in some cases, engaged directly and through affiliates in marketing activities that compete with those of the Company.
REGULATION
The Company's oil and gas operations are subject to various federal, state and local governmental regulations. Matters subject to regulation include discharge permits for drilling operations, drilling bonds, reports concerning operations, the spacing of wells, unitization and pooling of properties and taxation. From time to time, regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of oil and gas wells below actual production capacity in order to conserve supplies of oil and gas.
Oil and gas operations are also subject to extensive federal, state and local laws regulating the discharge of materials into the environment or otherwise relating to the protection of human health and the environment. These regulations are often difficult and costly to comply with and carry substantial penalties for failure to comply. In addition, these regulations may restrict the rate of oil and gas production below the rate that would otherwise exist. The regulatory burden on the oil and gas industry increases its cost of doing business and, consequently, affects its profitability. To date, expenditures by the Company related to compliance with these laws have not been significant. The Company believes, however, the trend of more expansive and stricter environmental legislation and regulations, including regulations with respect to the handling and disposal of oil and gas exploration and production wastes and oilfield wastes contaminated by naturally occurring radioactive materials, and the imposition of financial responsibility requirements with respect to environmental cleanup costs (e.g. regulations requiring environmental liability insurance or other types of financial assurance) will continue and may result in additional costs to the Company in the future. For example, amendments to the Resource Conservation and Recovery Act to regulate further the handling, transportation, storage and disposal of oil and gas exploration and production wastes have been considered by Congress and may be adopted. Also, in August 1993 the U.S. Minerals Management Service published an advance notice of its intent to adopt regulations that may require owners of oil and gas facilities that could be the source of an oil spill into waters of the United States to provide $150 million in financial assurances to cover costs that might be incurred by governmental authorities in responding to and cleaning up an oil spill. Such legislation or regulations, if enacted or adopted, could have a significant adverse impact on the Company's operating costs.
ITEM 2.



ITEM 2. PROPERTIES.
EXPLORATION AND PRODUCTION
The Company's operations are concentrated in seven core areas where the Company conducts most of its exploration and development drilling and acquisition activity: the Green River Basin in Wyoming; the Powder River Basin in Wyoming; the Williston Basin in North Dakota; the Permian Basin in southeastern New Mexico and west Texas; the Anadarko Basin in western Oklahoma; south Louisiana; and southern West Virginia. None of the Company's oil and gas production is subject to long-term supply or similar agreements with foreign governments or authorities.
OPERATIONS
At December 31, 1993, the Company operated approximately 77% of the net producing wells in which it owned an interest. The operator of a well supervises production, maintains production records, employs field personnel and performs other functions on behalf of all owners of such operated wells. See "Business - Exploration and Production Operations" contained in Item 1 of this Report for information concerning the Company's operating areas.
The Company's oil and gas operations are subject to all of the operating hazards and risks normally incident to drilling for and producing oil and gas, such as fires, explosions, encountering formations with abnormal pressures, blowouts, cratering and oil spills, any of which can result in loss of hydrocarbons, environmental pollution, personal injury claims and loss of life. Such hazards can also severely damage or destroy equipment, sub-surface structures, surrounding areas or property of others. As protection against such operating hazards, the Company maintains insurance coverage, including operator's extra expense, physical damage on certain risks, employer's liability, comprehensive general liability and workers' compensation. The Company believes that such insurance is adequate and customary for companies of a similar size engaged in operations similar to those of the Company, but losses can occur from uninsurable risks or in amounts in excess of existing insurance coverage. The Company does not carry business interruption insurance in respect of its operations and the occurrence of an event that is not fully covered by insurance could have an adverse impact upon the Company's financial condition and results of operations.
ESTIMATED PROVED RESERVES
The following tables set forth estimates of proved oil and gas reserves and the present value of estimated future net revenues attributable to such reserves, based on the assumptions that oil and gas prices will remain fixed at yearend levels, with escalation up to prices which prevail under fixed and determinable escalation provisions of existing oil and gas contracts, and that operating costs will remain fixed at yearend levels. The present value of the estimated future net revenues from proved oil and gas reserves at the dates indicated below was computed by discounting the aggregate estimated future net revenues by 10% per year. The present value does not represent the fair market value of such reserves. This information is based primarily upon reserve reports prepared by the Company and reviewed by Huddleston & Co., Inc., Houston, Texas (for the years ended December 31, 1993, 1992 and 1991) and Netherland, Sewell & Associates, Inc., Dallas, Texas (for the year ended December 31, 1991), independent petroleum and geological engineering firms.
Proved reserves are the estimated quantities of oil, gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. The estimation of reserves requires substantial judgment on the part of petroleum engineers resulting in imprecise determinations, particularly with respect to new discoveries. The accuracy of any reserve estimate depends on the quality of available data and engineering and geological interpretation and judgement. Results of drilling, testing and production subsequent to the date of the estimate may result in revisions of such estimate. Accordingly, estimates of reserves are often materially different from the quantities of oil and gas that are ultimately recovered and such estimates will change as future production and development information becomes available. The reserve data represents estimates only and should not be construed as being exact.
Estimates of proved reserves at December 31, 1993 have not been previously filed by the Company with, or included in reports to, any federal authority or agency.
(1) Includes proved undeveloped gas reserves of 27.5 BCF and 28.1 BCF at December 31, 1993 and 1992, respectively, which are subject to a joint drilling participation agreement as discussed in Note 13 to the Company's Consolidated Financial Statements contained in Item 8 of this Report. (2) Represents the present value, discounted at 10%, of the estimated future net revenues from proved oil and gas reserves, before a provision for future income taxes. (3) See Note 14 to the Company's Consolidated Financial Statements contained in Item 8 of this Report for information concerning oil and gas property sales completed by the Company subsequent to yearend 1993. (4) As of December 31, 1993 approximately 73% of the Company's proved oil and condensate reserves and approximately 58% of its proved gas reserves were pledged to secure its debt.
See Note 15 to the Company's Consolidated Financial Statements contained in Item 8 of this Report for an analysis of changes in proved oil and gas reserves and changes in the present value of future net revenues.
PRODUCTIVE WELLS AND DEVELOPED ACREAGE
The following table sets forth the Company's developed acreage and productive wells at December 31, 1993. "Gross" refers to the total acres or wells in which the Company has a working interest, and "Net" refers to gross acres or wells multiplied by the percentage of working interest owned by the Company.
(1) Developed acreage is acreage assignable to productive wells. (2) Productive wells consist of producing wells and wells capable of production, including gas wells awaiting pipeline connections or necessary governmental certification to commence deliveries, and oil wells awaiting connection to production facilities. Wells which are completed in more than one producing horizon are counted as one well. The gross wells reported above which had multiple completions totaled 8.
PRODUCTION, UNIT PRICES AND COSTS
Information with respect to production and average unit prices and costs for the years ended December 31, 1993, 1992 and 1991 is set forth below:
(1) Before giving effect to the Company's oil hedging arrangements. The average price increased to $21.19 as a result of such oil hedging arrangements. Such hedging arrangements expired December 31, 1991. (2) In December 1992 the Company sold its West Virginia proved developed properties which had received an above- market contract price for gas sales. The Company's pro forma gas price excluding such West Virginia properties was $1.54 and $1.38 for the years ended December 31, 1992 and 1991, respectively. (3) Oil and gas are converted to a common unit of measure ("equivalent barrel" or "equivalent MCF") on the basis of six MCF of gas to one barrel of oil. (4) The components of production costs may vary substantially among wells, depending on the methods of recovery employed and other factors, but generally include production taxes, administrative overhead, workovers, maintenance and repair, labor and utilities.
UNDEVELOPED ACREAGE
At December 31, 1993, the Company owned 864,500 gross (351,400 net) undeveloped acres, all of which are located in the continental United States. The table below sets forth the states in which such acreage is located and the number of gross and net acres in each.
(1) This acreage is subject to a joint drilling participation agreement as discussed in Note 13 to the Company's Consolidated Financial Statements contained in Item 8 of this Report.
DRILLING ACTIVITY
During the periods indicated, the Company drilled or participated in the drilling of the following exploratory and development wells:
The above well information excludes wells in which the Company has only an overriding royalty interest.
At December 31, 1993, the Company was participating in the drilling or completion of 14 gross (5.15 net) wells.
OFFICE LEASES
The Company has entered into certain leases for office space in Denver and New York City.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company is a party, or to which any of its properties are subject.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.
The Company's common stock is listed for trading on the American Stock Exchange and The International Stock Exchange, London. The following table sets forth the high and low sales prices of the Company's common stock on the American Stock Exchange:
At February 8, 1994, the Company estimates that there were approximately 1,050 record holders of Class A Common Stock and 520 record holders of Class B Common Stock.
The last reported sales prices of the Company's Class A Common Stock and Class B Common Stock on the American Stock Exchange on February 8, 1994 were $2.00 and $2.25 per share, respectively.
From July 1987 through December 1992, the Company paid a quarterly cash dividend of $.025 per share on all outstanding shares of Class A Common Stock, and has never paid dividends on Class B Common Stock. In January 1993 the Company announced the elimination of Class A Common Stock dividends. The Company's ability to pay dividends is currently subject to the provisions of various covenants contained in the Company's revolving credit facility and certain indentures relating to its public debt.
In addition to the factors discussed above, the determination of the amount of any future cash dividends to be declared and paid on Class A Common Stock will depend upon, among other things, the Company's financial condition, its cash flow from operating activities, the level of the Company's capital and exploration expenditures and its future business prospects.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA.
The following selected financial data indicates certain trends in the Company's financial condition and results of operations. For a more complete presentation of such trends and a discussion of items which affect the comparability of the information reflected below, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in Item 7

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the Company's Consolidated Financial Statements and the Notes thereto contained in Item 8


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
INDEPENDENT AUDITORS' REPORT
Presidio Oil Company:
We have audited the accompanying consolidated balance sheets of Presidio Oil Company and its subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1993. Our audits also included the financial statement schedules listed in the List of Documents Filed at Item 14. These financial statements and the financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedules 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.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Presidio Oil Company and subsidiaries at December 31, 1993 and 1992 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1993 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.
As discussed in Note 8 to the consolidated financial statements, the Company changed its method of accounting for its employee stock ownership plan effective January 1, 1993.
DELOITTE & TOUCHE Denver, Colorado
February 15, 1994
PRESIDIO OIL COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ASSETS
See notes to consolidated financial statements.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Consolidated Balance Sheets LIABILITIES AND STOCKHOLDERS' EQUITY
See notes to consolidated financial statements.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Consolidated Statements of Operations
See notes to consolidated financial statements.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity
See notes to consolidated financial statements.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows
See notes to consolidated financial statements.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (Continued)
See notes to consolidated financial statements.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Years Ended December 31, 1993, 1992 and 1991
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying Consolidated Financial Statements present the financial position of Presidio Oil Company and its wholly-owned subsidiaries (the "Company" or "Presidio").
Certain accounts for the years ended December 31, 1992 and 1991 have been reclassified to conform to the classifications for the year ended December 31, 1993.
The Company's Senior Subordinated Gas Indexed Notes, Senior Gas Indexed Notes and Senior Secured Notes (collectively the "Notes") are guaranteed by all significant subsidiaries of the Company (the "Guarantors"). Separate financial statements of the Guarantors are not included herein because the Guarantors have fully, unconditionally, jointly and severally guaranteed the Company's obligations with respect to the Notes and the Company (which is primarily a holding company and whose operating income is generated by its subsidiaries) has no separate operations of its own. The operations, assets, liabilities and equity of the subsidiaries of the Company that are not Guarantors are inconsequential.
Property, Plant and Equipment and Depletion, Depreciation and Amortization
The Company follows the full cost method of accounting for oil and gas producing activities whereby all costs incurred in the acquisition, exploration and development of oil and gas properties are capitalized. Sales of oil and gas properties are recorded as an adjustment of capitalized costs, with no gain or loss recognized. Capitalized costs are subject to a ceiling limitation test based on a computed value of the Company's present value of estimated future net revenues from proved reserves using current prices (with consideration of price changes only to the extent provided by contractual arrangements), discounted at 10%, after adjusting for tax effects at the end of each period. Due to the low oil and gas prices being received at certain times during 1992 and 1991, the Company was required to reduce the carrying value of its oil and gas properties by $15,000,000 and $68,000,000, respectively, in such years.
The provision for depletion, depreciation and amortization of oil and gas properties is calculated by multiplying current period oil and gas production by a rate which is determined by dividing capitalized oil and gas costs (except for costs of certain unevaluated acreage discussed below) plus estimated future development costs, by the quantities of estimated proved oil and gas reserves. The Company excludes investments in unevaluated acreage from costs to be amortized pending determination as to the existence of proved reserves on such acreage. The Company's unevaluated acreage is subject to a periodic review for impairment and, if necessary, the amount of impairment is included in the costs to be amortized. The Company capitalizes interest on unevaluated properties not subject to amortization. The Company capitalized interest of $1,278,000, $2,639,000, and $4,882,000 (out of total interest costs, including amounts associated with discontinued operations, of $26,312,000, $33,880,000 and $37,864,000) for the years ended December 31, 1993, 1992 and 1991, respectively.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
Income Taxes
The Company files a consolidated income tax return and provides deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company's consolidated financial statements or tax returns (see Note 5).
Loss Per Common Share
Loss per common share is computed as follows:
(1) As of January 1, 1993 the Company adopted a new method of accounting for its Employee Stock Ownership Plan ("ESOP") which requires unallocated shares held by the ESOP to be excluded from outstanding shares for purposes of calculating loss per share. The N/A for the years ended December 31, 1992 and 1991 indicates that such new accounting method does not apply to such years and, therefore, the weighted average number of unallocated shares held by the ESOP for the years ended December 31, 1992 and 1991 of 1,324,000 and 1,032,000, respectively, were reflected as outstanding for purposes of calculating loss per common share.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
Deferred Charges
The Company records the fees and expenses associated with its bank and public debt as deferred charges and amortizes such costs to interest expense over the life of the debt using the effective interest method. Debt repayment expense reflects the accelerated amortization of certain of such costs during the years ended December 31, 1993 and 1992.
Consolidated Statements of Cash Flows
The Company considers investments purchased with an original maturity of three months or less to be cash equivalents. Included in the Consolidated Statements of Cash Flows is $23,945,000, $29,365,000 and $28,901,000 of interest paid, including amounts paid associated with discontinued operations, net of amounts capitalized, during the years ended December 31, 1993, 1992 and 1991, respectively. During the year ended December 31, 1993, $99,770,000 of Senior Subordinated Gas Indexed Notes were exchanged for an equivalent amount of Senior Gas Indexed Notes (see Note 3); and, insofar as such exchange was a non-cash transaction, it was not reflected in the Consolidated Statements of Cash Flows.
Gas Balancing Arrangements
The Company uses the entitlement method of recording gas revenues. Under such method, sales are recorded based upon the Company's proportionate share of gas sold. The Company then records a receivable (payable) to the extent it sells less (more) than its proportionate share of the revenues. At December 31, 1993 and 1992, the Company had net gas balancing liabilities of $3,930,000 associated with approximately 2.1 billion cubic feet ("BCF") of gas and $4,170,000 associated with 2 BCF of gas, respectively.
2. BANK DEBT
At December 31, 1993, the Company had bank debt of $15,000,000 outstanding under a $25 million revolving credit facility (the "Revolving Credit Facility"). The Company had $73,000,000 outstanding under an $80 million bank credit agreement at December 31, 1992. The substantial decrease in the Company's bank debt balance at December 31, 1993 as compared to December 31, 1992 is primarily due to repayments resulting from the sale of the Company's Senior Secured Notes as discussed in Note 3.
Borrowings under the Revolving Credit Facility are secured by mortgages on certain of the Company's oil and gas properties (the "Mortgaged Properties") and bear interest at either prime plus 1% or LIBOR plus 2 1/2%. Borrowings under the Revolving Credit Facility of up to $20 million may be utilized for developmental drilling and certain other operations related to the Company's proved hydrocarbon reserves and borrowings of up to $15 million may be used for seasonal working capital purposes. The Revolving Credit Facility requires (i) regular quarterly commitment reductions of approximately $1.56 million beginning on October 1, 1995 through July 1, 1999, (ii) additional commitment reductions equal to 100% of the proceeds realized from the sale of Mortgaged Properties, (iii) 75% of the proceeds realized from the sale of certain other assets to be utilized to develop hydrocarbon reserves, (iv) capital expenditures of not less than $5 million per annum during the three-year period ending October 1, 1996 in respect of the development of the Mortgaged Properties, and (v) the Company's ratio of bank debt to total capitalization (excluding the effect of any reduction in the carrying amount of oil and gas properties) to be no greater than .15 on the last day of each quarter, and its
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
ratio of each quarter's operating cash flow plus the net proceeds of asset sales to cash dividends, cash interest and scheduled debt payments due within the following quarter to be greater than 1.
At December 31, 1993, the estimated minimum principal repayments associated with the Revolving Credit Facility were $0, $10,000,000 $0, $0 and $313,000 in each of the years 1994 through 1998. However, subsequent to December 31, 1993 the Company fully prepaid the indebtedness outstanding under the Revolving Credit Facility with a portion of the proceeds from the sale of certain oil and gas properties as discussed in Note 14, and thus no repayments are due under the Revolving Credit Facility.
3. GAS INDEXED NOTES; SENIOR SECURED NOTES
On August 6, 1993, the Company completed various transactions (the "Private Exchange") with certain holders (and their affiliates) (the "Holders") of the Company's Senior Subordinated Gas Indexed Notes Due 1999 (the "Old Notes"), pursuant to which a total of $75 million aggregate principal amount of the Old Notes was exchanged for an equivalent principal amount of the Company's newly-issued Senior Gas Indexed Notes Due 2002 (the "New Notes") and the Holders purchased $56.25 million aggregate principal amount of the Company's 11.5% Senior Secured Notes Due 2000 (the "Senior Secured Notes"). The net proceeds of the sale of the Senior Secured Notes were used to prepay $55 million of bank debt.
On November 30, 1993, the Company completed a public exchange offer (the "Exchange Offer") pursuant to which (i) $24.77 million of the $25 million of the Old Notes remaining after the Private Exchange were exchanged for an equivalent principal amount of the New Notes and (ii) $18.75 million of Senior Secured Notes were sold with the proceeds of such sale being used to prepay bank debt.
The terms of the New Notes are generally the same as those of the Old Notes, except that the New Notes: (i) rank pari passu with other senior debt of the Company (including bank debt and the Senior Secured Notes, as discussed below, which are also secured by mortgages on certain of the Company's oil and gas properties which provide preferential claims to such properties) and rank senior to the Old Notes; (ii) mature in 2002 and have no sinking fund requirements; (iii) have a 15% maximum interest rate above which the 13.25% base interest rate may not be increased as a result of the gas indexing feature as discussed below (which is the same as that in the Old Notes), instead of the 18% maximum contained in the Old Notes; and (iv) are redeemable, at the option of the Company, at the prices (expressed as a percentage of principal amount) and during the indicated years beginning August 15: 1996 - 106%; 1997 - 103%; and 1998 - 100%. Both the Old Notes and New Notes bear interest at a base rate of 13.25% per annum. Concurrently with each quarterly interest payment the Company will pay to the holders additional interest, if any, based upon the amount by which the average gas spot price ("Average Spot Price") based upon spot gas prices published by Natural Gas Clearinghouse, Inc., exceeds $1.75 per million British Thermal Units (MMBTU) during a twelve-month period preceding such quarterly interest payment period up to a maximum overall interest rate of 15% per annum for the New Notes and 18% for the Old Notes. At December 31, 1993, the twelve-month Average Spot Price was $2.02 per MMBTU resulting in an interest rate of 13.925% per annum for the period February 16, 1994 to May 15, 1994.
The Senior Secured Notes: (i) rank pari passu with other senior debt of the Company (including bank debt and the New Notes) and rank senior to the Old Notes and the Company's Convertible Subordinated Debentures; (ii) are secured by a mortgage on certain of the Company's oil and gas properties, with the amount and type of such properties being subject to adjustment, based upon the value of the properties and
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
certain other factors; and (iii) are redeemable, at the option of the Company, at the prices (expressed as a percentage of principal amount) and during the indicated years beginning September 15: 1996 - 103%; 1997 -102%; 1998 - 101%; and 1999 - 100%.
4. CONVERTIBLE SUBORDINATED DEBENTURES
In February 1990 the Company issued $50,000,000 in aggregate principal amount of its 9% Convertible Subordinated Debentures Due 2015 (the "Convertible Subordinated Debentures"). The Convertible Subordinated Debentures are currently convertible at any time prior to redemption or maturity into Class A Common Stock, at a conversion price per share of $9.38, subject to adjustment. The Convertible Subordinated Debentures will be redeemable through the operation of a mandatory sinking fund pursuant to which on March 15 in each of the years 2000 to 2014 (the "Redemption Period") 5% of the outstanding principal amount of the Convertible Subordinated Debentures will be redeemed at 100% of the principal amount thereof plus accrued interest. At its option, the Company may make additional sinking fund payments in amounts sufficient to redeem annually up to an additional 10% of the outstanding principal amount of the Convertible Subordinated Debentures. The Convertible Subordinated Debentures are redeemable, otherwise than through the mandatory sinking fund, at the Company's option, at 107% of their principal amount plus accrued interest through March 15, 1994 and thereafter reducing by 1% each year to 100% of their principal amount plus accrued interest at March 15, 2000 and thereafter.
5. INCOME TAXES
The Company adopted Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" ("SFAS 109") effective as of January 1, 1991. SFAS 109 represents a new method of accounting for income taxes, and it generally requires that deferred taxes be calculated using an asset and liability approach at currently enacted income tax rates. The adoption of SFAS 109 had no cumulative effect on the date of adoption or effect on net income for the year ended December 31, 1991. The Company recorded no benefit from income taxes during the years ended December 31, 1993, 1992 and 1991, because a valuation allowance was provided for the deferred assets otherwise recorded.
Actual tax expense (benefit) differs from the statutory rate as shown below:
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
The components of the Company's tax assets and liabilities under SFAS 109 are shown below:
At December 31, 1993 the Company had net operating loss carryforwards for income tax purposes of approximately $225,136,000 expiring 1994 through 2008 if not previously utilized. The Company's net operating losses are subject to various restrictions that could significantly limit their utilization. The Company has investment tax credit carryforwards of approximately $583,000 expiring 1994 through 2000 if not previously utilized. The Company also has statutory depletion carryforwards of approximately $9,596,000 which may be carried forward until utilized.
6. COMMON STOCK
The Company has two classes of common stock, Class A Common Stock and Class B Common Stock. Each share of Class B Common Stock is convertible into one share of Class A Common Stock. Both classes of common stock are $.10 par value per share. There are 80,000,000 authorized shares of Class A Common Stock and 20,000,000 authorized shares of Class B Common Stock.
From July 1987 through December 1992, the Company paid a quarterly cash dividend of $.025 on its Class A Common Stock. In January 1993 the Company announced the elimination of Class A Common Stock dividends. If cash dividends are paid on Class B Common Stock, a cash dividend must also be paid on Class A Common Stock in an amount equal to 110% of the per share amount of the cash dividend paid on Class B Common Stock. The Company's ability to pay dividends is subject to the provisions of certain covenants contained in the Revolving Credit Facility and the indentures relating to the New Notes and the Old Notes. Holders of Class A Common Stock are entitled to one-twentieth of one vote per share and holders of Class B Common Stock are entitled to one vote per share.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
The Class B Common Stock is subject to certain restrictions on transfer designed to prevent the sale of "control blocks" of Class B Common Stock at a premium price not available to all holders of Class A Common Stock and Class B Common Stock. No transfer of Class B Common Stock may be made (i) if the transferee thereof would, as a result of such transfer, have acquired from such transferor, within the last twelve months, in excess of 15% of the total voting power of all outstanding shares of the Class A Common Stock and the Class B Common Stock, (a "Control Block"), and (ii) if any of the shares held by the transferee comprising the Control Block were acquired by such transferee within twelve months of the proposed transfer at a price in excess of the market price when acquired; unless such transferee, concurrently with the proposed transfer, offers to purchase all of the outstanding shares of both the Class A Common Stock and the Class B Common Stock at a price not less than the highest price per share paid, within twelve months of the proposed transfers by such transferee, to the transferor with respect to any of the shares comprising the Control Block. Presidio can refuse to recognize any transfer of shares made in violation of this limitation, including for purposes of voting and dividend rights, and to require the sale of any such shares. Except for this limitation, shares of both the Class A Common Stock and the Class B Common Stock are freely transferable.
In the fiscal year ended June 30, 1986, George P. Giard, Jr., Chairman of the Board and Chief Executive Officer of the Company, purchased for $90,000 a warrant to acquire 120,000 shares of the Company's common stock at an exercise price of $4.00 per share which was the market value of the common stock on the date of purchase. Such warrant, which expires in 1997, has been subsequently adjusted for a 10% stock dividend and during 1993 was amended and restated such that the warrant now provides for the acquisition of 94,091 shares of Class B Common Stock and 9,409 shares of Class A Common Stock at a price of $3.64 per share and 16,206 shares of Class B Common Stock and 1,621 shares of Class A Common Stock at $2.50 per share.
During the six month period ended December 31, 1987, George P. Giard, Jr., and Robert L. Smith, President and Chief Operating Officer of the Company, purchased warrants from the Company for $75,000 and $40,000, respectively. These warrants, which expire in 1997, were to acquire 75,000 shares and 40,000 shares of the Company's Class B Common Stock at an exercise price of $4.625 per share, which equalled or exceeded the market value of such stock on the date of purchase. During 1993 Mr. Giard's and Mr. Smith's warrants were amended and restated and now provide for Mr. Giard to acquire 46,912 shares of Class B Common Stock at $2.50 per share and Mr. Smith to acquire 20,000 shares of Class B Common Stock at $4.625 per share and 10,811 shares of Class B Common Stock at $2.50 per share.
During 1993 Christopher S. Hardesty, Treasurer and Chief Financial Officer of the Company, purchased for $2,000 a warrant to acquire 15,000 shares of the Company's Class A Common Stock at an exercise price of $1.0625 per share, which equalled or exceeded the market value of such stock on the date of purchase. This warrant expires ten years after the date of purchase.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
The Company also has issued warrants to acquire: (i) 150,000 shares of Class A Common Stock at $7.125 per share which expire in 1999; (ii) 10,000 shares of Class A Common Stock at $7.00 per share which expire in 1995; (iii) 10,000 shares of Class A Common Stock at $10.00 per share which expire in 1995; and (iv) 50,000 shares of Class B Common Stock at $4.625 per share which expire in 1997.
During 1991 the Company purchased (and returned to authorized but unissued shares) 1,733,000 shares of its Class A Common Stock for $8,125,000. The Company also returned to authorized but unissued shares the balance of its treasury stock.
7. RELATED PARTY TRANSACTIONS
In connection with the sale of Mountain Gas Resources ("MGRI") (see Note 12), George P. Giard, Jr. and Robert L. Smith entered into consulting agreements with MGRI which provided for Mr. Giard and Mr. Smith to provide consulting services to MGRI for a minimum period of two years; and, in respect of such consulting services, they each received options to purchase 6,000 shares of Class A Common Stock of MGRI at an exercise price of $60.00 per share. In July 1993 Mr. Giard and Mr. Smith each received proceeds of $281,000 as a result of the sale of such options in connection with the MGRI Equity Sale.
See Note 6 for information as to the purchase of warrants from the Company by certain of the Company's officers.
8. BENEFIT PLANS
On May 17, 1990 the Company's stockholders amended the 1985 Incentive and Non-Qualified Stock Option and Stock Appreciation Rights Plan. Under such amended plan, options to purchase up to 6,000,000 shares of the Company's Class A Common Stock or Class B Common Stock may be granted to key employees at an exercise price not less than the market price of the stock at the date of grant. The amended plan also allows for the issuance of stock appreciation rights in conjunction with the issuance of options to key employees and provides for granting of non-qualified stock options or incentive stock options. The Compensation Committee of the Board of Directors determines the number of options and exercise prices under which stock options or stock appreciation rights are issued. At December 31, 1993, no stock appreciation rights had been granted. The stock options either: (i) vest incrementally over four years; or (ii) vest after one year but are not exercisable until the closing price of the Company's Class B Common Stock has been $6.00 per share or greater for sixty consecutive trading days.
The Company's stockholders approved Non-Employee Director Stock Option Plans which granted options to purchase up to 294,900 shares of the Company's Class B Common Stock to non-employee directors. Stock options granted under these plans: (i) vest incrementally over four years; or (ii) vest after one year but are not exercisable until the closing price of the Company's stock has been $6.00 per share or greater for sixty consecutive trading days. These options were granted at an exercise price of not less than the market price of the stock on the date of grant and expire after ten years.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
At December 31, 1993 and 1992 options to purchase shares of common stock were as follows:
(1) No options have been exercised under either the Employee Stock Option Plan or the Non-Employee Director Stock Option Plans during the years ended December 31, 1993, 1992 and 1991. (2) Of which at December 31, 1993 and 1992 options to purchase 287,000 shares and 310,000 shares, respectively, of Class B Common Stock are not exercisable until the Company's Class B Common Stock has been $6.00 per share or greater for sixty consecutive trading days. (3) Of which at December 31, 1993 and 1992 options to purchase 90,000 shares of Class B Common Stock are not exercisable until the Company's Class B Common Stock has been $6.00 per share or greater for sixty consecutive trading days.
The Company has an Employee Stock Ownership Plan ("ESOP") which allows the Company to make contributions as determined each year by the Compensation Committee of the Company's Board of Directors. The ESOP is leveraged with loans provided by the Company. Shares are allocated to participants based on the principal payments made each year in respect of such loans by the ESOP. All full-time employees are eligible to participate in the ESOP after one year of service. The amounts charged to general and administrative expense in connection with the ESOP for the years ended December 31, 1992 and 1991 were based upon the historical cost paid by the ESOP for the shares contributed to the participant accounts during such years. Effective January 1, 1993 the Company adopted a new method of accounting for the ESOP which requires the amounts charged to expense (which is associated with the shares contributed each year to the participants accounts) to be based on the market price of the Company's Common Stock, with the difference between the historical cost paid by the ESOP for such shares and the average market price of the Company's Common Stock, to be charged to additional paid-in capital. In addition, George P. Giard, Jr. and Robert L. Smith receive retirement benefits from the Company under a supplemental employee retirement plan ("SERP") in excess of the contributions which may be made on their behalf by the Company to the ESOP. The total amounts charged to general and administrative expense in connection with the ESOP and the SERP for the years ended December 31, 1993, 1992 and 1991, were $438,000, $1,056,000 and $1,339,000, respectively.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
At December 31, 1993 the ESOP held the following shares of Common Stock:
The fair market value of the unallocated shares of Common Stock held for future contributions totaled $3.3 million at December 31, 1993.
9. COMMITMENTS AND CONTINGENCIES
The Company has lease commitments for various office facilities and computer equipment. Future minimum annual rental payments required under such leases for the years ending December 31, 1994 through 1998 and thereafter will be $1,387,000, $1,020,000, $752,000, $667,000, $535,000 and $134,000, respectively. Such annual rental payments for the years ended December 31, 1993, 1992 and 1991 totaled $1,025,000, $1,291,000 and $2,459,000, respectively.
See Note 13 concerning the letter of credit that the Company entered into in connection with the sale of its West Virginia proved developed reserves and associated gathering systems.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
10. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107 requires disclosure in respect of the fair value of various financial instruments owned or issued by the Company. The estimated fair values of such financial instruments are as follows:
The following methods and assumptions were used to estimate the fair value for each class of financial instruments:
(1) The fair value is an estimate and does not necessarily represent the amount that would be paid in an actual sale. (2) The carrying amount approximates fair value because of the short maturity of those instruments. (3) The carrying amount approximates fair value because such debt is secured by a portion of the Company's oil and gas assets and bears interest at the prime rate plus 1% which approximates current market conditions. (4) The fair value was estimated based on quoted market prices. (5) The fair value was estimated based on the fees to be incurred in connection with the letters of credit since, under present circumstances, no amounts will be required to be drawn against such letters of credit.
11. MAJOR PURCHASERS
Sales to two purchasers of $11,541,000 and $9,078,000 accounted for 24% and 19%, respectively, of the Company's oil and gas revenues during the year ended December 31, 1993. Sales to two purchasers of $12,423,000 and $9,088,000 accounted for 19% and 14%, respectively, of the Company's oil and gas revenues during the year ended December 31, 1992. Sales to two purchasers of $10,665,000 and $10,613,000 each accounted for 11% of the Company's oil and gas revenues during the year ended December 31, 1991. A discontinuance of oil and gas sales to these two purchasers would not have a material impact on the Company's operations because the Company believes that a number of other companies are available to purchase its oil and gas production.
12. DISCONTINUED OPERATIONS
In July 1992 the Company completed a transaction with MS Gas Resources, Inc., a newly-formed subsidiary of The Morgan Stanley Leveraged Equity Fund II, L.P. (the "Morgan Stanley Fund"), pursuant to which the Company's wholly-owned subsidiary, Mountain Gas Resources, Inc., was merged into MS Gas Resources (the "MGRI Divestiture") whose name was then changed to Mountain Gas Resources, Inc. ("MGRI"). Prior to the MGRI Divestiture, Mountain Gas Resources owned and operated all of the Company's natural gas gathering and processing facilities in the Green River Basin in southwestern Wyoming and marketed natural gas and natural gas liquids. The cash consideration received in the MGRI Divestiture was $80.7 million; and, as adjusted for working capital, capital expenditures and other items, resulted in net cash proceeds of $77.5 million which was used to prepay an equivalent amount of bank debt. Also, in connection with the MGRI Divestiture, the Company received an equity interest in MGRI. Such interest provided the Company with the
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
right to share in any profits realized upon a subsequent sale of MGRI prior to December 31, 1996. In July 1993 the Company received $11.6 million from the sale (the "MGRI Equity Sale") of such equity interest in MGRI. The proceeds of the MGRI Equity Sale were used to prepay an equivalent amount of the Company's bank debt.
The MGRI Divestiture and the MGRI Equity Sale have been recorded as a sale of a segment of the Company's business. Accordingly, the gas gathering, processing and marketing operations of Mountain Gas Resources prior to the MGRI Divestiture (which includes interest expense of $3,376,000 and $7,338,000 for the years ended December 31, 1992 and 1991, respectively, that was associated with the $77.5 million of bank debt that was repaid with the net cash proceeds of the MGRI Divestiture), as well as the gain on the sale of MGRI Divestiture and the MGRI Equity Sale have been reflected in the Company's Consolidated Statements of Operations as discontinued operations. Such discontinued operations had revenues of $38,301,000 and $58,381,000 for the years ended December 31, 1992 and 1991, respectively (including $941,000 and $2,510,000 of intercompany sales).
13. WEST VIRGINIA PROPERTY SALE
In December 1992 the Company completed the sale of the common stock of its wholly-owned subsidiaries, Peake Energy, Inc. and Peake Operating Company (the "Subsidiaries"), to Belden & Blake Acquisition, Inc. ("Belden & Blake"). The proceeds of the transaction totaled $35 million; and, after adjustments for capital expenditures, net operating cash flow and other items, the net cash proceeds were $32.6 million, which were utilized to repay bank and other indebtedness of the Company. The Subsidiaries held assets which included approximately 43 BCF of proved developed gas reserves and associated gathering systems, as well as 50,000 barrels of oil reserves located in West Virginia.
The Company retained approximately 28 BCF of proved undeveloped gas reserves and over 90,000 net undeveloped acres in West Virginia subsequent to the sale, and such reserves and acreage will be developed by the Company and Belden & Blake in accordance with a joint drilling participation agreement. This agreement gives Belden & Blake the option to participate, to the extent of 50% of the Company's interest (or more by mutual consent), in the development of such reserves and acreage. The consideration for Belden & Blake's participation in each well drilled pursuant to the joint drilling participation agreement is (i) payment of its share of drilling and completion costs, (ii) payment to the Company of an additional $90 per net acre for its share of the drillsite acreage allocated to each such well and (iii) payment to the Company of an overriding royalty of 3.125% (proportionately reduced) in accordance with its net interest in the revenues attributable to each such well. The Company believes that virtually all of its proved undeveloped gas reserves and unproved undeveloped acreage will be fully developed prior to the termination of the joint drilling participation agreement in 2008; however, the agreement provides that 50% of any such reserves and/or acreage that might be retained by the Company as of such termination date would be conveyed to Belden & Blake for no additional consideration.
A portion of the gas reserves sold to Belden & Blake is subject to a long-term gas contract providing for prices above the current spot market price for West Virginia gas. In connection with the sale, the Company guaranteed certain minimum levels of performance, on an annual basis, by the gas purchaser under this contract such that should performance under this contract be less than the levels guaranteed by the Company, Belden & Blake can draw on a letter of credit entered into by the Company. During the years ending April 1, 1994 through 1999, respectively, the following amounts can be drawn by Belden & Blake on such letter of credit: $1,942,000, $1,877,000, $1,790,000, $1,735,000, $1,692,000 and $1,656,000.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
14. EVENTS SUBSEQUENT TO DECEMBER 31, 1993
In January 1994 the Company realized $22 million as a result of certain oil and gas property sales, including $7 million from its ongoing program to sell miscellaneous small, non-operated oil and gas properties, as well as $15 million from the sale of a 50% interest in a partly- developed gas field in Louisiana. Approximately $5 million of the net cash proceeds from these sales was utilized to prepay all of the outstanding indebtedness under the Revolving Credit Facility and the remaining $17 million was added to the Company's working capital and will be utilized to fund a portion of the Company's 1994 capital expenditure program.
15. OIL AND GAS COST AND RESERVE INFORMATION
Capitalized Costs Related to Oil and Gas Producing Activities
The Company's oil and gas operations are conducted entirely in the United States. Aggregate capitalized costs relating to such operations and related accumulated depletion, depreciation and amortization are as follows:
Results of Operations for Oil and Gas Producing Activities
(1) Includes $10,248,000 of revenues associated with the Company's oil hedging arrangements.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
Costs Incurred in Oil and Gas Producing Activities
Costs incurred in oil and gas operations and related depletion, depreciation and amortization per equivalent barrel are as follows:
Estimated Quantities of Proved Oil and Gas Reserves (Unaudited)
Reserve information presented below is based upon reports reviewed by the Company's independent petroleum engineering firms. Reserve estimates are inherently imprecise and estimates of new discoveries are more imprecise than those of producing oil and gas properties. Accordingly, these estimates are expected to change as future information becomes available.
Proved oil and gas reserves are the estimated quantities of oil, gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed oil and gas reserves are those expected to be recovered through existing wells with existing equipment and operating methods.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
Net quantities of proved reserves and proved developed reserves of oil (including condensate and natural gas liquids) and gas for the Company as of the beginning and the end of the years ended December 31, 1993, 1992 and 1991, as well as the changes in proved reserves during such periods, are set forth in the tables below.
(1) Includes proved undeveloped gas reserves at December 31, 1993 and 1992 of 27.5 BCF and 28.1 BCF, respectively, which are subject to a joint drilling participation agreement as discussed in Note 13. (2) Includes proved reserves sold subsequent to December 31, 1993 of 26.3 BCF of gas and 1.4 MMBbls of oil, of which 11.4 BCF of gas and 1 MMBbls of oil were proved developed reserves.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves (Unaudited)
Future net cash flows presented below are computed using period-end prices and costs with consideration of price changes only to the extent provided by contractual arrangements. Future income tax expenses are estimated after consideration of statutory tax rates, permanent differences and tax credits. Future general and administrative expenses and interest expense have not been considered.
(1) Includes proved undeveloped gas reserves at December 31, 1993 and 1992 with a present value of future net revenues discounted at 10% of $3,260,000 and $10,857,000, respectively, which are subject to a joint drilling participation agreement as discussed in Note 13. (2) Includes proved reserves sold subsequent to December 31, 1993 having future net revenues before income taxes, discounted at 10% per annum, of $36.1 million.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
Standardized Measure of Discounted Future Net Cash Flows, After Tax (Unaudited)
The following are the principal sources of change in the standardized measure of discounted future net cash flows, after tax, excluding oil and gas properties held for resale:
PRESIDIO OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued)
16. SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(1) Due to low oil and gas prices which were being received during these periods, the Company was required to reduce the carrying value of its oil and gas properties (see Note 1). (2) Includes a $7.8 million gain on the divestiture of the Company's discontinued gas gathering, processing and marketing operations (see Note 12). (3) Includes a $11.6 million gain on the sale of the Company's remaining equity interest in its discontinued gas gathering, processing and marketing operations (see Note 12). (4) Per share amounts have been restated for the first three quarters of 1993 due to a change of accounting method adopted by the Company during the fourth quarter of 1993 (see Notes 1 and 8).
PRESIDIO OIL COMPANY AND SUBSIDIARIES Schedule V - Property, Plant and Equipment For the Years Ended December 31, 1993, 1992 and 1991
(1) $20.4 million relates to the sale of the Company's proved developed gas reserves in West Virginia as discussed in Note 13. (2) Relates to the divestiture of the Company's discontinued gas gathering, processing and marketing operations as discussed in Note 12 and its gathering systems in West Virginia as discussed in Note 13.
PRESIDIO OIL COMPANY AND SUBSIDIARIES Schedule VI - Accumulated Depletion, Depreciation and Amortization of Property, Plant and Equipment For the Years Ended December 31, 1993, 1992 and 1991
(1) Relates to the divestiture of the Company's discontinued gas gathering, processing and marketing operations as discussed in Note 12 and its gathering systems in West Virginia as discussed in Note 13.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Incorporated herein by reference to "Election of Directors", "Other Executive Officers" and "Compliance with Section 16(a)" included in the Proxy Statement for the Company's Annual Meeting of Stockholders to be held on or about June 14, 1994.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION.
Incorporated herein by reference to "Executive Compensation and Other Information" and "Compensation of Directors" included in the Proxy Statement for the Company's Annual Meeting of Stockholders to be held on or about June 14, 1994.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Incorporated herein by reference to "Security Ownership of Certain Beneficial Owners and Management" included in the Proxy Statement for the Company's Annual Meeting of Stockholders to be held on or about June 14, 1994.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Incorporated herein by reference to "Certain Transactions and Relationships" included in the Proxy Statement for the Company's Annual Meeting of Stockholders to be held on or about June 14, 1994.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) LIST OF DOCUMENTS FILED
(1) Financial Statements: Independent Auditors' Report Consolidated Balance Sheets as of December 31, 1993 and Consolidated Statements of Operations for the Years Ended December 31, 1993, 1992 and 1991 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1993, 1992 and 1991 Consolidated Statements of Cash Flows for the Years Ended December 31, 1993, 1992 and 1991 Notes to Consolidated Financial Statements
(2) Financial Statement Schedules: V - Property, Plant and Equipment for the Years Ended December 31, 1993, 1992 and 1991 VI - Accumulated Depletion, Depreciation and Amortiza- tion of Property, Plant and Equipment for the Years Ended December 31, 1993, 1992 and 1991
(3) Exhibits:
3.1 Restated Certificate of Incorporation of the Company as filed on March 17, 1987 with the Secretary of State of the State of Delaware, as amended by the Certificate of Amendment filed on December 15, 1987 and the Second Certificate of Amendment filed on June 8, 1990 with the Secretary of State of the State of Delaware. (Incorporated herein by reference to Exhibit 4.1 to Presidio's Registration Statement on Form S-3, Registration No. 33-37747.)
3.2 The Company's Bylaws, as amended to February 27, 1991. (Incorporated herein by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1990.)
4.1 Third Amendment and Restatement of Credit Agreement dated as of May 29, 1992 among the Company, Presidio Exploration, Inc., a Colorado corporation and wholly-owned subsidiary of the Company ("Exploration"), certain other wholly-owned subsidiaries of the Company and each bank which is a signatory thereto, and The Chase Manhattan Bank (National Association) ("Chase") (the "1987 Credit Agreement"). (Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated June 10, 1992.)
4.2 Amendment No. 1, dated as of July 16, 1992 relating to the 1987 Credit Agreement. (Incorporated herein by reference to Exhibit 2.2 to the Company's Current Report on Form 8-K dated July 16, 1992.)
4.3 Amendment No. 2, dated as of August 13, 1992 relating to the 1987 Credit Agreement. (Incorporated herein by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 1992.)
4.4 Amendment No. 3, dated as of October 6, 1992 relating to the 1987 Credit Agreement. (Incorporated herein by reference to Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 1992.)
4.5 Amendment No. 4, dated as of December 22, 1992 relating to the 1987 Credit Agreement. (Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated December 22, 1992.)
4.6 Amendment and Restatement of Amendment, Restatement and Consolidation of Credit Agreement dated as of August 6, 1993 among the Company, Exploration, each bank which is a signatory thereto and Chase, as agent (the "Amended Exploration Credit Agreement"). (Incorporated herein by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 1993.)
* 4.7 Amendment No. 1, dated as of December 28, 1993 relating to the Amended Exploration Credit Agreement.
4.8 Amendment, Restatement and Consolidation of Credit Agreement dated as of August 17, 1990 among the Company, Exploration, each bank which is a signatory thereto and Chase (the "Exploration Credit Agreement"). (Incorporated herein by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 1990.)
4.9 Amendment No. 1, dated as of November 22, 1992 relating to the Exploration Credit Agreement. (Incorporated herein by reference to Exhibit 4.10 to the Company's Annual Report on Form 10-K for the year ended December 31, 1991.)
4.10 Amendment No. 2, dated as of May 29, 1992 relating to the Exploration Credit Agreement. (Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated June 10, 1992.)
4.11 Amendment No. 3, dated as of July 16, 1992 relating to the Exploration Credit Agreement. (Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated July 16, 1992).
4.12 Amendment No. 4, dated as of August 13, 1992 relating to the Exploration Credit Agreement. (Incorporated herein by reference to Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 1992.)
4.13 Amendment No. 5, dated as of October 6, 1992 relating to the Exploration Credit Agreement. (Incorporated herein by reference to Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 1992.)
4.14 Amendment No. 6, dated as of November 19, 1992 relating to the Exploration Credit Agreement. (Incorporated herein by reference to Exhibit 4.5 to the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 1992.)
4.15 Amendment No. 7, dated as of December 22, 1992 relating to the Exploration Credit Agreement. (Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated December 22, 1992.)
4.16 Second Amended and Restated Pledge Agreement dated as of December 22, 1992, among the Company, Exploration and Chase, as agent for certain banks, and Chase as collateral agent for such banks. (Incorporated herein by reference to Exhibit 4.14 to the Company's Annual Report on Form 10-K for the year ended December 31, 1992.)
4.17 Guaranty dated as of December 1, 1989, from the Company to each of the financial institutions party to the Exploration Credit Agreement. (Incorporated herein by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K for the year ended December 31, 1989.)
4.18 Indenture dated as of February 16, 1989 among the Company, the subsidiaries of the Company listed on the signature pages thereto and United States Trust Company of New York, a New York banking corporation (the "Trustee"), relating to the Company's Senior Subordinated Gas Indexed Notes Due 1999 (the "GIN Indenture"). (Incorporated herein by reference to Exhibit 10.15 to the Company's Registration Statement on Form S-2, Registration No. 33-32202.)
4.19 Indenture dated as of February 14, 1990 among the Company and Bank of Montreal Trust Company, relating to the Company's 9% Convertible Subordinated Debentures Due 2015. (Incorporated herein by reference to Exhibit 4.9 to the Company's Annual Report on Form 10-K for the year ended December 31, 1989.)
4.20 First Supplemental Indenture to the GIN Indenture dated as of August 5, 1993 among the Company, the subsidiaries of the Company listed on the signature pages thereto, as Guarantors (the "Guarantors") and the Trustee, relating to the Company's Senior Subordinated Gas Indexed Notes Due 1999. (Incorporated herein by reference to Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 1993.)
4.21 Indenture dated as of August 6, 1993 among the Company, the Guarantors and the Trustee, relating to the Company's Senior Gas Indexed Notes Due 2002. (Incorporated herein by reference to Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 1993.)
4.22 Indenture dated as of August 6, 1993 among the Company, the Guarantors and the Trustee, relating to the Company's 11.5% Senior Secured Notes Due 2000. (Incorporated herein by reference to Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 1993.)
4.23 Pledged Assets Agency Agreement dated as of August 6, 1993 between the Trustee, as Pledged Asset Agent, and Exploration relating to the Company's 11.5% Senior Secured Notes Due 2000. (Incorporated herein by reference to Exhibit 4.5 to the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 1993.)
4.24 Exchange Agreement dated as of July 19, 1993 by and among the Company and The Prudential Insurance Company relating to the Company's Senior Subordinated Gas Indexed Notes Due 1999 (and such other beneficial holders as set forth on Schedule A attached thereto). (Incorporated herein by reference to Exhibit 4.6 to the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 1993.)
4.25 Subscription Agreement dated as of July 27, 1993 between the Company and The Prudential Insurance Company relating to the Company's 11.5% Senior Secured Notes Due 2000 (and such other subscribers thereunder as set forth on Schedule A attached thereto). (Incorporated herein by reference to Exhibit 4.7 to the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 1993.)
Executive Compensation Plans
10.1 The Company's Incentive and Non-Qualified Stock Option and Stock Appreciation Rights Plan as approved by the Company's board of directors (the "Board of Directors") on October 22, 1987 and approved by the Company's stockholders (the "Stockholders") on December 9, 1987 (the "Stock Plan"). (Incorporated herein by reference to Part I of the Company's Registration Statement on Form S-8, Registration No. 33-20496.)
10.2 Amendment to the Stock Plan dated May 25, 1989. (Incorporated herein by reference to Exhibit 10.12 to the Company's Registration Statement on Form S-3, Registration No. 33-34350.)
10.3 Second Amendment to the Stock Plan dated May 17, 1990. (Incorporated herein by reference to Exhibit 10.13 to the Company's Registration Statement on Form S-3, Registration No. 33-34350.)
* 10.4 Supplemental Executive Retirement Agreement dated as of October 8, 1993 between the Company and George P. Giard, Jr.
* 10.5 Supplemental Executive Retirement Agreement dated as of October 8, 1993 between the Company and Robert L. Smith.
Director Compensation Plans
10.6 The Company's Stock Option Plan for Non-Employee Directors (the "1988 Plan") as approved by the Board of Directors on October 22, 1987 and approved by the Stockholders on December 9, 1987. (Incorporated herein by reference to Exhibit 10.2 to the Company's Annual Report on Form 10-K for the six months ended December 31, 1987.)
10.7 First Amendment to the Company's 1988 Plan executed May 25, 1989, to be effective January 1, 1989. (Incorporated herein by reference to Exhibit 10.15 to the Company's Registration Statement on Form S-3, Registration No. 33-34350.)
10.8 The Company's 1989 Stock Option Plan for Non-Employee Directors as approved by the Board of Directors on March 30, 1989 and approved by the Stockholders on May 25, 1989. (Incorporated herein by reference to Exhibit 10.3 to the Company's Registration Statement on Form S-2, Registration No. 33-32202.)
10.9 The Company's 1990 Stock Option Plan for Non-Employee Directors as approved by the Board of Directors on March 15, 1990 and by the Stockholders on May 17, 1990. (Incorporated herein by reference to Exhibit 10.17 to the Company's Registration Statement on Form S-3, Registration No. 33-34350.)
10.10 The Company's 1991 Stock Option Plan for Non-Employee Directors as approved by the Board of Directors on December 27, 1991 and by the Stockholders on May 14, 1992. (Incorporated herein by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K for the year ended December 31, 1992.)
10.11 The Company's 1992 Stock Option Plan for Non-Employee Directors as approved by the Board of Directors on April 16, 1993 and by the Stockholders on June 16, 1993. (Incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 1993.)
Management Warrants
10.12 Amended and Restated Warrant Agreement dated as of April 16, 1993, between the Company and Oil and Gas Finance Limited (a company wholly owned by George P. Giard, Jr.). (Incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 1993.)
10.13 Amended and Restated Warrant Agreement dated as of April 16, 1993 between the Company and Oil and Gas Finance Limited (a company wholly owned by George P. Giard, Jr.). (Incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 1993.)
10.14 Amended and Restated Warrant Agreement dated as of April 16, 1993 between the Company and Robert L. Smith. (Incorporated herein by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 1993.)
* 10.15 Warrant Agreement dated as of January 15, 1993 between the Company and Christopher S. Hardesty.
Other Warrants
10.16 Warrant Agreement dated as of September 18, 1987 between the Company and Grant E. Thayer. (Incorporated herein by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K for the six months ended December 31, 1987.)
10.17 Warrant Agreement dated as of September 13, 1989 between the Company and InterLiberty Investments, Inc. (Incorporated herein by reference to Exhibit 10.37 to the Company's Registration Statement on Form S-3, Registration No. 33-34350.)
Option Agreements
10.18 Option Agreement dated as of November 3, 1987 between the Company and Philip S. Sirianni ("Sirianni"). (Incorporated herein by reference to Exhibit 10.38 to the Company's Registration Statement on Form S-3, Registration No. 33-34350.)
10.19 Option Agreement dated as of December 16, 1988 between the Company and Sirianni. (Incorporated herein by reference to Exhibit 10.39 to the Company's Registration Statement on Form S-3, Registration No. 33-34350.)
10.20 Option Agreement dated as of September 13, 1989 between the Company and Sirianni. (Incorporated herein by reference to Exhibit 10.40 to the Company's Registration Statement on Form S-3, Registration No. 33-34350.)
10.21 Amendment to Stock Option Agreement dated November 1, 1993 between the Company and Sirianni. (Incorporated herein by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 1993.)
10.22 Option Agreement dated November 1, 1993 between the Company and Sirianni. (Incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 1993.)
Agreements Related to Acquisition and Divestures
10.23 Agreement and Plan of Merger among Exploration, Mountain Gas Resources, Inc. and MS Gas Resources, Inc. dated June 11, 1992. (Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 11, 1992.)
10.24 Amendment No. 1 to the Agreement and Plan of Merger dated as of July 16, 1992 among Exploration, Mountain Gas Resources, Inc. and MS Gas Resources, Inc. ("Mountain Gas"). (Incorporated herein by reference to Exhibit 2.2 to the Company's Current Report on Form 8-K dated July 16, 1992.)
10.25 Shareholders Agreement dated as of July 16, 1992 among Mountain Gas, Exploration, MSLEF II, and Certain Other Shareholders. (Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated July 16, 1992.)
10.26 Consulting Agreement dated as of July 16, 1992 between Mountain Gas and George P. Giard, Jr. (Incorporated herein by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K dated July 16, 1992.)
10.27 Consulting Agreement dated as of July 16, 1992 between Mountain Gas and Robert L. Smith. (Incorporated herein by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K dated July 16, 1992.)
10.28 Stock Purchase Agreement dated as of December 7, 1992 by and between Exploration, as seller, and Belden & Blake, as Buyer. (Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated December 11, 1992.)
10.29 Drilling Participation Agreement dated as of December 22, 1992 by and between Presidio West Virginia, Inc. (a wholly- owned subsidiary of Exploration) and Peake Operating Company. (Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated December 22, 1992.)
* 21.1 Subsidiaries of the Registrant.
* 23.1 Consent of Deloitte & Touche.
* 23.2 Consent of Huddleston & Co., Inc.
* 23.3 Consent of Netherland, Sewell & Associates, Inc.
* Filed herewith.
(b) REPORTS ON FORM 8-K
On December 9, 1993, a Form 8-K, dated December 8, 1993, was filed, which reported under Item 5. "Other Events", the interest rate on the Company's Senior Subordinated Gas Indexed Notes Due 1999 to be 13.925% for the period February 16, 1994 to May 15, 1994.
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.
PRESIDIO OIL COMPANY
By: /s/ Robert L. Smith Date: February 15, 1994 Robert L. Smith President and Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURES (Continued)
INDEX TO EXHIBITS