Annual Report (Form 10-K), fiscal year 1994





ITEM 3. LEGAL PROCEEDINGS.
Information regarding the Company's legal proceedings is presented in Note 15 under the heading "Notes to Consolidated Financial Statements" in Part II, Item 8. - "Financial Statements and Supplementary Data."
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
NAME AGE POSITIONS _________________________________________________________________ H. Leighton Steward (60) Chairman of the Board, President and Chief Executive Officer since 1989.
Richard A. Bachmann (50) Director since 1989. Executive Vice President, Finance and Administration and Chief Financial Officer since 1985.
John F. Greene (54) Director since 1989. Executive Vice President, Exploration and Production since 1985.
Jerry D. Carlisle (49) Vice President and Controller since 1984.
Robert J. Chebul (47) Vice President since 1991. Held various managerial positions, including District Manager from 1988 to 1991.
William N. Hahne (43) Vice President since December 1994. General Manager-Production from September 1993 to December 1994. Vice President of NERCO Oil & Gas, Inc. from 1991 to September 1993. Held various technical and managerial posi- tions with Union Texas Petroleum and Union Oil Company of California from 1973 to 1991.
John O. Lyles (49) Vice President since 1992. Vice President and Treasurer from 1984 to 1992.
Joel M. Wilkinson (59) Vice President since 1988.
John A. Williams (50) Vice President since 1988.
Frederick J. Plaeger, II (41) General Counsel and Corporate Secretary since 1992. Corporate Secretary and Senior Counsel from 1989 to 1992.
Louis A. Raspino (43) Treasurer since 1992. Assistant Treasurer from 1984 to 1992.
Each officer holds office until the first meeting of the Board of Directors following the annual meeting of shareholders and until his successor shall have been elected and qualified, or until he shall have resigned or been removed as provided in the LL&E By- Laws. No family relationship exists between any of the above listed executive officers or between any such executive officer and any Director of LL&E.
PART II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Information regarding the Company's Capital Stock is presented under the heading "Capital Stock, Dividends and Other Market Data" in Item 7. - "Management's Discussion and Analysis of Financial Condition and Results of Operations." and under the heading "Market Price and Dividend Data" in Item 8. - "Financial Statements and Supplementary Data."
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA.
The information required hereunder is presented under the heading "Selected Financial Data" in Item 8. - "Financial Statements and Supplementary Data."
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The information required hereunder is presented under the heading "Management's Discussion and Analysis" in Item 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following consolidated financial statements and supplementary data of the Company are included herein:
Page herein
Financial Statements: Report of Management 28 Independent Auditors' Report 29 Consolidated Balance Sheets 30 Consolidated Statements of Earnings (Loss) 31 Consolidated Statements of Stockholders' Equity 32 Consolidated Statements of Cash Flows 33 Notes to Consolidated Financial Statements 34
Unaudited Supplemental Data: Management's Discussion and Analysis 53 Data on Oil and Gas Activities 59 Oil and Gas Operating Data 67 Refining Operating Data 68 Oil and Gas Properties 69 Wells Drilled 70 Selected Financial Data 71 Market Price and Dividend Data 72 Quarterly Data 73
The following financial statements of 50% or less owned persons required by Regulation S-X, Rule 3-09, are included herein:
Page herein
MaraLou Netherlands Partnership and its wholly owned consolidated subsidiary, CLAM Petroleum Company:
Independent Auditors' Report 74 Consolidated Balance Sheets 75 Consolidated Statements of Income 76 Consolidated Statements of Partners' Capital 77 Consolidated Statements of Cash Flows 79 Notes to Consolidated Financial Statements 81
_________________________________________________________________ REPORT OF MANAGEMENT
_________________________________________________________________ The consolidated financial statements of The Louisiana Land and Exploration Company and subsidiaries and the related information included in this Annual Report have been prepared by Management in accordance with generally accepted accounting principles and include certain estimates and judgments which Management considers appropriate. To meet its responsibilities for the fair presentation of consolidated financial statements, Management maintains a system of internal controls, including internal accounting controls, considered appropriate in view of the costs associated with the benefits to be derived. In addition, the Audit Committee meets periodically with the Company's Management, the internal auditors and KPMG Peat Marwick LLP, independent auditors, to review and discuss audit activities and results, internal control procedures and other matters relative to accounting and financial reporting.
Based on the results of these procedures, Management is of the opinion that the system of internal controls in effect during the year ended December 31, 1994 provided reasonable assurance that all transactions were executed in accordance with Management's authorizations, that assets were safeguarded from loss and unauthorized use and that the accounting records and financial statements properly reflect the transactions of the Company.
H. Leighton Steward Richard A. Bachmann Chairman, President and Executive Vice President and Chief Executive Officer Chief Financial Officer
_________________________________________________________________ INDEPENDENT AUDITORS' REPORT
_________________________________________________________________ The Board of Directors and Stockholders The Louisiana Land and Exploration Company:
We have audited the accompanying consolidated balance sheets of The Louisiana Land and Exploration Company and subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of earnings (loss), stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1994. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated 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.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Louisiana Land and Exploration Company and subsidiaries as of December 31, 1994 and 1993, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1994 in conformity with generally accepted accounting principles.
As discussed in Notes 12 and 13 to the consolidated financial statements, in 1993 the Company adopted the methods of accounting for income taxes and postretirement benefits other than pensions prescribed by Statements of Financial Accounting Standards Nos. 109 and 106, respectively. In addition, as discussed in Note 2 to the consolidated financial statements, in 1994 the Company changed its methods of assessing the impairment of the capitalized costs of proved oil and gas properties and other long-lived assets.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
New Orleans, Louisiana February 3, 1995
In December 1993, the Company acquired an 11.26% working interest in Block 16/17 in the U.K. North Sea (T-Block) from British Gas Exploration and Production Limited for approximately $187 million in cash. The purchase was financed initially through the credit facility discussed in Note 10. Initial production from T-Block came onstream in late 1993 and had an insignificant impact on results of operations.
Dispositions In 1994, the Company sold various domestic oil and gas producing properties for approximately $15 million resulting in a gain of $6.8 million (before income taxes of $2.3 million).
In December 1993, the Company completed the sale of certain oil and gas producing properties, undeveloped acreage and seismic data located in southern Alberta, Canada for approximately $42.8 million resulting in a gain, net of associated expenses, of approximately $23.5 million (before income taxes of $10.3 million). The properties sold generated revenues of $12.1 million and $15.3 million and pretax earnings of $1.2 million and $1.6 million in 1993 and 1992, respectively.
4. Cash Flows All of the Company's cash investments are liquid short-term debt instruments and are considered to be cash equivalents. These cash investments are carried in the accompanying balance sheets at cost plus accrued interest, which approximates fair value. Cash flows related to hedging activities through forward/futures contracts are classified in the same categories as that from the items being hedged.
In 1992, the Company acquired certain proved properties for approximately $36 million and incurred a short-term liability which was outstanding at year end, the settlement of which is included in 1993 cash flows from investing activities.
5. Restructuring and Other Nonrecurring Charges/Credits As reported in prior years, the State of Louisiana had asserted claims against the Company in its capacity as sublessor to Texaco of certain State leases, based upon Texaco's alleged royalty miscalculations. In February 1994, a settlement was agreed to by all parties. The amounts previously provided in the financial statements for this litigation exceeded the cash payment required by $10 million, which was reversed during the first quarter of 1994. In the first quarter of 1992, the Company had similarly reduced its litigation accrual for the State of Louisiana gas royalty claim by $25 million. These adjustments to the litigation accrual are included in "Net increase (decrease) in payables" in the accompanying Consolidated Statements of Cash Flows.
In the first quarter of 1992, the Company recorded a charge of $52.4 million (before income tax benefits of approximately $17.8 million) against earnings to provide for the restructuring of its oil and gas operations. This charge included provisions for estimated losses on the disposition of selected domestic properties of $47.6 million (both developed and undeveloped) and costs associated with staff retirements, reductions and related transition expenses of $4.8 million. These charges were reduced by the aforementioned $25 million reduction in a litigation accrual. The Company completed the sale of substantially all of the selected properties for a purchase price of $48.1 million in the third quarter of 1992 resulting in a gain of approximately $8 million which was applied against the restructuring charges.
6. Inventories
At December 31, 1993, the LIFO cost of refinery inventories exceeded their current market values which resulted in a non-cash charge to earnings of $6.5 million (before income tax benefits of $2.3 million) which is included in "Refinery cost of sales and operating expenses" in the accompanying Consolidated Statements of Earnings (Loss).
The Company's equity in earnings of affiliates, which is included in "Other revenues" in the accompanying Consolidated Statements of Earnings (Loss), amounted to $4.2 million, $2.4 million and $6.9 million in 1994, 1993 and 1992, respectively. Cash dividends received from MaraLou/CLAM in 1994, 1993 and 1992 totaled $6 million, $10 million and $7.5 million, respectively.
The consolidated financial position of MaraLou and its wholly owned subsidiary, CLAM, as of December 31, 1994 and 1993 and the results of their operations for each of the years in the three-year period ended December 31, 1994 are summarized below.
MaraLou applied the provisions of SFAS No. 109 as of January 1, 1993 without restating prior years' financial statements. Upon adoption, MaraLou recorded a non-cash charge to earnings of $6 million ($3 million net to the Company's interest).
The common stock of CLAM is pledged as collateral under a revolving credit agreement between MaraLou and a group of banks. The credit agreement is nonrecourse to the partners of MaraLou.
8. Property, Plant and Equipment
9. Financial Instruments and Hedging Activities The Company has only limited involvement with derivative financial instruments and does not use them for trading purposes. They are used solely to manage well-defined interest rate, foreign currency and commodity price risks.
At December 31, 1994, the Company had $100 million of notional value interest rate swap agreements terminating in 1997; none were in place at the end of 1993 (see Note 11). These agreements allow the Company to manage fixed- and variable-rate interest exposure by converting a portion of the Company's fixed-rate exposure to variable rate. The fair value of the interest rate swap agreements at December 31, 1994 amounted to $4.7 million, which represents the Company's cost to terminate the agreements. The Company also had $11.7 million of British pound currency forward contracts maturing from 1995 through 1997. Such contracts totaled $24.6 million at December 31, 1993. These contracts lock-in the exchange rate for a portion of the British pounds needed to fund the Company's future expenditures in the North Sea. British pound currency forward contracts are valued at the net benefit or cost to the Company to unwind its forward position, which was estimated to be a benefit of $.7 million and a cost of $1 million at December 31, 1994 and 1993, respectively.
The carrying amounts of cash and cash equivalents and long-term, variable-rate debt approximate fair value. The Company estimates the fair value of its long-term, fixed-rate debt as $353 million and $546 million at December 31, 1994 and 1993, respectively, based upon quoted market prices for the same or similar issues. Such debt was recorded at carrying values of $400 million and $533 million, resulting in an unrealized gain of $47 million and an unrealized loss of $13 million for the respective periods.
The Company also used futures, forwards, options and swap contracts to reduce price volatility of refinery feedstock and the sale of refined products produced therefrom. Although generally settled in cash, these contracts permit settlement by delivery of commodities. At December 31, 1994, the Company had contracts maturing monthly
through November 1995 covering the net purchase of 1.4 million barrels of feedstock totaling $25.5 million and the net sale of 1.4 million barrels of refined products totaling $30.1 million. Gains or losses resulting from market changes will be offset by losses or gains on the Company's hedged inventory or production. The Company processed over 17 million barrels of crude oil and sold more than 19 million barrels of refined products in 1994 and had approximately 1.9 million barrels of crude oil and petroleum products in its refinery inventories at December 31, 1994.
These financial instruments are generally executed on the New York Mercantile Exchange or with major financial or commodities trading institutions which, along with cash and cash equivalents and accounts receivable, expose the Company to acceptable levels of market and credit risks and may at times be concentrated with certain counterparties or groups of counterparties. The credit worthiness of counterparties is subject to continuing review and full performance is anticipated.
10. Long-term Debt
Debt maturities for the next five years follows:
To finance the aforementioned NERCO and T-Block acquisitions (see Note 3), refinance certain existing indebtedness and fund general corporate activities, the Company entered into a $790 million credit facility with a syndicate of banks in September 1993. Commitments under the agreement originally consisted of (i) a $540 million revolving credit facility and (ii) a $250 million term loan facility (which was utilized and repaid and is no longer available
to the Company). The revolving credit facility, which was subsequently reduced to $450 million, was renegotiated in 1994 and converted to a reducing revolving loan. The commitments will be reduced by $20 million quarterly from June 1995 through September 2000. Amounts outstanding under the revolving credit facility bear interest at fluctuating rates subject to certain options chosen in advance by the Company. Borrowings under the facility in 1994 were at an average interest rate of 4.8%. Borrowings under the revolving credit facility and the term loan facility during 1993 were at average interest rates of 5%. Fees ranging from .125% to .30%, based upon financial tests, debt ratings and subject to certain options chosen by the Company, are charged on the facility.
In June 1992, the Company registered under the Securities and Exchange Commission's shelf registration rules $300 million of senior unsecured debt securities to be issued from time to time on terms to be then determined. In June 1992, the Company sold $100 million of 8-1/4% Notes due 2002. In April 1993, the Company completed its second $100 million public offering of debt securities under the existing shelf registration filed in 1992 with the issuance of 7-5/8% Debentures due 2013. In November 1993, the Company registered up to $500 million of senior unsecured debt securities under the Securities and Exchange Commission's shelf registration rules, which included the $100 million available under the shelf registration filed in 1992. In December 1993, the Company completed a $200 million public offering with the issuance of 7.65% Debentures due 2023.
In 1987 and 1988, the Company borrowed $10.2 million and $14 million, respectively, from a bank (unsecured) and loaned the proceeds to the leveraged employee stock ownership plan (ESOP) to fund its purchases of 836,368 shares of Company capital stock. The loans to the ESOP are secured by the Company's capital stock owned by the ESOP. The interest rates vary with time and market conditions and are determined by the bank subject to certain options chosen in advance by the Company. The average interest rates for both loans in 1994 and 1993 were 4% and 3.1%, respectively.
During 1994, the average monthly balance of commercial paper notes outstanding was $118 million; the maximum amount outstanding during that period was $301 million. Commercial paper borrowings during 1994 and 1993 were at average interest rates of 4.6% and 3.3%, respectively. The commercial paper program is supported by the unused portion of the aforementioned revolving credit facility.
The Term Loan with banks, which was retired in January 1994, was unsecured and was payable in July 1994. The balance was excluded from current liabilities as the Company refinanced the balance due on a long-term basis utilizing the revolving credit facility. The early retirement, completed at a price of 102.4% of principal, and the premium, along with unamortized discount, resulted in an extraordinary loss of $3.3 million, after income tax benefits of
$1.7 million. In September 1992, the Company announced the call for early retirement of the 8-1/2% Convertible Subordinated Debentures due September 2000. The redemption, completed at a price of 101.66% of principal, and the premium, along with unamortized discount, resulted in an extraordinary loss of $5.6 million, after income tax benefits of $2.8 million.
11. Interest and Debt Expenses For the years ended December 31, 1994, 1993 and 1992, interest costs incurred, which were essentially the same as interest payments, were $47.9 million, $47 million and $37.5 million, respectively, of which $22.3 million, $18.7 million and $12.9 million, respectively, were capitalized as part of the cost of property, plant and equipment.
In connection with the credit facility discussed in Note 10, bank fees and other costs totaled $8.1 million of which $6.7 million was charged to interest and debt expenses in the fourth quarter of 1993.
In 1992 and 1993, the Company participated in interest rate swaps (which were to terminate in 1994 and 1996, respectively) having a notional principal amount totaling $200 million. Under the agreements, the Company received an annual fixed rate and paid a variable rate based on the six-month London Interbank Offered Rate. In September 1993, the Company terminated both agreements and deferred a gain of approximately $3.6 million which will be recognized over the remaining terms of the respective agreements as reductions of interest expense.
12. Income Taxes As explained in Note 1(e), the Company adopted SFAS No. 109 effective January 1, 1993. Upon adoption, the Company recorded a non-cash credit to earnings in the first quarter of 1993 of $13.7 million which represented the recognition of deferred tax assets existing at December 31, 1992.
With the enactment of the Budget Reconciliation Act of 1993, the Federal statutory corporate income tax rate was increased from 34% to 35% retroactive to January 1, 1993. As a result, the Company increased its deferred income tax liabilities as of January 1, 1993 with a non-cash charge to income tax expense of $3 million in the third quarter of 1993.
The components of earnings (loss) before income taxes were taxed under the following jurisdictions:
Components of income tax expense (benefit) are as follows:
Tax expense (benefit) differs from the amounts computed by applying the U.S. Federal tax rate (1994-93 - 35%; 1992 - 34%) to earnings (loss) before income tax. The reasons for the differences are as follows:
As a result of the prospective adoption of SFAS No. 109 effective January 1, 1993, the following additional disclosures are presented as of and for the years ended December 31, 1994 and 1993.
Total income tax expense (benefit) was allocated as follows:
The significant components of income tax expense (benefit) attri- butable to income from continuing operations are as follows:
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:
The net changes in the valuation allowance for the years ended December 31, 1994 and 1993 were increases of $10.5 million and $3 million, respectively. These changes were made to provide for uncertainties surrounding the realization of certain foreign tax credit carryforwards. The remaining balance of the deferred tax assets should be realized through future operating results and the reversal of taxable temporary differences.
Deferred tax expense (benefit) included the following components, the disclosure of which was prescribed by the prior standard:
For the years ended December 31, 1994, 1993 and 1992, the Company's net cash payments (refunds) of income taxes totaled $(1.1) million, $7.1 million and $(.6) million, respectively.
At December 31, 1994, the Company has foreign tax credit carryforwards for Federal income tax purposes of $11.7 million which are available through 1997 to offset future Federal income taxes, if any. The Company has Federal net operating loss carryforwards totaling $103.9 million which are available to offset future Federal taxable income through 2009. The Company also has alternative minimum tax credit carryforwards of $1.9 million which are available to reduce Federal regular income taxes, if any, over an indefinite period.
13. Retirement Benefits The Company has a noncontributory defined benefit pension plan covering all eligible employees, with benefits based on years of service and the employee's highest three-year average monthly earnings. The Company's funding policy is intended to provide for both benefits attributed to service to-date and for those expected to be earned in the future. Plan assets consist primarily of stocks, bonds and short-term cash investments, including 51,971 shares of Company capital stock as of December 31, 1994 and 1993 with market values of $1.9 million and $2.1 million, respectively. Since the spin-off of the pension plan of a discontinued subsidiary in 1985 and the contribution of excess assets remaining after purchasing annuities for affected employees, the pension plan did not require funding through the year ended December 31, 1992. Funding requirements for the years ended December 31, 1994 and 1993 amounted to $5.5 million and $4.2 million, respectively.
The following tables set forth the plan's funded status and amounts recognized in the statements of financial position and results of operations at December 31:
The Company has postretirement medical and dental care plans for all eligible retirees and their dependents with eligibility based on age and years of service upon retirement. The Company also maintains a Medicare Part B reimbursement plan and life insurance coverage for a closed group of retirees of a former subsidiary for which estimated benefits of approximately $4.7 million were accrued at December 31, 1992. Effective January 1, 1993, the Company adopted Statement of Financial Accounting Standards No. 106 (SFAS No. 106) - "Employers' Accounting for Postretirement Benefits Other than Pensions," which changed the Company's practice of accounting for postretirement benefits on a pay-as-you-go (cash) basis by requiring accrual, during the years that the employee renders the necessary service, of the expected cost of providing those benefits to an employee and the employee's beneficiaries and covered dependents. Upon adoption, the Company recorded a transition liability of approximately $20.5 million ($13.5 million after income taxes) as a one-time, non-cash charge against earnings in the first quarter of 1993.
The postretirement benefit plans are unfunded and the Company continues to fund claims on a cash basis. The following tables set forth the amounts recognized in the statements of financial position and results of operations at December 31:
Assumptions utilized to measure the accumulated postretirement obligation at December 31, 1994 and 1993 were: discount rates of 8% and 7.25%, respectively; a health care cost trend rate of 14% declining over 10 years to 5% and held constant thereafter. A 1% increase in the assumed trend rates would have resulted in increases in the accumulated postretirement benefit obligation at December 31, 1994 and 1993 of $1.7 million and $2.6 million, respectively; the aggregate of service cost and interest cost for the years ended December 31, 1994 and 1993 would have increased by $.5 million and $.4 million, respectively.
14. Capital Stock, Options and Rights In November 1993, the Company completed a public offering of 4.4 million shares of capital stock at a price of $44.625 per share. The capital stock was taken from the Company's treasury at an average cost of $33.125 per share. The excess of net proceeds over the cost of treasury stock issued was credited to additional paid- in capital. The net proceeds of the offering, after underwriting commissions and expenses, were approximately $188.8 million.
Under the 1988 Long-term Stock Incentive Plan, the Company may grant to officers and key employees stock options, stock appreciation rights, performance shares, performance units, restricted stock or restricted stock units for up to 2.8 million shares of the Company's capital stock. Stock options are exercisable at the market price on the date of the grant, generally over a two-year period at the rate of 50% each year commencing on the first anniversary of the date of grant; all options expire ten years from the date of grant. In 1994 and 1993, options for 250,100 shares and 257,700 shares were granted, respectively. The restricted stock and performance shares awarded under the plan entitle the grantee to the rights of a shareholder, including the right to receive dividends and to vote such shares, but the shares are restricted as to sale, transfer or encumbrance. Restricted stock is released to the grantee over varying periods after a one- year waiting period has expired. In 1994 and 1993, awards were granted for 9,000 shares and 34,250 shares of restricted stock, respectively. In 1994, 12,081 shares were released to grantees; none were released in 1993. The performance cycle consists of a three-year period, beginning with the year of grant, at the end of which certain performance goals must be attained by the Company for the unrestricted performance shares to be issued to the grantee. Awards granted in 1994 and 1993 for performance shares amounted to 19,500 shares and 18,900 shares, respectively. Performance shares issued in 1994 and 1993 amounted to 10,496 shares and 15,257 shares, respectively. Restricted stock and performance share awards are "compensatory" awards and the Company accrued compensation expense of $.1 million, $.7 million and $1 million in 1994, 1993 and 1992, respectively.
Under the 1990 Stock Option Plan for Non-Employee Directors, which expired in May 1994, the Company could grant stock options to non- employee directors for up to 150,000 shares of the Company's capital stock. As prescribed by the plan, the options are exercisable at the market price at the date of grant over a two- year period at the rate of 50% each year commencing on the first anniversary of the date of grant; all options expire ten years from the date of grant. Awards for 22,500 shares and 20,000 shares were granted in 1994 and 1993, respectively.
At December 31, 1994, 919,372 shares of capital stock were reserved for future grants under all plans.
Total grants outstanding under the plans and the changes therein for the periods indicated follows:
In 1986, the Company's Board of Directors declared a dividend to shareholders consisting of one Capital Stock Purchase Right on each outstanding share of capital stock. A Right will also be issued with each share of capital stock that becomes outstanding prior to the time the Rights become exercisable or expire. If a person or group acquires beneficial ownership of 20% or more, or announces a tender offer that would result in beneficial ownership of 20% or more, of the shares of outstanding capital stock, the Rights become exercisable ten days thereafter and each Right will entitle its holder to purchase one share of capital stock for $90.
If the Company is acquired in a business combination transaction, each Right not owned by the 20% holder will entitle its holder to purchase, for $90, common shares of the acquiring company having a market value of $180. Alternatively, if a 20% holder were to acquire the Company by means of a reverse merger in which the Company and its capital stock survive or were to engage in certain "self-dealing" transactions, or if a person or group were to acquire 30% or more of the outstanding capital stock (other than pursuant to a cash offer for all shares), each Right not owned by the acquiring person would entitle its holder to purchase, for $90, capital stock of the Company having a market value of $180. Each Right can be redeemed by the Company for $.05, subject to the occurrence of certain events and other restrictions, and expires in 1996. These Rights may cause substantial ownership dilution to a person or group who attempts to acquire the Company without approval of the Company's Board of Directors. The Rights should not interfere with a business combination transaction that has been approved by the Board of Directors.
15. Contingencies The Company has been notified by the U.S. Environmental Protection Agency that it is one of many Potentially Responsible Parties (PRP) at three National Priorities List sites. Based on its evaluation of the potential total cleanup costs, its estimate of its potential exposure, and the viability of the other PRP's, the Company believes that any costs ultimately required to be borne by it at these sites will not have a material adverse effect on its results of operations, cash flow or financial position.
The Company is subject to other legal proceedings, claims and liabilities which arise in the ordinary course of its business. In the opinion of Management, the amount of ultimate liability with respect to these actions will not have a material adverse effect on results of operations, cash flow or financial position of the Company.
The table below sets forth estimates of the domestic sulphur reserves attributable to the Company's interests as of December 31:
_________________________________________________________________ Standardized Measure of Discounted Future Net Cash Flows and Changes Therein Relating to Proved Oil and Gas Reserves
The following supplemental data on the Company's oil and gas activities were prepared in accordance with the Financial Accounting Standards Board's (FASB) Statement of Financial Accounting Standards No. 69 - "Disclosures About Oil and Gas Producing Activities." Estimated future net cash flows are determined by: (1) applying the respective year-end oil and gas prices to the Company's estimates of future production of proved reserves; (2) deducting estimates of the future costs of development and production of proved reserves based on the assumed continuation of the cost levels and economic conditions existing at the respective year-end; and (3) deducting estimates of future income taxes based on the respective year-end and future statutory tax rates. Present value is determined using the FASB-prescribed discount rate of 10% per annum.
Although the information presented is based on the Company's best estimates of the required data, the methods and assumptions used in preparing the data were those prescribed by the FASB. Although unrealistic, they were specified in order to achieve uniformity in assumptions and to provide for the use of reasonably objective data. It is important to note here that this information is neither fair market value nor the present value of future cash flows and it does not reflect changes in oil and gas prices experienced since the respective year-end. It is primarily a tool designed by the FASB to allow for a reasonable comparison of oil and gas reserves and changes therein through the use of a standardized method. Accordingly, the Company cautions that this data should not be used for other than its intended purpose.
Independent Auditors' Report
The Partners MaraLou Netherlands Partnership:
We have audited the accompanying consolidated balance sheets of MaraLou Netherlands Partnership and subsidiary as of December 31, 1994 and 1993, and the related consolidated statements of income, partners' capital, and cash flows for each of the years in the three-year period ended December 31, 1994. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated 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.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of MaraLou Netherlands Partnership and subsidiary as of December 31, 1994 and 1993, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1994 in conformity with generally accepted accounting principles.
As discussed in note 4 to the consolidated financial statements, the Partnership adopted the provisions of the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" in 1993.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Houston, Texas February 8, 1995
(Continued)
(Continued)
MARALOU NETHERLANDS PARTNERSHIP
Notes to Consolidated Financial Statements
December 31, 1994, 1993 and 1992
1. Organization and summary of significant accounting policies
Organization and ownership: MaraLou Netherlands Partnership (MaraLou), a Texas general partnership, was formed on March 27, 1985 by LL&E (Netherlands), Inc. (LL&E Netherlands) and Marathon Petroleum Netherlands, Ltd. (Marathon Netherlands) for the purpose of owning their interests in CLAM Petroleum Company (CLAM) and for the purpose of purchasing the outstanding shares of CLAM held by Netherlands-Cities Services, Inc. On March 27, 1985 both partners agreed to contribute their respective ten thousand shares of CLAM to MaraLou. These shares were transferred to MaraLou on June 21, 1985. The remaining shares held by Netherlands-Cities Services, Inc. were acquired by MaraLou for $85,381,881 on March 29, 1985. The acquisition has been accounted for using the purchase method of accounting effective January 1, 1985.
On December 6, 1991 an agreement was concluded whereby LL&E Netherlands Petroleum Company, an affiliated company to LL&E Netherlands - both of which are wholly owned subsidiaries of The Louisiana Land and Exploration Company, contributed Netherlands North Sea license interests and other assets valued at $11,629,000 for five hundred newly issued shares of CLAM stock. For financial reporting purposes, the contribution made by LL&E Netherlands Petroleum Company in excess of its calculated minority interest is reflected in Partners' capital as an addition to the LL&E Netherlands capital balance. MaraLou made a cash contribution of $11,629,000 for an additional five hundred newly issued shares of CLAM stock. The contributed cash is to be used to develop the North Sea license interest contributed by LL&E Netherlands Petroleum Company. MaraLou subsequently sold all of its newly issued shares of CLAM stock to Marathon Netherlands, a partner in MaraLou, which purchased the shares with a note valued at $11,629,000, on which $6,000,000 was paid in 1991 and $6,000,000, inclusive of interest, was paid in 1992. These newly issued shares of CLAM stock have been pledged as security for MaraLou and CLAM's revolving credit agreement (see Note 6).
CLAM Petroleum Company, a Delaware Corporation, was formed in October 1975 by LL&E Netherlands, Marathon Netherlands and Netherlands-Cities Service, Inc. (stockholders) for the purpose of owning their interest in certain licenses and agreements covering hydrocarbon operations in The Netherlands and for the purpose of entering into agreements with lending institutions to finance such interest. Effective May 24, 1976 the stockholders assigned their interests and obligations under the licenses and related agreements to CLAM. CLAM has no operations outside the oil and gas industry or in areas other than The Netherlands North Sea.
The financial statements reflect the consolidation of CLAM Petroleum Company (the Company) with MaraLou for the period from January 1, 1985. The financial statements also reflect the interests and earnings of the minority shareholders, LL&E Netherlands Petroleum Company and Marathon Netherlands. Currently, MaraLou has no interests other than in the operation of CLAM.
Cash equivalents: Cash equivalents of $-0-, $11,133,745 and $18,721,023 at December 31, 1994, 1993 and 1992, respectively, consist of Eurodollar and Euroguilder investments. For purposes of the statements of cash flows, MaraLou considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents.
Joint venture agreements: CLAM, together with unrelated parties, has interests in certain prospecting and production licenses and related operating agreements which provide for the joint conduct of seismic, geological, exploration and development activities on the continental shelf of The Netherlands. The accompanying financial statements include CLAM's share of operations as reported to it by the operator of the joint venture. The amounts reported by the operator of the joint venture are subject to an annual audit by the non-operators. The audit for the year 1993 has been conducted with the non-operators awaiting the operator's initial response to the audit report.
Petroleum exploration and development costs: CLAM follows the successful efforts method of accounting for oil and gas properties. Exploration expenses, including geological and geophysical costs, prospecting costs, carrying costs and exploratory dry hole costs are charged against income as incurred. The acquisition costs of unproved properties are capitalized with appropriate provision for impairment based upon periodic assessments of such properties. All development costs, including development dry hole costs, are capitalized. Capitalized costs are adjusted annually for cash adjustments relating to changes in CLAM's share in gas reserve estimates (see Note 7).
Depletion, amortization and depreciation: Depletion is provided under the unit-of-production method based upon estimates of proved-developed reserves. Depreciation is based on estimated useful life. Reserve determinations are management's best estimates and generally are related to economic and operating conditions. Depletion and depreciation rates are adjusted for future estimated salvage values.
CLAM property, plant and equipment retirements: Upon sale or retirement of property, plant and equipment, the cost and related accumulated depletion, amortization and depreciation are eliminated from the accounts and the gain or loss is reflected in income.
CLAM platform abandonment amortization: Platform abandonment amortization is provided under the unit- of-production method based upon estimates of proved-developed reserves. Amortization rates are adjusted for future estimated abandonment costs. Platform abandonment amortization is charged to operating expense.
2. Related party transactions
CLAM transactions with related parties consisted of charges for geological, geophysical and administrative services rendered by an affiliate under two service contracts and administrative services rendered by another affilate. Such charges were approximately $2,183,002, $2,512,536 and $2,530,608 for 1994, 1993 and 1992, respectively. Salaries and related social charges included therein amounted to $1,449,062, $1,685,046 and $1,858,876 for 1994, 1993 and 1992, respectively.
MaraLou transactions with related parties consisted of charges for administrative services rendered by an affiliate amounting to $59,880, $55,800 and $58,200 in 1994, 1993 and 1992, respectively.
3. Property, plant and equipment
Changes in property, plant and equipment for the years ended December 31, 1994, 1993 and 1992 are as follows (in thousands of U.S. dollars):
4. Federal and foreign income taxes
MaraLou is a partnership and, therefore, does not pay income taxes. Since CLAM (wholly owned by MaraLou) is a corporation, income taxes included in the accompanying consolidated financial statements have been determined utilizing applicable domestic and foreign tax rates.
The FASB has issued Statement of Financial Accounting Standard (SFAS) No. 109, "Accounting for Income Taxes" which superseded SFAS No. 96, "Accounting for Income Taxes."
SFAS 109 was adopted on January 1, 1993 and requires a change from the deferred method of accounting for income taxes to the asset and liability method. Under the new method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates applicable to those years in which the temporary differences between financial statement carrying amounts and tax bases are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period when the change is enacted.
Dutch investment incentive premiums (WIR) are credited to foreign income tax in the year in which they are claimed. CLAM incurred WIR premium expense of $301,355, $60,331 and $371,771 in 1994, 1993 and 1992, respectively.
Details of federal and foreign income taxes (in thousands of U.S. dollars) are as follows:
Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of 35% for 1994 and 1993 and 34% for 1992, respectively, to income before income taxes of CLAM as a result of the following (in thousands of U.S. dollars):
Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to significant portions of the deferred tax assets and liabilities at December 31, 1994 and 1993 relate to the following (in thousands of U.S. dollars):
The Company's 1994 and 1993 current tax liability was determined on a regular tax basis. A minimum tax carryforward of $339,175 remains at December 31, 1994.
5. CLAM foreign currency translation adjustment
As of January 1, 1983 CLAM adopted Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation" (SFAS No. 52), under which the functional currency is deemed to be the Dutch guilder. Effective January 1, 1987 CLAM changed its functional currency from the Dutch guilder to the U.S. dollar. The change was precipitated by the significant effect on CLAM's operation of a new dollar-driven gas sales contract which was effective January 1, 1987 and the Tax Reform Act of 1986. In accordance with SFAS No 52, there is no restatement of prior years' financial statements and the translated amounts for nonmonetary assets as of December 31, 1986 have become the accounting basis for those assets in the year of the change.
6. Debt
On July 25, 1985 MaraLou and CLAM entered into a revolving credit agreement, which was amended and restated as of June 19, 1992, with a syndicate of major international banks to fund the purchase by MaraLou of CLAM shares previously owned by Netherlands-Cities Service, Inc. and to provide working capital for CLAM. The banks' total commitment as of December 31, 1994 and December 31, 1993 was $110,000,000. Interest is paid, at the borrower's option, based on the prime rate, the London Interbank Offered Rate (LIBOR), or an adjusted CD rate. A contractual margin is added to LIBOR and CD based borrowings. The all-in interest rates for CLAM for December 31, 1994 and December 31, 1993 were 6.9375% and 3.9375%, respectively. During the revolving credit period, the borrowers are obligated to pay a commitment fee of 1/4% on the unused committed portion of the facility. All of the CLAM
common stock held by MaraLou has been pledged as security for the facility. In addition, under certain circumstances MaraLou can exercise an option to purchase the shares held by LL&E Netherlands Petroleum Company and Marathon Petroleum Netherlands, Ltd. for a nominal amount. The option agreement has been assigned to the banks as security for the facility.
The credit agreement permits CLAM and MaraLou to incur total debt up to an agreed borrowing base which at December 31, 1994 and December 31, 1993 was $132,000,000 and $145,000,000. The agreement provides that the borrowing base is reduced periodically over the term of the facilty which is currently scheduled to expire on December 31, 2000. The borrowing base and the scheduled reductions may be adjusted based on a redetermination of the net present value of the projections of certain cash flows included in an Engineering Report prepared by petroleum engineers.
The outstanding balances for MaraLou and CLAM, respectively, were $-0- and $96,000,000, at December 31, 1994 of which $-0- was due within one year. The outstanding balances for MaraLou and CLAM, respectively, were $-0- and $87,800,000 at December 31, 1993. At December 31, 1994, the required reductions to the borrowing base in each of the next five years are $-0- in 1995, $-0- in 1996, $8,000,000 in 1997, $29,000,000 in 1998, $30,000,000 in 1999 and $29,000,000 in 2000.
CLAM has an unsecured combined short-term loan and overdraft facility of Dfl. 80,000,000 ($46,101,539 at year-end exchange rate). On December 31, 1994 and December 31, 1993 the outstanding balances relating to this facility were $-0-. Interest rates are determined at the time borrowings are made.
7. Annual evaluation of gas reserves
Under the provisions of the Joint Development Operating Agreement to which CLAM is a party, an annual estimate of gas reserves is to be made and agreed upon by the Area Management Committee. Based upon such estimate, each participant's investment in the area properties, as defined, is to be adjusted so that a participant's investment is in proportion to its interest in the remaining reserves. Adjustments to the investments are made in cash in the year following the date the reserve revision is agreed upon.
In 1992, the Area Management Committee agreed to freeze each participant's interest through 1994, at the level agreed upon in 1992. However, in 1994 new entitlements were agreed upon, effective January 1, 1994. CLAM made a cash payment of $15,382,204 to equalize past investment. New entitlement estimates will be agreed upon in 1995.
8. Reserves of oil and gas (unaudited)
CLAM's share of proven gas reserves at January 1, 1995 and 1994 are 261,990 MMCF and 317,737 MMCF, respectively.
9. Major customer
CLAM has one major customer from which it derives 97% of its sales revenue. CLAM was required under its production license to offer its production first to this customer, which is partially owned by The Netherlands government. Production is sold to this customer under five contracts representing various partnership interests and gas qualities.
10. Net profits interest agreement
CLAM entered into an agreement dated November 1, 1981 which requires CLAM to pay a portion of its net profits ("net profits interest") to an unrelated party in exchange for a 7-1/2% participation interest in certain blocks. The "net profits interest" is equal to one twenty-fourth (1/24) of CLAM's revenues from the contract area, after various deductions, as defined in the agreement.
11. Issuance of production licenses
In March 1990, a production license was granted by the Minister of Economics Affairs of the Netherlands covering the L12a and L12b/L15b blocks. As a result, the Dutch Government, through Energie Beheer Nederland (EBN) (a Dutch company wholly owned by the Dutch Government) exercised its option to participate 40% in the L12a block and 50% in the L12b/L15b block. CLAM was subsequently reimbursed $10,628,572 during 1990, all of which was included in income because there were costs associated with these blocks which had been written-off in prior years. Components of the reimbursement were:
Exploration well cost (previously written off as dry wells) $ 5,595,076
Exploration administrative expense 1,818,220
Interest 3,215,276
Total reimbursement $10,628,572
In 1991, it was determined that the portion of the above noted reimbursement allocable to trapping unit L12-FC, within blocks L12b/L15b, would be refunded to EBN as production on this trapping unit is not expected to commence within the 48-month requirement stipulated by the contractual agreement with EBN (the Agreement). The refundable amount, which CLAM expected to repay in 1994, was recorded as a long-term receivable of $3.6 million, interest expense of $1.5 million and an accrued liability of $5.1 million. The Agreement calls for EBN to reimburse the funds to CLAM net of interest upon first production from trapping unit L12-FC, which is expected to occur in 1997.
In 1992, it was determined that the portion of the above noted reimbursement allocable to trapping units L12-FA and L12-FB, within blocks L12a and L12b/L15b, would be refunded to EBN as production on these trapping units are not expected to commence within the 48-month requirement stipulated by the Agreement. The refundable amount for L12-FA and L12-FB, which CLAM expected to repay in 1994, was recorded as a long-term receivable of $0.5 and $1.6 million, respectively, interest expense $0.2 million and $0.6 million, respectively and an accrued liability of $0.7 million and $2.2 million, respectively. The Agreement calls for EBN to reimburse the respective funds to CLAM net of interest upon first production from trapping units L12-FA and L12-FB, which is expected to occur in 2000 and 1998, respectively.
In 1994, the contractual agreement with EBN (the Agreement) was renegotiated with the result being that the refundable amounts for the L12-FB and L12-FC trapping units will have to be repaid by December 31, 1999 unless production has commenced prior to this date. Additionally, it was agreed there is no repayment obligation for the L12-FA trapping unit, and resulting in a reversal of the associated long-term receivable, interest expense and accrued liability.
12. Disclosures about fair value of financial instruments
Cash and Cash Equivalents, Receivables, Due from Operator of Joint Venture, Due to Affiliated Company, Accounts Payable, and Due to Operator of Joint Venture
- The carrying amount approximates fair value because of the short maturity of these instruments.
Long-Term Receivable
- The estimated fair value of the Company's long-term receivable is as follows (in thousands of U.S. dollars):
At December 31, 1994 Carrying Estimated Amount Fair Value Long-term receivable $5,774 $3,631
The fair value of the long-term receivable was based on discounted cash flows.
Long-Term Debt Due to Banks
- The carrying amount approximates fair value because of the variable rate of interest associated with this debt.
Derivatives
- MaraLou has no derivative financial instruments.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information relating to directors of the Registrant will be contained in the definitive Proxy Statement for its Annual Meeting of Stockholders to be held on May 11, 1995, which the Registrant will file pursuant to Regulation 14A not later than 120 days after December 31, 1994, and such information is incorporated herein by reference in accordance with General Instruction G(3) of Form 10-K. Information relating to executive officers of the Registrant appears at page 25 of this Annual Report on Form 10-K.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION.
Information relating to the compensation of the Registrant's executive officers and directors will be contained in the definitive Proxy Statement referred to above in Item 10. - "Directors and Executive Officers of the Registrant," and such information is incorporated herein by reference in accordance with General Instruction G(3) of Form 10-K.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information relating to beneficial ownership of securities will be contained in the definitive Proxy Statement referred to above in Item 10. - "Directors and Executive Officers of the Registrant," and such information is incorporated herein by reference in accordance with General Instruction G(3) of Form 10-K.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information relating to transactions with management and others and certain business relationships regarding directors will be contained in the definitive Proxy Statement referred to above in Item 10. - "Directors and Executive Officers of the Registrant," and such information is incorporated herein by reference in accordance with General Instruction G(3) of Form 10-K.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORMS 8-K.
(a)(1) Financial Statements - the information required hereunder is included in Item 8. - "Financial Statements and Supplementary Data."
(a)(2) Financial Statement Schedules - all financial statement schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.
(a)(3) Index to Exhibits - the information required hereunder is included herein.
(b) Reports on Form 8-K - no reports on Form 8-K were filed during the quarter ended December 31, 1994.
THE LOUISIANA LAND AND EXPLORATION COMPANY AND SUBSIDIARIES
Index to Exhibits
The following Exhibits have been filed with the Securities and Exchange Commission:
Exhibit 3(a) Certificate of Incorporation (Incorporated by reference to Exhibit 1-3(a) to the Registrant's Registration Statement No. 2-45541 on Form S-1.); Articles Supplementary pursuant to Section 3- 603(d)(4) of the Maryland General Corporation Law (Incorporated by reference to Exhibit 3(b) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1983 - Commission File No. 1-959.); Articles of Amendment of Charter dated May 30, 1985 (Incorporated by reference to Exhibit 3(b) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1985 - Commission File No. 1-959.); Articles of Amendment of Charter dated May 12, 1988 (Incorporated by reference to Exhibit 3(c) to the Registrant's Form 8 dated April 24, 1989 - Commission File No. 1-959.).
Exhibit 3(b) By-Laws (Incorporated by reference to Exhibit (1) to the Registrant's Current Report on Form 8-K dated October 1, 1989 - Commission File No. 1- 959.).
Exhibit 4(a) Rights Agreement dated as of May 25, 1986 among the Registrant and The Bank of New York (as Rights Agent) - (Incorporated by reference to Exhibit 4(a) to the Registrant's Current Report on Form 8-K dated May 25, 1986 - Commission File No. 1-959.).
Exhibit 4(b) Indenture dated as of June 15, 1992 among the Registrant and Texas Commerce Bank National Association (as Trustee) - (Incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement No. 33-50991 on Form S-3, as amended.).
Exhibit 10(a) Form of Termination Agreement with Senior Management Personnel (Incorporated by reference to Exhibit 10(b) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1982 - Commission File No. 1-959.).
(continued)
THE LOUISIANA LAND AND EXPLORATION COMPANY AND SUBSIDIARIES
Index to Exhibits
Exhibit 10(b) The Louisiana Land and Exploration Company 1982 Stock Option Plan as adopted (Incorporated by reference to Exhibit A to the Registrant's definitive Proxy Statement dated March 26, 1982.) and the amendment thereto dated December 8, 1982 (Incorporated by reference to Exhibit 10(c) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1982 - Commission File No. 1-959.).
Exhibit 10(c) The Louisiana Land and Exploration Company 1988 Long-Term Stock Incentive Plan as amended (Incorporated by reference to Exhibit A to the Registrant's definitive Proxy Statement dated March 22, 1993.).
Exhibit 10(d) Deferred Compensation Plan for Directors (Incorporated by reference to Exhibit 10(d) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1982 - Commission File No. 1-959.).
Exhibit 10(e) Pension Agreement dated December 27, 1994.
Exhibit 10(f) The Louisiana Land and Exploration Company 1990 Stock Option Plan for Non-Employee Directors as adopted (Incorporated by reference to Exhibit A to the Registrant's definitive Proxy Statement dated March 26, 1990.).
Exhibit 10(g) Form of The Louisiana Land and Exploration Company Deferred Compensation Arrangement for Selected Key Employees (Incorporated by reference to Exhibit 10(i) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1990 - Commission File No. 1-959.).
Exhibit 10(h) Retirement Plan for Directors of The Louisiana Land and Exploration Company dated March 1, 1987 (Incorporated by reference to Exhibit 10(j) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1990 - Commission File No. 1-959.).
(continued)
THE LOUISIANA LAND AND EXPLORATION COMPANY AND SUBSIDIARIES
Index to Exhibits
Exhibit 10(i) The LL&E Special Termination Benefit Plan (Incorporated by reference to Exhibit 10(j) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992 - Commission File No. 1-959.).
Exhibit 10(j) The LL&E Supplemental Excess Plan (Incorporated by reference to Exhibit 10(k) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992 - Commission File No. 1-959.).
Exhibit 10(k) Form of Compensatory Benefits Agreement (Incorporated by reference to Exhibit 10(l) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992 - Commission File No. 1-959.).
Exhibit 10(l) Amended and Restated Credit Agreement dated as of August 19, 1994 (the Credit Agreement) among the Registrant, the Banks listed therein, Morgan Guaranty Trust Company of New York, as Agent, and Texas Commerce Bank National Association and NationsBank of Texas, N.A., as Co-Agents.
Exhibit 10(m) Amendment No. 1 to the Credit Agreement dated as of January 23, 1995 among the Registrant, the Banks listed on the signature pages thereof and Morgan Guaranty Trust Company of New York, as Agent.
Exhibit 11 Computation of Primary and Fully Diluted Earnings (Loss) Per Share.
Exhibit 21 Subsidiaries of the Registrant.
Exhibit 23 Consent of Experts.
Exhibit 24 Powers of Attorney.
Exhibit 27 Financial Data Schedule.
Certain debt instruments have not been filed. The Company agrees to furnish a copy of such agreement(s) to the Commission upon request.
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.
THE LOUISIANA LAND AND EXPLORATION COMPANY (Registrant)
Date: March 9, 1995 By /s/ Frederick J. Plaeger, II __________________________________ Frederick J. Plaeger, II General Counsel and Corporate Secretary
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 and on the dates indicated.
Date: March 9, 1995 *H. Leighton Steward _____________________________________ H. Leighton Steward Director, Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)
Date: March 9, 1995 *Leland C. Adams _____________________________________ Leland C. Adams Director
Date: March 9, 1995 *Richard A. Bachmann _____________________________________ Richard A. Bachmann Director, Executive Vice President, Finance and Administration (Principal Financial Officer)
Date: March 9, 1995 *John F. Greene _____________________________________ John F. Greene Director, Executive Vice President, Exploration and Production
Date: March 9, 1995 *Eamon M. Kelly _____________________________________ Eamon M. Kelly Director
Date: March 9, 1995 *Kenneth W. Orce _____________________________________ Kenneth W. Orce Director
Date: March 9, 1995 *Victor A. Rice _____________________________________ Victor A. Rice Director
Date: March 9, 1995 *Orin R. Smith _____________________________________ Orin R. Smith Director
Date: March 9, 1995 *Arthur R. Taylor _____________________________________ Arthur R. Taylor Director
Date: March 9, 1995 *W. R. Timken, Jr. _____________________________________ W. R. Timken, Jr. Director
Date: March 9, 1995 *Carlisle A.H. Trost _____________________________________ Carlisle A.H. Trost Director
Date: March 9, 1995 *E. L. Williamson _____________________________________ E. L. Williamson Director
Date: March 9, 1995 *Jerry D. Carlisle _____________________________________ Jerry D. Carlisle Vice President and Controller (Principal Accounting Officer)
*/s/ Frederick J. Plaeger, II _________________________________________ Frederick J. Plaeger, II General Counsel and Corporate Secretary (As attorney-in-fact for each of the persons indicated)
________________________________________________________________ ________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549
__________________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
__________________________
THE LOUISIANA LAND AND EXPLORATION COMPANY (Exact name of registrant as specified in its charter)
EXHIBITS
________________________________________________________________ ________________________________________________________________
THE LOUISIANA LAND AND EXPLORATION COMPANY AND SUBSIDIARIES
Index to Exhibits (Item 14(a)(3))
The following Exhibits have been filed with the Securities and Exchange Commission:
Exhibit 3(a) Certificate of Incorporation (Incorporated by reference to Exhibit 1-3(a) to the Registrant's Registration Statement No. 2-45541 on Form S-1.); Articles Supplementary pursuant to Section 3- 603(d)(4) of the Maryland General Corporation Law (Incorporated by reference to Exhibit 3(b) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1983 - Commission File No. 1-959.); Articles of Amendment of Charter dated May 30, 1985 (Incorporated by reference to Exhibit 3(b) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1985 - Commission File No. 1-959.); Articles of Amendment of Charter dated May 12, 1988 (Incorporated by reference to Exhibit 3(c) to the Registrant's Form 8 dated April 24, 1989 - Commission File No. 1-959.).
Exhibit 3(b) By-Laws (Incorporated by reference to Exhibit (1) to the Registrant's Current Report on Form 8-K dated October 1, 1989 - Commission File No. 1- 959.).
Exhibit 4(a) Rights Agreement dated as of May 25, 1986 among the Registrant and The Bank of New York (as Rights Agent) - (Incorporated by reference to Exhibit 4(a) to the Registrant's Current Report on Form 8-K dated May 25, 1986 - Commission File No. 1-959.).
Exhibit 4(b) Indenture dated as of June 15, 1992 among the Registrant and Texas Commerce Bank National Association (as Trustee) - (Incorporated by reference to Exhibit 4.1 to the Registrant's Registration Statement No. 33-50991 on Form S-3, as amended.).
Exhibit 10(a) Form of Termination Agreement with Senior Management Personnel (Incorporated by reference to Exhibit 10(b) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1982 - Commission File No. 1-959.).
(continued)
THE LOUISIANA LAND AND EXPLORATION COMPANY AND SUBSIDIARIES
Index to Exhibits (continued) (Item 14(a)(3))
Exhibit 10(b) The Louisiana Land and Exploration Company 1982 Stock Option Plan as adopted (Incorporated by reference to Exhibit A to the Registrant's definitive Proxy Statement dated March 26, 1982.) and the amendment thereto dated December 8, 1982 (Incorporated by reference to Exhibit 10(c) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1982 - Commission File No. 1-959.).
Exhibit 10(c) The Louisiana Land and Exploration Company 1988 Long-Term Stock Incentive Plan as amended (Incorporated by reference to Exhibit A to the Registrant's definitive Proxy Statement dated March 22, 1993.).
Exhibit 10(d) Deferred Compensation Plan for Directors (Incorporated by reference to Exhibit 10(d) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1982 - Commission File No. 1-959.).
Exhibit 10(e) Pension Agreement dated December 27, 1994.
Exhibit 10(f) The Louisiana Land and Exploration Company 1990 Stock Option Plan for Non-Employee Directors as adopted (Incorporated by reference to Exhibit A to the Registrant's definitive Proxy Statement dated March 26, 1990.).
Exhibit 10(g) Form of The Louisiana Land and Exploration Company Deferred Compensation Arrangement for Selected Key Employees (Incorporated by reference to Exhibit 10(i) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1990 - Commission File No. 1-959.).
Exhibit 10(h) Retirement Plan for Directors of The Louisiana Land and Exploration Company dated March 1, 1987 (Incorporated by reference to Exhibit 10(j) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1990 - Commission File No. 1-959.).
(continued)
THE LOUISIANA LAND AND EXPLORATION COMPANY AND SUBSIDIARIES
Index to Exhibits (continued) (Item 14(a)(3))
Exhibit 10(i) The LL&E Special Termination Benefit Plan (Incorporated by reference to Exhibit 10(j) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992 - Commission File No. 1-959.).
Exhibit 10(j) The LL&E Supplemental Excess Plan (Incorporated by reference to Exhibit 10(k) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992 - Commission File No. 1-959.).
Exhibit 10(k) Form of Compensatory Benefits Agreement (Incorporated by reference to Exhibit 10(l) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992 - Commission File No. 1-959.).
Exhibit 10(l) Amended and Restated Credit Agreement dated as of August 19, 1994 (the Credit Agreement) among the Registrant, the Banks listed therein, Morgan Guaranty Trust Company of New York, as Agent, and Texas Commerce Bank National Association and NationsBank of Texas, N.A., as Co-Agents.
Exhibit 10(m) Amendment No. 1 to the Credit Agreement dated as of January 23, 1995 among the Registrant, the Banks listed on the signature pages thereof and Morgan Guaranty Trust Company of New York, as Agent.
Exhibit 11 Computation of Primary and Fully Diluted Earnings (Loss) Per Share.
Exhibit 21 Subsidiaries of the Registrant.
Exhibit 23 Consent of Experts.
Exhibit 24 Powers of Attorney.
Exhibit 27 Financial Data Schedule.
Certain debt instruments have not been filed. The Company agrees to furnish a copy of such agreement(s) to the Commission upon request.