Harbinger Group Inc.
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SEC Filings

HRG GROUP, INC. filed this Form 10-K on 12/29/1994
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  A comparison of average daily volumes of gas, measured in thousands of cubic
feet, gathered and processed during fiscal 1994 and 1993 is shown below.

                                                                    1994   1993
                                                                   ------ ------
      <S>                                                          <C>    <C>
      Gathering................................................... 45,500 14,382
      Processing.................................................. 22,200 10,063

  Marketing and Trading. Cimarron provides marketing services to natural gas
liquids processing plant owners and operators. The services include
transportation, fractionation, distribution, accounting, price forecasting and
sales of natural gas liquids for the account of such owners and operators.
Cimarron also actively markets natural gas liquids for its own account, with
volumes of approximately 28,000 barrels per day of natural gas liquids in the
Midwest and Gulf Coast markets.
  Successful results from Cimarron's marketing activities are dependent upon
the ability of Cimarron's marketers to perform an intermediary service for
sellers and buyers of natural gas liquids without exposing the Company to undue
financial risk through unanticipated price changes. Other marketing services
are carried out on a contract basis, with little financial risk to the Company.
  In addition, Cimarron maintains a fleet of approximately 128 leased and 3
owned railcars which transport feedstocks (butane, isobutane, gasoline, MTBE
and various aromatic mixtures) to refineries and petrochemical plants, and
Cimarron supplies wholesale propane in truckload quantities to propane
retailers and wholesalers.
  Competition. Cimarron's Smith County gathering system and processing plant,
which are operated by Cimarron's joint venture partner, face competition for
new well additions and additional gas processing from one nearby competing
system. However, the Company believes that Cimarron's processing plant has
superior liquid extraction capabilities. The gathering system and processing
plant in Oklahoma, which are operated by Cimarron, face competition for new
well additions and additional gas processing from several nearby competing
  Cimarron's marketing activities face significant competition. Cimarron's
competitors in its marketing efforts include other oil and gas production
companies, major interstate pipelines and their marketing affiliates, and
national and local gas gatherers, brokers, marketers and distributors of
varying sizes, financial resources and experience. Certain competitors, such as
major oil and gas production companies, have financial and other resources
substantially in excess of those available to Cimarron. Cimarron's marketing
activities are also affected by the actions of governmental regulatory
authorities such as the Federal Energy Regulatory Commission ("FERC"). Cimarron
is not, however, directly subject to regulation by the FERC. It is impossible
to predict how future regulatory actions will impact Cimarron's marketing
  The Company's principal oil and gas exploration and production activity is
the production of natural gas. The Company conducts oil and gas operations in
the United States and in Bolivia through its wholly-owned subsidiary, Zapata
Exploration Company ("Zapex"). In September 1994, Zapata announced that its
Board of Directors had determined that the Company should immediately undertake
efforts to sell its U.S. natural gas producing properties. The six properties
in the Gulf of Mexico, representing all of Zapata's domestic oil and gas
producing operations, may be sold individually or as a package depending upon
the interest expressed by prospective buyers. Zapata's Bolivian oil and gas
operations will not be impacted by this decision. Zapata's domestic natural gas
reserves have been declining for a number of years, as no exploratory efforts
have been undertaken to offset gas production. The Board's decision to sell the
properties is simply an acceleration of the liquidation of the gas reserves
currently occurring through production. Sales proceeds are estimated to equal
or exceed the net book value of the properties.

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