Harbinger Group Inc.
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SEC Filings

10-Q
HRG GROUP, INC. filed this Form 10-Q on 02/14/1995
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<PAGE>
 
NATURAL GAS COMPRESSION - In November 1993, Zapata purchased Energy Industries,
- -----------------------                                                        
Inc. ("Energy Industries") a participant in all segments of the natural gas
compression industry. Energy Industries operates one of the ten largest rental
fleets of natural gas compressor packages in the United States. Its compressor
fleet is located in Texas, Louisiana, Arkansas, Oklahoma and New Mexico, as well
as offshore in the Gulf of Mexico.

     Energy Industries primarily supplies natural gas compressor packages in
natural gas production and processing applications.  In natural gas production
applications, natural gas compression is used to increase the flow rate of gas
wells with low reservoir pressures.  In natural gas processing applications,
natural gas compression is used in the process of separating the various
hydrocarbon components of the wellhead natural gas stream.  In interstate
natural gas pipeline applications, natural gas compression is used to increase
the pressure of natural gas from reservoir levels to interstate pipeline
standards.  Energy Industries maintains an inventory of compressor and engine
components to support the fabrication, service and repair of natural gas
compressor packages.
 
     The major segments of Energy Industries' natural gas compression revenues
and operating results for the three months ended December 31, 1994 and the two
months ended December 31, 1993, in thousands, are identified below.

<TABLE> 
<CAPTION> 
                                    Revenues                Operating Results
                             --------------------         --------------------
                                 1995       1994            1995       1994
                             ----------  --------         --------------------
<S>                            <C>        <C>              <C>         <C>
Compressor Rental               $ 4,329   $ 2,914          $ 1,450     $   976
Fabrication and Sales             6,845     3,493              921         334
Parts & Service                   5,384     4,166            1,006         777
Other                             1,605     2,058              176          92
Selling & Administrative            ---       ---           (1,630)     (1,192)
                             ----------  ----------        -------  ----------
                                $18,163   $12,631          $ 1,923     $   987
                             ==========  ==========        =======  ==========
 
</TABLE>


     Natural gas compressor package rental utilization is affected primarily by
the number and age of producing oil and gas wells, the volume of natural gas
consumed and natural gas prices.  Rental rates are determined primarily by the
demand for compressor packages and vary by size and horsepower of a compressor
package. Energy Industries' utilization, rental rates and fleet size as of
December 31, 1994 and 1993 are compared in the following table.

<TABLE>
<CAPTION>
 
                                           December 31, 1994   December 31, 1993
                                           ------------------  ------------------
<S>                                        <C>                 <C>
         Fleet utilization:
- -----------------------------------------
             Horsepower                                 79.5%               76.8%
 
         Monthly rental rate, based on:
- -----------------------------------------
             Horsepower                             $  16.36            $  16.83
 
         Fleet size:
- -----------------------------------------
              Number of units                            711                 684
              Horsepower                             113,706             106,139
</TABLE>


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