Harbinger Group Inc.
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SEC Filings

HRG GROUP, INC. filed this Form 8-K on 11/13/1995
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  Revenues and operating results for fiscal 1994 and 1993 are presented in the
following table by major category, in thousands.

                                                 REVENUES         RESULTS
                                             ----------------- ---------------
                                               1994     1993    1994     1993
                                             -------- -------- -------  ------
      <S>                                    <C>      <C>      <C>      <C>
      Gathering and Processing.............. $ 22,867 $ 11,671 $   718  $  427
      NGL Marketing.........................  133,274  174,620     703   1,345
      Selling and Administrative............                    (2,484) (2,324)
                                             -------- -------- -------  ------
                                             $156,141 $186,291 $(1,063) $ (552)
                                             ======== ======== =======  ======

  For fiscal 1994, gathering and processing revenues increased as a result of
the expansion of the division's gathering and processing operations during
fiscal 1994 and 1993 while marketing revenues declined primarily due to the
Company's decision to reduce its natural gas trading activities. The gathering
and processing operations, however, incurred operating losses in the second and
third quarters of fiscal 1994 as processing margins were negatively impacted by
an uncharacteristic imbalance in the prices of natural gas and NGL. Subsequent
to the end of the third fiscal quarter, liquids prices increased resulting in
improved operating results from the gathering and processing operation.
  In fiscal 1993, Zapata's natural gas gathering, processing and marketing
division incurred an operating loss that was attributable to weak demand for
refinery feedstocks, a soft liquids trading market and a write-off of a liquids
trading receivable. Additionally, the division undertook a substantial business
development effort in 1993 as prospective acquisition candidates and expansion
opportunities were examined. These efforts resulted in increased administrative
  In fiscal 1994 and 1993, Cimarron significantly expanded its natural gas
gathering and processing activities through the acquisition and expansion of
natural gas gathering systems in West Texas and Oklahoma and a gas processing
plant in Sutton County, Texas. 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

 Oil and Gas Operations
  Reflecting the $29.2 million property valuation provision, as well as lower
prices for U.S. natural gas and lower U.S. natural gas production, revenues of
$12.6 million and an operating loss of $28.3 million for fiscal 1994 compared
unfavorably to the fiscal 1993 revenues of $20.2 million and operating income
of $6.0 million. The valuation provision was the result of several factors:
lower natural gas prices, additional capitalized costs incurred recently in
connection with several workover wells at the Company's Wisdom gas field and an
increase in estimated future costs.
  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 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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