ITEM 3. LEGAL PROCEEDINGS
On November 2, 1994, a putative class action was filed in Delaware Chancery Court. In that case, entitled Miller v. Cody, the plaintiff has alleged that certain named former directors of Plains and Plains have, among other things, breached their fiduciary duties and otherwise acted to entrench themselves in office. Plaintiff seeks various forms of injunctive relief, damages and an award of plaintiff's costs and disbursements.
On May 3, 1995, the same day Plains announced it had executed a merger agreement with the Company, a putative class action, entitled Crandon Capital Partners v. Miller, was filed in Delaware Chancery Court against Plains and the then-current members of its Board of Directors. In this suit, it is alleged that, among other things, the agreement was inadequate, plaintiff seeks various forms of declaratory and injunctive relief, damages and an award of plaintiff's costs and disbursements.
Plains and its former directors have received a status report filed by plaintiffs' counsel in both cases indicating a "stipulation of dismissal without prejudice will be circulated shortly."
Except as noted above, at December 31, 1995, the Company was a party to certain other legal proceedings which have arisen out of the ordinary course of business. Based on the facts currently available, in management's opinion the liability, individually or in the aggregate, if any, to the Company resulting from such actions will not have a material adverse effect on the Company's consolidated financial position or results of operations.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's security holders during the fourth quarter of the year ended December 31, 1995.
PART II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDERS MATTERS.
(a) Market Information. Beginning on November 29, 1994, the Company's Common Stock was listed and began trading on the New York Stock Exchange under the symbol BRR. Before trading on the New York Stock Exchange, the Company's Common Stock was traded on NASDAQ National Market System under the symbol BARC. The range of high and low sales prices for each quarterly period during the two most recent years, as reported by the New York Stock Exchange, is as follows:
- -------- * As reported by NASDAQ, before the Company's Common Stock began trading on the NYSE.
On March 12, 1996, the closing price for the Company's Common Stock was $22.625 per share.
(b) Holders. The approximate number of record holders of the Company's Common Stock as of March 12, 1996, was 4,956.
(c) Dividends. The Company has not paid any cash dividends since its inception. The Company's credit agreement restricts payment of dividends to amounts that are less than 50 percent of net income. The Company anticipates that all earnings will be retained for the development of its business and that no cash dividends on its Common Stock will be declared in the foreseeable future.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth certain selected financial data of the Company for each of the last five years ended December 31:
ITEM 7.

ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
On July 18, 1995, the Company consummated the merger of a wholly owned subsidiary of the Company with Plains Petroleum Company ("Plains") by issuing 12.8 million shares of its common stock to the former Plains stockholders. As a result of this merger, Plains became a wholly owned subsidiary of the Company. Also, on July 18, 1995, the Company changed its fiscal year end from September 30 to December 31 effective January 1, 1995. The merger is being accounted for using the pooling of interests method. The pooling of interests method combines previously reported results as though the combination occurred at the beginning of the periods being presented. Merger costs have been expensed during the 1995 year. The financial statements of the Company and Plains for the 1993, 1994 and 1995 years have been restated and adjusted for the merger with Plains and the change in fiscal year end. Due to this restatement, these financial statements are not comparable to the financial statements for the same periods as previously presented by the separate companies.
Liquidity and Capital Resources
At December 31, 1995, the Company had cash and short-term investments of $7.5 million, working capital of $3.7 million, property and equipment of $300.7 million and total assets of $340.4 million. Compared to December 31, 1994, cash and short-term investments decreased $4.8 million, working capital increased $1.2 million and property and equipment increased $39.2 million. Total assets increased $29.5 million as the increase in property and equipment was funded by a $36.0 million increase in long-term debt. During 1995, the Company actively invested in oil and gas properties in its areas of activity, which increased both property and equipment and long-term debt.
During 1995, the Company generated operating cash flow of $33.4 million before working capital changes, which is $5.6 million less than the amount generated in 1994, as production increases were offset by merger costs incurred during the year. After working capital changes, cash flow provided by operations was $35.5 million, a decrease of three percent from 1994. Excluding merger costs, cash flow from operations before working capital changes was $47.6 million, ($49.7 million after working capital changes).
As of December 31, 1995, the outstanding balance under the bank line of credit was $89 million, a net increase of $36 million from the balance at December 31, 1994. In July 1995, the Company entered into a $200 million credit agreement. The line of credit matures on July 19, 1999 and is funded by a consortium of six banks. The line of credit is unsecured and provides for interest rates based on LIBOR or prime rates at the Company's option. The availability under the Credit Agreement is based on the bank's review of the collateral value of the Company's oil and gas properties. The current borrowing base is $160 million determined from a review of the oil and gas reserves as of December 31, 1994 for Plains and March 31, 1995 for Barrett. The borrowing base is scheduled for a review in early 1996 based on the Company's December 31, 1995 reserves.
During the year, the Company invested $72.3 million in property and equipment principally in the Piceance, Wind River and Arkoma Basins. The Company's drilling activities were primarily to develop and extend producing fields. Included in oil and gas property additions is $7.4 million to purchase interests in proved properties to acquire 4.0 Bcf of gas and 831,000 barrels of oil.
During 1995, the Company increased its gas reserves by 12 percent to 514 Bcf and its oil reserves by 13 percent to 13.0 million barrels. The Company replaced 210 percent of its 1995 production. On an energy equivalent basis, the Company's reserves are 87 percent natural gas. Proved undeveloped reserves are 17 percent of the Company's total reserves, virtually unchanged from December 31, 1994. Thirty-four percent of the Company's reserves are located in the Hugoton Embayment, 20 percent are located in the Piceance Basin, and 15 percent are located in the Wind River Basin.
Reserve quantities increased 12 percent on an energy equivalent basis over the last year, while the standardized measure of discounted future net cash flows increased $67.3 million, 28 percent, primarily due to reserve additions and an increase in the sales price of oil and gas. As of December 31, 1995, the Company was receiving an average of $17.35 per barrel for its oil production and $1.77 per Mcf for its gas production. Reserve extensions and discoveries added $85.5 million to the standardized measure, and purchases of proved reserves added $7.4 million to the valuation. In addition the change in sales prices and production costs increased the standardized measure of discounted future net cash flows by $24.6 million. These additions were offset by a $62.3 million reduction due to reserves produced during the year and $33.2 million for additional income taxes being deducted in the computation. The Company's reserve values remain sensitive to gas prices in the current volatile commodities market.
The Company uses gas price swaps to hedge the sales price of its oil and natural gas. In a typical swap agreement, the Company and a counter party will enter into an agreement whereby one party will pay a fixed price and the other will pay an index price on a specified volume of production during a specified period of time. Settlement is made by the parties for the difference between the two prices approximately the same time as the physical transactions. The intent of hedging activities is to reduce the volatility associated with the sales price of oil and gas production.
As of December 31, 1995 the Company held positions to hedge 16.9 Bcf of gas and 91,000 barrels of oil for periods through March 31, 1996. Of these positions, 834,000 Mcf of gas were being hedged to reduce risks associated with gas trading activities, and the balance was associated with producing activities. These positions include various hedging instruments based on exchange based sales prices, index denominated prices or a combination of both. The positions are more fully described in the notes to the financial statements. During December 1995 the gas commodities market used as a basis for the Company's hedging activities became unusually volatile causing significant differences between the underlying commodity price and the market price of the Company's gas production in certain basins. As a result, the Company recorded an expense of $1.2 million in the fourth quarter due to the lack of correlation between the hedging instrument and the sales price of underlying natural gas.
The Company's merger with Plains and its drilling activities have increased its reserve base and its productive capacity and, therefore, its potential cash flow. Continued low gas prices may adversely affect cash flow. The Company intends to continue to acquire and develop oil and gas properties in its areas of activity as dictated by market conditions and financial ability. The Company retains flexibility to participate in oil and gas activities at a level that is supported by its cash flow and financial ability. Management believes that the Company's borrowing capacities and cash flow are sufficient to fund its currently anticipated activities. The Company intends to continue to use financial leverage to fund its operations as investment opportunities become available on terms that management believe warrant investment of the Company's capital resources.
Results of Operations
1995 VS. 1994
During 1995, the Company incurred a net loss of $2.2 million ($.09 per share) compared to net income of $11.3 million ($.46 per share) in 1994. The 1995 results include merger and reorganization costs of $14.2 million. Excluding the merger costs, the Company's net income after taxes would be $9.5 million ($.38 per share).
Revenues increased 17 percent from 1994 to $128.0 million and operating expenses, including $14.2 million of merger and reorganization costs, increased 38 percent to $128.4 million. Oil and gas production revenue increased 23 percent to $97.0 million. Lease operating expenses increased $6.3 million and depreciation, depletion and amortization increased $10.7 million.
Production revenues increased $18.2 million primarily due to a 43 percent increase in gas production to 47.7 Bcf (130,700 Mcf per day). Oil production increased 32 percent to 1,702,000 barrels (4,660 barrels per day). Average gas sales prices decreased 20 percent to $1.47 per Mcf, while average oil prices increased 13 percent to $15.76 per barrel. Gas production accounted for 82 percent of total production on an energy equivalent basis. The Hugoton Embayment and Piceance Basin properties accounted for 37 and 14 percent, respectively, of total gas production. The Powder River and Permian Basins accounted for 43 and 32 percent, respectively, of total oil production. The decreased gas sales price was due to an overall deterioration in gas markets during most of the year.
Lease operating expenses of $34.5 million averaged $.60 per Mcfe ($3.58 per BOE) of production compared to $.69 per Mcfe ($4.13 per BOE) in 1994. Depreciation, depletion and amortization increased $10.7 million primarily due to production increases. During 1995, depreciation, depletion and amortization on oil and gas production was provided at an average rate of $.55 per Mcfe ($3.28 per BOE) compared to an average rate of $.52 per Mcfe ($3.14 per BOE) in 1994.
The gross margin on trading activities was virtually unchanged from 1994 at $943,000. Gas trading volumes increased 26 percent to 22.2 Bcf in 1995.
During 1995, the Company hedged 4.9 Bcf (22 percent) of its gas trading volumes to achieve the margins on specific transactions at a cost of $2.1 million. In addition, the Company hedged 11.0 Bcf (23 percent) of gas production for a net gain of $417,000. The hedging gain related to production is net of $1.2 million for an expense recorded in the fourth quarter due to a lack of correlation of the hedging instruments to the underlying commodity as of December 31, 1995. The Company enters into the hedging arrangements to minimize its exposure to price risks associated with commodities markets. Although hedging transactions associated with its production minimize the Company's exposure to losses as a result of unfavorable price changes, the transactions also limit the Company's ability to benefit from favorable price changes. At the end of December, 1995, the basis differential between the commodities markets and the market price of the Company's gas widened to historic levels. Because the increase in the commodities price was not accompanied by a similar increase in the market price of the Company's gas, the Company recorded an expense for the difference due to the inefficient hedge and positions that did not qualify for hedge accounting treatment. With respect to trading activities, the Company will not generally enter into a commitment for either a purchase or a sale unless (i) it has established a commitment for an offsetting sale or purchase, or (ii) it has established a hedge arrangement with a counter party that creates the same matching position.
General and administrative expenses of $13.4 million are one percent greater than the previous year. The 1995 amount is net of $3.8 million of operating fee recoveries compared to a $3.4 million recovery in 1994. General and administrative expense in 1995 is generally a combination of the separate companies' expenses, since the integration of the two entities did not occur until late in the year, and included costs for the Company to expand its business in existing and new activity areas. The Company expects a reduction in general and administrative expenses due to the elimination of duplicative costs throughout 1996. Interest expense increased
significantly from $942,000 in 1994 to $4.6 million in 1995 as the Company financed a portion of its growth with bank debt. The Company incurred a 1995 expense of $14.2 million to combine Barrett and Plains and to integrate the separate company's operations. The costs consist primarily of $7.4 million of investment banker and other professional fees to evaluate and consummate the merger and $5.6 million for employee termination and benefit costs.
During 1995, the Company recorded a $1.8 million income tax expense even though it incurred a loss before taxes due to non-deductible merger costs. Excluding non-deductible merger costs, the Company would have had a $600,000 tax benefit.
The Company's results of operations depend primarily on the production of natural gas which accounted for 87 percent of the Company's reserves and 82 percent of its production during 1995. Therefore, the Company's future results will depend on both the volume of natural gas production and the sales price for gas. The Company continues to explore for oil and gas to increase its production. The lack of predictability of both production volumes and sales prices may influence future operating results.
1994 VS. 1993
During 1994, the Company earned net income of $11.3 million ($.46 per share) compared to net income of $13.7 million ($.55 per share) in 1993. The 1994 results include a tax benefit of $2.1 million due to an increase in financial reporting value of the Company's net operating loss carryover. Without the tax benefit from the net operating loss carryover, the Company's net income after taxes in 1994 would have been $9.2 million ($.37 per share). The 1993 results include a tax benefit of $1.4 million from the value of the tax loss carryover and an expense of $656,000 for the cumulative effect of adopting SFAS No. 106 to recognize accumulated post retirement benefit liabilities as of January 1, 1993. Net income before income taxes and the cumulative effect of the change in accounting method was $16.4 million in 1994 compared to $21.0 million in 1993.
Revenues increased three percent from 1993 to $109.5 million, and operating expenses increased nine percent to $93.0 million. Production revenue decreased $2.1 million, and trading revenues increased $5.2 million. These changes were offset by a decrease of $2.1 million in lease operating expenses, an increase of $2.6 million in depreciation, depletion and amortization and an increase of $5.5 million in the cost of trading.
Production revenues decreased $2.1 million as a five percent increase in gas production was offset by a six percent decrease in the average gas sales price and a seven percent decline in the average oil sales price. Oil production was virtually unchanged from 1993 to 1994. During 1994, the Company produced 91,200 Mcf of gas per day and 3,540 barrels of oil per day. Gas production accounted for 81 percent of total production on an energy equivalent basis of 41.0 Bcf of gas equivalent (6.8 million barrels of oil equivalent). During 1994, the average gas sales price was $1.83 per Mcf ($1.94 in 1993) and the oil sales price was $13.95 per barrel ($14.94 in 1993). The decreased oil and gas sales prices were due to an overall market reduction in the commodity prices of the products.
Lease operating expenses of $28.2 million averaged $.69 per Mcfe ($4.13 per BOE) of production compared with $.77 per Mcfe ($4.62 per BOE) in 1993. Depreciation, depletion and amortization increased $2.6 million primarily due to production increases. During 1994, depreciation, depletion and amortization on oil and gas production was provided at an average rate of $.52 per Mcfe ($3.14 per BOE) compared to an average rate of $.48 per Mcfe ($2.87 per BOE) in 1993.
The gross margin on trading activities decreased to $924,000 from $1.3 million in 1993. Gas trading volumes increased 62 percent to 17.5 Bcf in 1994. The reduced results are due to a reduction of margins available for gas trading activities.
General and administrative expenses of $13.3 million are 18 percent greater than the previous year. The 1994 amount is net of $3.4 million of operating fee recoveries compared to a $3.8 million recovery in 1993. The
increased general and administrative expense is due to additional costs incurred by the Company to expand its activities and to explore in other areas.
During 1994, the Company recorded a $5.1 million net income tax expense compared to a $6.7 net income tax expense in 1993. The 1994 expense is net of a $2.1 million reduction in the valuation allowance provided for the deferred income tax benefit of the net operating loss carryover. The valuation allowance was reduced to reflect increased oil and gas reserves that are expected to generate future taxable income and the tax gain realized on the sale of the Wattenberg properties.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
The Consolidated Financial Statements and schedules that constitute Item 8 are attached at the end of this Annual Report on Form 10-K. An index to these Consolidated Financial Statements and Schedules is also included in Item 14(a) of this Annual Report on Form 10-K.
ITEM 9.

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

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information with respect to the directors and executive officers of the Company, including, with respect to each individual, his age, his position with the Company, the expiration of his term as a director, and the year in which he first became a director of the Company. Additional information concerning each of these individuals follows the table:
- -------- (1) Member of the Audit Committee of the Board of Directors. (2) Member of the Compensation Committee of the Board of Directors. (3) Mr. Barrett and Mr. Keller are brothers-in-law. (4) Mr. Fitzgibbons served as a Director of the Company from July 1987 until October 1992. He was re-elected to the Board of Directors in January 1994. (5) All officers are elected annually at the first Board Of Directors' meeting following the annual meeting of stockholders. (6) One transaction in July 1995, required to be reported by Mr. Buford on a Statement Of Change In Beneficial Ownership Of Securities on Form 4, was reported late with the Securities and Exchange Commission ("SEC") on a Form 5, Annual Statement Of Changes In Beneficial Ownership. (7) A Statement Of Changes In Beneficial Ownership Of Securities on Form 4 with respect to one transaction by Mr. Schreiber in November 1995 was filed two days late with the SEC. (8) Mr. Wallace resigned as Vice Chairman and as a member of the Board of Directors of the Company effective January 11, 1996. (9) Joseph P. Barrett is the son of William J. Barrett. (10) One transaction in October 1995, required to be reported by Mr. Stevens on a Statement Of Changes In Beneficial Ownership Of Securities on Form 4, was reported late with the SEC on a Form 5, Annual Statement Of Changes In Beneficial Ownership.
William J. Barrett has been Chief Executive Officer since December 1983 and Chairman of the Board of Directors of the Company since March 1994. Mr. Barrett was President of the Company from December 1983 through September 1994. Mr. Barrett has been the Chairman of the Board, Chief Executive Officer, and a director of Plains since it became a wholly owned subsidiary of the Company as the result of a merger in July 1995. Mr. Barrett has also been a director of Barrett Fuels Corporation, a wholly owned subsidiary of the Company, since its formation in September 1990. From January 1979 to February 1982, Mr. Barrett was an independent oil and gas operator in the western United States in association with Aeon Energy, a partnership composed of four sole proprietorships. From 1971 to 1978, Mr. Barrett served as Vice President--Exploration and a director of Rainbow Resources, Inc., a publicly held independent oil and gas exploration company that merged with a subsidiary of the Williams Companies in 1978. Mr. Barrett served as President, Exploration Manager and Director for B&C Exploration from 1969 until 1971 and was a chief geologist for Wolf Exploration Company, now known as Inexco Oil Co., from 1967 to 1969. He was an exploration geologist with Pan-American Petroleum Corporation from 1963 to 1966 and worked as an exploration geologist, a petroleum geologist and a stratigrapher for El Paso Natural Gas Co. at various times from 1958 to 1963. Mr. Barrett received a B.S. Degree in Geology and an M.S. Degree in Geology from Kansas State University in 1956 and 1957, respectively.
C. Robert Buford has been a director of the Company since December 1983 and served as Chairman of the Board of Directors from December 1983 through March 1994. Mr. Buford has been President, Chairman of the Board and controlling shareholder of Zenith Drilling Corporation ("Zenith"), Wichita, Kansas, since February 1966. Zenith is engaged in the oil and gas business and owns approximately three percent of the Company's Common Stock. Since 1993, Mr. Buford has served as a director of Encore Energy, Inc., a wholly owned subsidiary of Zenith engaged in the marketing of natural gas. Mr. Buford is also a member of the Board Of Directors of First Bancorp of Wichita, Kansas, a bank holding company, and Lonestar Steakhouse & Saloon, Inc., a restaurant company headquartered in Wichita, Kansas. He received a B.A. Degree in Business Administration from Oklahoma State University in 1955.
Derrill Cody has been a director of the Company since July 1995. Mr. Cody was a director of Plains from May 1990 through July 1995. Since January 1990, Mr. Cody has been an attorney in private practice in Oklahoma City, Oklahoma. From 1986 to 1990, he was Executive Vice President of Texas Eastern Corporation, and from 1987 to 1990 he was the Chief Executive Officer of Texas Eastern Pipeline Company. He has been a director of the General partner of TEPPCO Partners, L.P. since January 1990. Mr. Cody received a B.A. Degree in History from East Central State College in 1960 and an L.L.B. from the University of Oklahoma in 1964.
James M. Fitzgibbons has been a director of the Company since January 1994, and previously served as a director of the Company from July 1987 until October 1992. Since October 1990, Mr. Fitzgibbons has been Chairman and Chief Executive Officer of Fieldcrest Cannon, Inc., a manufacturer of home furnishing textiles. From January 1986 until October 1990, Mr. Fitzgibbons was President of Amoskeag Company in Boston, Massachusetts. Prior to 1986, he was President of Howes Leather Company, a producer of leather. Mr. Fitzgibbons is also member of the Board Of Directors of Lumber Insurance Company, American Textile Manufacturers Institute and a Trustee of Laurel Funds, a series of mutual funds. Mr. Fitzgibbons received an A.B. Degree from Harvard College in 1956.
Hennie L.J.M. Gieskes has been a director of the Company since November 1985. Mr. Gieskes is the Managing Director of Spaarne Compagnie N.V., a Netherlands company engaged in the investment business. From before 1976 until December 1990, Mr. Gieskes was a Managing Director of Vitol Beheer B.V. ("Vitol"), a Netherlands trading company engaged primarily in energy-related commodities. Mr. Gieskes received a law degree from the University of Amsterdam, The Netherlands, in 1968.
William W. Grant, III has been a director of the Company since July 1995. Mr. Grant was a director of Plains from May 1987 through July 1995. He has been an advisory director of Colorado National Bankshares, Inc. and Colorado National Bank since 1993. He was a director of Colorado National Bankshares, Inc. from 1982 to 1993 and the Chairman of the Board of Colorado National Bank from 1986 to 1993. He served as the Chairman of the Board of Colorado Capital Advisors from 1989 through 1994. Mr. Grant received a B.A. Degree in English from Yale University in 1954 and attended the Harvard University Graduate School of Business' Advanced Management Program from 1970 to 1971.
J. Frank Keller has been Chief Financial Officer since July 1995 and an Executive Vice President, the Secretary and a director of the Company since December 1983. Mr. Keller has been the Chief Financial Officer, an Executive Vice President, the Secretary, and a director of Plains, a wholly owned subsidiary, since July 1995. He also has been the President and a director of Barrett Fuels Corporation since its formation in September 1990. Mr. Keller was an Executive Vice President of the Company from December 1983 through September 1995. Mr. Keller was the President and a co-founder of Myriam Corp., an architectural design and real estate development firm beginning in 1976, until it was reorganized as Barrett Energy in February 1982. Mr. Keller graduated from Kansas State University in 1967 with a B.S. Degree and received an M.B.A. Degree from Colorado State University in 1992.
Paul M. Rady has been President, Chief Operating Officer, and a director of the Company since September 1994. Prior to that time Mr. Rady served as Executive Vice President--Exploration of the Company beginning February 1993. Mr. Rady has been the President, Chief Operating Officer, and a director of Plains, a wholly owned subsidiary, since July 1995. From August 1990 until July 1992, Mr. Rady served as Chief Geologist for the Company, and from July 1992 until January 1993 he served as Exploration Manager for the Company. From July 1980 until August 1990, Mr. Rady served in various positions with the Denver, Colorado regional office of Amoco Production Company, the exploration and production subsidiary of Amoco Corporation. Mr. Rady was a Geologist and Geophysicist for Amoco Production Company. While with Amoco Production Company, Mr. Rady's areas of responsibility included the Rocky Mountain Basins, Utah-Wyoming Overthrust Belt, offshore Alaska, Oklahoma, particularly with respect to the Arkoma Basin, and the New Ventures Group, which concentrated on the western United States. Mr. Rady received a B.A. Degree in Geology in 1978 from Western State College of Colorado in Gunnison, Colorado, and an M.S. Degree in Geology in 1980 from Western Washington University in Bellingham, Washington.
A. Ralph Reed has been an Executive Vice President of the Company since November 1989 and a director of the Company since September 1990. Mr. Reed has served as Executive Vice President--Operations and a director of Plains, a wholly owned subsidiary, since July 1995. From 1986 to 1989, Mr. Reed was an independent oil and gas operator in the Mid-Continent region of the United States, including the period from January 1988 to November 1989 when he acted as a consultant to Zenith Drilling Corporation. From 1982 to 1986, Mr. Reed was President and Chief Executive Officer of Cotton Petroleum Corporation, a wholly owned exploration and
production subsidiary of United Energy Resources, Inc. Prior to joining Cotton Petroleum Corporation in 1980, Mr. Reed was employed by Amoco Production Company from 1962, holding various positions including Manager of International Production, Division Production Manager and Division Engineer. Mr. Reed received a B.S. Degree in Petroleum Engineering from the University of Oklahoma in 1959 and in 1975 attended the Executive School at the University of Virginia.
James T. Rodgers has been a director of the Company since October 1993. Mr. Rodgers served as the President, Chief Operating Officer and a director of Anadarko Petroleum Corporation ("Anadarko") from 1986 through 1992. Anadarko is a Houston-based oil and gas exploration and production company. Prior to 1986, Mr. Rodgers was employed in other capacities by Anadarko and Amoco Production Company. Mr. Rodgers taught Petroleum Engineering at the University of Texas in Austin in 1958 and at Texas Tech University in Lubbock from 1958 to 1961. Mr. Rodgers currently serves as a Director of Louis Dreyfus Natural Gas Corporation and as an Advisory Director for Texas Commerce Bank in Houston. Mr. Rodgers received a B.S. Degree from Louisiana State University in 1956 and an M.S. Degree from the University of Texas in 1958.
Philippe S.E. Schreiber has been a director of the Company since November 1985. Mr. Schreiber is an independent lawyer and business consultant who also is of counsel to the law firm of Walter, Conston, Alexander & Green, P.C. in New York, New York. Mr. Schreiber has been affiliated with that law firm as counsel or partner since August 1985. From 1988 to mid-1992, he also was the Chairman of the Board and a principal shareholder of HSE, Inc., d/b/a Manhattan Kids Limited, a privately owned corporation involved in catalogue sales of American made children's clothing in Europe. From October 1985 through June 1992, Mr. Schreiber served as a director, and from July 1990 until June 1991 as Managing Director, of Owl Creek Investments Plc, a publicly traded English oil and gas company. Mr. Schreiber received an A.B. Degree from Columbia College in 1964 and a J.D. Degree from Columbia University School of Law in 1967.
Harry S. Welch has been a director of the Company since July 1995. Mr. Welch was a director of Plains from May 1986 to July 1995. Since August 1989, he has been an attorney in private practice in Houston, Texas. He served as Vice President and General Counsel of Texas Eastern Corporation from 1988 to July 1989. Mr. Welch received a B.B.A. Degree and an L.L.B. Degree from the University of Texas in 1947 and 1949, respectively.
Joseph P. Barrett has been a Vice President since March 1995 and has been with the Company since it began in 1982. Mr. Barrett has served as Vice President--Land and a director of Plains, a wholly owned subsidiary, since July 1995. He is a 1977 graduate of the University of Colorado where he earned a Bachelor's Degree in Business and Mineral Land Management, and a 1982 graduate of Washburn University Law School where he earned his law degree.
Robert W. Howard has been Senior Vice President of the Company since March 1992. Mr. Howard has served as Senior Vice President and a director of Plains, a wholly owned subsidiary, since July 1995. Mr. Howard served as the Executive Vice President--Finance from December 1989 until March 1992 and served as Vice President--Finance of the Company from December 1983 until December 1989. Mr. Howard has been the Treasurer of the Company since March 1986. During 1982, Mr. Howard was a Manager/Accountant with Weiss & Co., a certified public accounting firm. Mr. Howard received a B.B.A. Degree from the University of Wisconsin, Eau Claire, in 1976.
Eugene A. Lang, Jr. has been Senior Vice President--General Counsel of the Company since September 1995. Mr. Lang served as a Senior Vice President, General Counsel and Secretary of Plains from May 1994 to July 1995, and from October 1990 to May 1994 he served as Vice President, General Counsel and Secretary of Plains. From 1986 to 1990 he was an associate with the Houston, Texas law firm of Vinson & Elkins. From 1984 to 1986, he was General Attorney and Assistant Secretary of K N Energy, Inc. From 1978 to 1984, he was an attorney for K N Energy, Inc.
Donald H. Stevens has been the Vice President--Corporate Relations and Capital Markets for the Company since August 1992. From July 1989 until August 1992, Mr. Stevens served as Manager of Corporate and Tax Planning for Kennecott Corporation, a mining company. From May 1986 until September 1989, Mr. Stevens served as Corporate Planning Analyst in Corporate Acquisition and Divestitures for BP America, Inc., formerly The Standard Oil Company. Prior to May 1986, Mr. Stevens served in various finance, tax and analyst positions with Seco Energy Corporation and Gulf Oil Corporation, both of which are oil and gas companies. Mr. Stevens received his B.S. Degree in Finance/Accounting from the University of Wyoming in 1975.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth, in summary form, the compensation received during each of the Company's last three completed years by the Chief Executive Officer of the Company and by the four other most highly compensated executive officers whose compensation exceeded $100,000 during the year ended December 31, 1995. Beginning with the year ended December 31, 1995, the Company changed its fiscal year end from September 30 to December 31. The figures in the following table are for each of the one year periods ended December 31, 1995, 1994, and 1993:
SUMMARY COMPENSATION TABLE
- -------- (1) The dollar value of base salary (cash and non-cash) earned during the year indicated. (2) The dollar value of bonus (cash and non-cash) earned during the year indicated. (3) During the period covered by the Table, the Company did not pay any other annual compensation not properly categorized as salary or bonus, including perquisites and other personal benefits, securities or property. (4) During the period covered by the Table, the Company did not make any award of restricted stock, including share units. (5) The sum of the number of shares of Common Stock to be received upon the exercise of all stock options granted. The 1994 Stock Option Plan was approved by the Board Of Directors effective April 1, 1994 and was approved by stockholders at the March 16, 1995 Annual Meeting. At the March 5, 1996 meeting of the Board Of Directors, the Board approved, subject to stockholder approval, an amendment to the 1994 Plan to increase from 400,000 to 1,000,000 the number of shares subject to the 1994 Plan. See below "Option Grants Table".
(6) Except for stock option plans, the Company does not have in effect any plan that is intended to serve as incentive for performance to occur over a period longer than one fiscal year. (7) All other compensation received that the Company could not properly report in any other column of the Table including annual Company contributions or other allocations to vested and unvested defined contribution plans, and the dollar value of any insurance premiums paid by, or on behalf of, the Company with respect to term life insurance for the benefit of the named executive officer, and the full dollar of the remainder of the premiums paid by, or on behalf of, the Company. Effective in November 1993, the Company obtained directors and officers insurance. Coverage of the named officers under this policy may be considered compensation for the named officers, although it has not been included in the table. (8) Mr. Wallace's compensation was paid by Plains during the period from October 3, 1994 (when he first became an executive officer of Plains) through July 18, 1995 when Plains merged with and into the Company. Mr. Wallace resigned as an officer and director of the Company effective January 11, 1996 and as an employee of the Company effective as of March 6, 1996. (9) Consists of options to purchase 76,185 shares of Common Stock of Plains that became options to purchase 99,030 shares of Common Stock of the Company upon the merger of Plains with and into a subsidiary of the Company on July 18, 1995.
Option Grants Table
No grants of stock options were made during the fiscal year ended December 31, 1995 to the Company's Chief Executive Officer or the four other most highly compensated executive officers of the Company whose compensation exceeded $100,000 during the year ended December 31, 1995.
Aggregated Option Exercises And Fiscal Year-End Option Value Table
The following table sets forth information concerning each exercise of stock options during the year ended December 31, 1995 by the Company's Chief Executive Officer and the four other most highly compensated executive officers of the Company whose compensation exceeded $100,000 during the year ended December 31, 1995, and the year-end value of unexercised options held by these persons:
AGGREGATED OPTION EXERCISES FOR YEAR ENDED DECEMBER 31, 1995 AND YEAR-END OPTION/SAR VALUES
- -------- (1) The number of shares received upon exercise of options during the year ended December 31, 1995. (2) With respect to options exercised during the Company's year ended December 31, 1995, the dollar value of the difference between the option exercise price and the market value of the option shares purchased on the date of the exercise of the options. (3) The total number of unexercised options held as of December 31, 1995, separated between those options that were exercisable and those options that were not exercisable. (4) For all unexercised options held as of December 31, 1995, the aggregate dollar value of the excess of the market value of the stock underlying those options over the exercise price of those unexercised options. These values are shown separately for those options that were exercisable, and those options that were not yet exercisable, on December 31, 1995. As required, the price used to calculate these figures was the closing sale price of the Common Stock at year-end. On December 29, 1995, the last day of trading for the year, the closing sale price of the Common Stock was $29.375 per share. On March 12, 1996, the closing sale price was $22.625 per share.
Employee Retirement Plans, Long-Term Incentive Plans, And Pension Plans
The Company has an employee retirement plan (the "401(k) Plan") that qualifies under Section 401(k) of the Internal Revenue Code Of 1986, as amended. Employees of the Company are entitled to contribute to the 401(k) Plan up to 15 percent of their respective salaries. For each pay period through March 31, 1996, the Company will contribute, on behalf of each employee, 50 percent of the contribution made by that employee, up to a maximum contribution by the Company of three percent of that employee's gross salary for that pay period. Effective April 1, 1996, the Company's matching contribution will be increased to 100 percent of each participating employee's contribution, up to a maximum of six percent of base salary, with one-half of the match paid in cash and one-half of the match paid in the Company's Common Stock. Benefits payable to employees upon retirement are based on the contributions made by the employee under the 401(k) Plan, the Company's matching contributions, and the performance of the 401(k) Plan's investments. Therefore, the Company cannot estimate the annual benefits that will be payable to participants in the 401(k) Plan upon retirement at normal retirement age.
Excluding the Company's stock option plans, the Company has no long-term incentive plan to serve as incentive for performance to occur over a period longer than one fiscal year.
Excluding the 401(k) Plan, the Company has no defined benefit or actuarial or pension plans or other retirement plans.
Compensation of Directors
Standard Arrangements. Pursuant to the Company's standard arrangement for compensating directors of the Company, no compensation for serving as a director is paid to directors who are not also employees of the Company, and those directors who are not also employees of the Company ("Outside Directors") receive an annual retainer of $20,000 paid in equal quarterly installments. In addition, for each meeting attended, each Outside Director receives a $750 meeting attendance fee, and will have options to purchase 500 shares of the Common Stock become exercisable. Although these options become exercisable only at the rate of 500 for each Board Of Directors meeting attended, each director will be granted options to purchase 10,000 shares at the time the person initially becomes a director. Any options that have not become exercisable at the time of termination of a director's service will expire at that time. At such time that the options to purchase all 10,000 shares have become exercisable, options to purchase an additional 10,000 shares will be granted to the director subject to the restrictions on exercise. The options are granted to the Outside Directors pursuant to the Company's Non-Discretionary Stock Option Plan, and their exercise price is equal to the closing sales price for the Company's Common Stock on the date of grant. These options expire upon the later to occur of (i) five years after the date of grant, and (ii) two years after the date those options first become exercisable.
Effective in November 1993, the Company obtained directors and officers insurance coverage. Coverage of the directors of the Company under this policy may be considered compensation for the directors.
Other Arrangements. During the year ended December 31, 1995, no compensation was paid to directors of the Company other than pursuant to the standard compensation arrangements described in the previous section.
Employment Contracts And Termination Of Employment And Change-In-Control Arrangements
The Company does not have any written employment contracts with respect to any of its executive officers named in the Summary Compensation Table except for William F. Wallace. The Company entered into a six month employment agreement with Mr. Wallace effective at the consummation of the Barrett-Plains merger. In addition, Mr. Wallace is a party to an agreement with Plains to which the Company became bound as a result of the Barrett-Plains merger. That agreement provides, among other things, that if, within three years after a "Change In Control" (as defined in the agreement), Mr. Wallace's employment with Plains is involuntarily terminated or is terminated by Mr. Wallace for "Good Reason", Mr. Wallace is to be paid a cash amount equal to (a) 299 percent of the higher of (i) his then annual compensation (including salary, bonuses and incentive compensation) or (ii) the highest annual compensation (including salary, bonuses and incentive compensation) paid or payable during any of the three calendar years ending with the year of his termination, plus, (b) an amount equal to any excise taxes payable by Mr. Wallace with respect to these amounts and any excise or income taxes payable by Mr. Wallace as a result of the reimbursement of the excise taxes. "Good Reason" is defined as a reduction in Mr. Wallace's compensation or employment responsibilities, a required relocation outside the greater Denver, Colorado area or, generally, any conduct by Plains that renders Mr. Wallace unable to discharge his employment duties effectively. Following the cessation of Mr. Wallace's employment with the Company on March 6, 1996, the Company paid to Mr. Wallace $1,024,440 in satisfaction of the Company's obligations pursuant to Mr. Wallace's employment agreement with Plains. The Company has no other compensatory plan or arrangement that results or will result from the resignation, retirement, or any other termination of the employment with the Company and its subsidiaries of the executive officers named in the Summary Compensation Table or from a change-in-control, except that (i) in January 1994, the Board Of Directors approved a resolution allowing all options outstanding under the Company's 1990 Stock Option Plan to become exercisable if an announcement is made concerning a business combination with the Company; and (ii) in September 1994, the Compensation Committee committed to Mr. Reed that all stock options that has been granted to him as of September 10, 1994 would become exercisable upon termination of his employment provided that he remains in the employment of the Company continuously until September 10, 1997, and further provided that the Compensation Committee, or its successor, determines as of the date of his termination that his employment performance has satisfied the Company's employment standards for executive officers.
Compensation Committee Interlocks And Insider Participation
During the year ended December 31, 1995, each of C. Robert Buford, James M. Fitzgibbons, Derrill Cody, Hennie L.J.M. Gieskes, James T. Rodgers, Philippe S.E. Schreiber and Harry S. Welch served as members of the Compensation Committee of the Board Of Directors. Mr. Schreiber served as the President of Excel Energy Corp. prior to the 1985 merger of Excel with and into the Company and Mr. Gieskes served as Chairman Of The Board of Excel at the time of the merger of Excel with and into the Company. No other person who served as a member of the Compensation Committee during the year ended December 31, 1995 was, during that year, an officer or employee of the Company or of any of its subsidiaries, or was formerly an officer of the Company or of any of its subsidiaries. For a description of transactions involving Mr. Buford and the Company, please see Item 13. "Certain Relationships and Related Transactions".
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table summarizes certain information as of March 12, 1996 with respect to the ownership by each director, by each executive officer named in the "Executive Compensation" section above, by all executive officers and directors as a group, and by each other person known by the Company to be the beneficial owner of more than five percent of the Common Stock:
- -------- (1) The number of shares indicated includes 6,790 shares owned by Louise K. Barrett, Mr. Barrett's wife, 230,000 shares owned by the Barrett Family L.L.L.P., a Colorado limited partnership for which Mr. Barrett and his wife are general partners and owners of an aggregate of 77.21462 percent of the partnership interests, and 49,998 shares underlying options that currently are exercisable or become exercisable within the next 60 days. Pursuant to Rule 161-1(a)(4) under the Securities Exchange Act of 1934 (the "1934 Act"), Mr. Barrett disclaims ownership of all but 177,594 shares held by the Barrett Family L.L.L.P., which constitutes Mr. and Mrs. Barrett's proportionate shares of the shares held by the Barrett Family L.L.L.P. (2) C. Robert Buford is considered the beneficial owner of the 604,830 shares of which Zenith Drilling Corporation ("Zenith") is the record owner. Mr. Buford owns approximately 89 percent of the outstanding common stock of Zenith. The number of shares indicated for Mr. Buford also includes 10,000 shares that are owned by Aguilla Corporation, which is owned by Mr. Buford's wife and adult children. Mr. Buford disclaims beneficial ownership of the shares held by Aguilla Corporation pursuant to Rule 16a- 1(a)(4) under the 1934 Act. The number of shares indicated also includes 8,000 shares underlying options currently exercisable at $10.375 per share. (3) The number of shares indicated consists of or includes the following number of shares underlying options that currently are exercisable or that become exercisable within the next 60 days that are held by each of the following persons: Derrill Cody, 9,300; James M. Fitzgibbons, 6,500; Hennie L.J.M. Gieskes, 7,000; William W. Grant, III, 12,900; J. Frank Keller, 22,350; Paul M. Rady, 26,500; James T. Rodgers, 8,500; Philippe S.E. Schreiber, 6,500; William F. Wallace, 99,030; and Harry S. Welch, 14,200. Mr. Wallace resigned as an executive officers of the Company effective January 11, 1996 and as an employee of the Company effective March 6, 1996. (4) Less than one percent of the Common Stock outstanding. (5) The number of shares indicated includes 12,500 shares owned by Mary C. Reed, Mr. Reed's wife and 35,800 shares underlying options currently are exercisable or that become exercisable within the next 60 days. (6) The number of shares indicated includes the shares owned by Zenith that are beneficially owned by Mr. Buford as described in note (2), and the aggregate of 306,578 shares underlying the options described in notes (1), (2), (3) and (5), an aggregate of 27,127 shares owned by four executive officers not named in the above table, an aggregate of 745 shares the beneficial ownership of which is disclaimed by the four executive officers not named in the above table, and an aggregate of 74,109 shares underlying options that currently are exercisable or that are exercisable within 60 days that are held by those four executive officers. (7) Wellington Management company, in its capacity as investment adviser, may be deemed the beneficial owner of these shares which are owned by numerous investment counseling clients.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the year ended December 31, 1995, Zenith, which owns a working interest in many of the leases for which the Company is the operator, paid to the Company, as operator, approximately $1,062,000 as Zenith's portion of the lease operating expenses and development costs for those leases. Also, as a result of its working interest in those leases, Zenith received approximately $942,000 as its share of revenues. Zenith owns working interests ranging from three to 50 percent in leases of which the Company is the operator. All terms and arrangements between Zenith and the Company with respect to these working interests are the same as those between the Company and the other working interest owners in the leases. Zenith is 89 percent owned by Mr. Buford.
Mr. Buford also is the President of Grand Valley Corporation ("GVC"), which owns approximately a 10 percent interest in the pipeline gathering system and related facilities on the Company's Grand Valley Field. Ten percent of GVC is owned by Mr. Buford, and 90 percent of GVC is owned by Mr. Buford's three adult children. During the year ended December 31, 1995, GVC's proportionate share of the pipeline gathering system's expenses, not including depreciation, was approximately $148,000, and its share of the pipeline gathering system's revenues was approximately $909,000. All terms and arrangements between GVC and the Company with respect to this gathering system are the same as those between the Company and the other owners of the gathering system.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) and (a)(2) Financial Statements And Financial Statement Schedules
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
All other schedules are omitted because the required information is not present in amounts sufficient to require submission of the schedule or because the information required is included in the Consolidated Financial Statements and Notes thereto.
(a)(3) Exhibits
See "EXHIBIT INDEX" on page 33.
(b) Reports On Form 8-K. No reports on Form 8-K were filed during the fourth quarter of the year ended December 31, 1995.
EXHIBIT INDEX
REPORT OF ARTHUR ANDERSEN LLP
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors Barrett Resources Corporation Denver, Colorado 80202
We have audited the accompanying consolidated balance sheets of Barrett Resources Corporation (a Delaware corporation) and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these 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 financial statements referred to above present fairly, in all material respects, the financial position of Barrett Resources Corporation and subsidiaries as of December 31, 1995 and 1994, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles.
As explained in Note 8 to the financial statements, effective January 1, 1993, the Company changed its method of accounting for postretirement benefits.
Arthur Andersen LLP
Denver, Colorado March 1, 1996
BARRETT RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994 (IN THOUSANDS)
See accompanying notes.
BARRETT RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 (IN THOUSANDS, EXCEPT PER SHARE DATA)
See accompanying notes.
BARRETT RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 (IN THOUSANDS)
See accompanying notes.
BARRETT RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 (IN THOUSANDS)
See accompanying notes.
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Barrett Resources Corporation (the "Company") is an independent natural gas and oil exploration and production company with producing properties located in the mid-continent states and Rocky Mountain region of the United States. Barrett also operates gas gathering systems and related facilities in the areas which are synergistic to the Company's production. Barrett has a gas marketing and trading subsidiary, which allows the Company to market the Company's natural gas production and to purchase and sell other companies' natural gas.
Principles of consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All significant intercompany transactions have been eliminated in consolidation. Certain reclassifications have been made to 1993 and 1994 amounts to conform to the 1995 presentation.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. There are many factors, including global events, that may influence the production, processing, marketing, and valuation of crude oil and natural gas. A reduction in the valuation of oil and gas properties resulting from declining prices or production could adversely impact depletion rates and ceiling test limitations.
Partnerships
The consolidated financial statements include the Company's proportionate share of the assets, liabilities, revenues and expenses of its oil and gas partnership interests.
Cash and cash equivalents
Cash in excess of daily requirements is invested in money market accounts and commercial paper with maturities of three months or less. Such investments are deemed to be cash equivalents for purposes of the consolidated statements of cash flows. The carrying amount of cash equivalents approximates fair value because of the short maturity of those instruments.
Oil and gas properties
The Company utilizes the full cost method of accounting for oil and gas properties whereby all productive and nonproductive costs paid to third parties that are incurred in connection with the acquisition, exploration and development of oil and gas reserves are capitalized. No gains or losses are recognized upon the sale, conveyance or other disposition of oil and gas properties except in extraordinary transactions.
Capitalized costs are accumulated on a country-by-country basis subject to a cost center ceiling and amortized using the units-of-production method. The Company presently has only one cost center since all of its properties are located in the United States. Amortizable costs include developmental drilling in progress as well
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993 as estimates of future development costs of proved reserves but exclude the costs of unevaluated oil and gas properties. Accumulated depreciation and amortization is written off as assets are retired. Depletion and amortization equaled approximately $.55, $.52 and $.48 per Mcfe ($3.28, $3.14 and $2.87 per BOE) during the years ended December 31, 1995, 1994 and 1993, respectively.
The Company capitalizes interest costs on amounts expended on assets during the period in which activities are occurring to place the asset in service. Amounts spent to develop properties included in the full cost center of oil and gas properties are excluded from the interest capitalization computation.
The Company acquires nonproducing acreage for its exploration and development activities. The cost of these leases is included in unevaluated oil and gas property costs recorded at the lower of cost or fair market value.
The Company operates many of the wells in which it owns an economic interest. The operating agreements for these activities provide for a fee structure to allow the Company to recover a portion of its direct and overhead charges related to its operating activities. The fees collected under the operating agreements are recorded as a reduction of general and administrative expenses. Any amounts collected from a sale of oil and gas interests or earned as a result of assembling oil and gas drilling activities are applied to reduce the book value of oil and gas properties.
Other property and equipment
Other property and equipment is recorded at cost. Renewals and betterments which substantially extend the useful life of the assets are capitalized. Maintenance and repairs are expensed when incurred. Depreciation is provided using accelerated and straight-line methods over the estimated useful lives, ranging from five to ten years, of the assets.
Amounts payable to oil and gas property owners
Amounts payable to oil and gas property owners consist of cash calls from working interest owners to pay for development costs of properties being currently developed, production revenue that the Company, as operator, is collecting and distributing to revenue interest owners and production revenue taxes that the Company, as operator, has withheld for timely payment to the tax agencies.
Trading and hedging activities
The Company's business activities include buying and selling of natural gas. The Company recognizes revenue and costs on gas trading transactions at the point in time when gas is delivered to the purchaser.
The Company uses both commodity futures contracts and price swaps to hedge the impact of price fluctuations on a portion of its production and trading activities. The Company enters into a hedging position for specific transactions that management deems expose the Company to an unacceptable market price risk. Price swaps or commodities transactions without corresponding scheduled physical transactions (scheduled physical transactions include committed trading activities or production from producing wells) do not qualify for hedge accounting. The Company classifies these positions as trading positions and records these instruments at fair value. Gains and losses are recognized as fair values fluctuate from time to time compared to cost.
Gains or losses on hedging transactions are deferred until the physical transaction occurs for financial reporting purposes. Deferred gains and losses and unrealized gains and losses are evaluated in connection with
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993 the physical transaction underlying the hedge position. Hedging gains or losses significantly exceeding the price movement of the underlying physical transaction are recorded in the consolidated statements of income in the period in which the lack of correlation occurred. Gains or losses on hedging activities are recorded in the consolidated statements of income as adjustments of the revenue or cost of the underlying physical transaction. Hedging transactions are reported as operating activities in the consolidated statements of cash flows.
Earnings per share
Per share amounts were computed using the weighted average number of shares of common stock and common stock equivalents outstanding during each year: 1995--24,931,000; 1994--24,967,000 and 1993--24,778,000. Options to purchase stock are included as common stock equivalents, when dilutive, using the treasury stock method.
Change in fiscal year
On July 18, 1995, the Company changed its fiscal year-end from September 30 to December 31. A transition report for the period October 1, 1994 through December 31, 1994 was filed with the Securities and Exchange Commission. During the three months ended December 31, 1994, the Company reported revenues of $15 million and net income of $207,000.
2. MERGER
On July 18, 1995 Plains Petroleum Company ("Plains") was merged with and into a subsidiary of the Company, resulting in Plains becoming a wholly-owned subsidiary of the Company. Approximately 12.8 million shares of the Company's common stock were issued in exchange for all of the outstanding common stock of Plains. Additionally, outstanding options to acquire Plains common stock were converted to options to acquire approximately 593,000 shares of the Company's common stock. In connection with the merger, the Company's authorized number of shares of common stock was increased to 35 million. The merger was accounted for as a pooling of interests, and accordingly, the accompanying financial statements have been restated to include the accounts and operations of Plains for all periods prior to the merger.
Plains used the successful efforts method of accounting for its oil and gas exploration and development activities. In conjunction with the merger, Plains adopted the full cost method used by the Company resulting in increases of net property and equipment due to the capitalization of exploration costs, reversal of impairment and adjustments of depreciation, depletion and amortization expense for periods prior to the merger. The financial statements for 1994 and 1993 have been retroactively restated for the change in accounting method which resulted in increased net income. Retained earnings and deferred income taxes have been adjusted for the effect of the retroactive application of the new method.
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
Certain reclassifications have been made to the historical consolidated financial statements of the separate companies to conform the financial statements to a comparable presentation. There were no intercompany transactions between the Company and Plains. Separate results for the periods preceding the merger, including the conversion to full cost for Plains and the change to a December 31 year-end for the Company, were as follows (in 000's):
- -------- (1) Restated to full cost to conform accounting policies (2) To conform year ends
In connection with the merger, approximately $14.2 million of merger and reorganization costs and expenses were incurred and have been charged to expense in the Company's third and fourth quarters of fiscal 1995. These nonrecurring costs and expenses consist of (1) investment banker and professional fees of $7.4 million; (2) severance and employee benefit costs of $5.6 million for approximately 38 employees, terminated through consolidation of administrative and operational functions; (3) a non-cash credit of approximately $.9 million associated with the termination of Plains' postretirement benefit plans and other related benefit plans and (4) other merger and reorganization related costs of $2.1 million.
3. RECEIVABLES
The Company's accounts receivable are primarily due from medium size oil and gas entities in the Rocky Mountain region. Collection of joint interest billings is generally secured by future production. The Company performs periodic credit evaluations of customers purchasing production for which no collateral is required. Historically, the Company has not experienced significant losses related to these extensions of credit.
As of December 31, 1995 and 1994, receivables are recorded net of allowance for doubtful accounts of $201,000 and $224,000, respectively.
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
4. PROPERTY AND EQUIPMENT
The Company capitalized interest costs of $403,000 in 1995 with respect to qualifying properties. Total interest costs incurred after recognition of the capitalized interest amount was $4.6 million in 1995.
5. UNEVALUATED OIL AND GAS PROPERTY COSTS
Unevaluated oil and gas property costs consist of the following:
The unevaluated costs were incurred for projects which are being explored. The Company anticipates that substantially all unevaluated costs will be classified as evaluated costs within the next three years.
6. LONG-TERM DEBT
The Company has a reserve-based line of credit with a group of banks which provides up to $200 million for a four year period ending July 19, 1999. The amount actually available to the Company under the line at any given time is limited to the collateral value of proved reserves as determined by the lenders. Based on the lenders' determination of collateral value, as of December 31, 1995 (which was based on the March 31, 1995 and December 31, 1994 reserve reports), the Company has a borrowing limit of $160 million. In order to reduce the commitment fees, the Company voluntarily requested that the lenders limit the maximum borrowing to $90 million through December 31, 1995. Subsequent to December 31, 1995, the Company increased the maximum borrowing limit to $110 million. The lenders are currently reviewing the December 31, 1995 reserve report to determine current collateral value. The Company is required to pay interest only during the revolving period. At its option, the Company has elected to use the London interbank eurodollar rate (LIBOR) plus a spread ranging from .5 percent to 1.0 percent (depending on the Company's borrowing relative to its borrowing base) for a substantial portion of the outstanding balance. As of December 31, 1995 the Company's outstanding balance under the line of credit was $89 million of which $83 million was accruing interest at an average LIBOR based rate of 6.62 percent and $6 million was accruing interest on a prime based rate of 8.50 percent. The line of credit agreement restricts the payment of dividends, borrowings, sale of assets, loans to others, investment and merger
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993 activity over certain limits without the prior consent of the bank and requires the Company to maintain certain net worth and debt to equity levels. Based on the variable borrowing rates and re-pricing terms currently available to the Company for the line of credit, management believes the fair value of long-term debt approximates the carrying value.
7. OPTIONS
The Company has two employee stock option plans, a 1990 Plan and a 1994 Plan, under which the Company's common stock may be granted to officers and employees of the Company and subsidiaries. The 1990 Plan, as amended, provided for the granting of 775,000 shares. The 1994 Plan provides for the granting of 400,000 shares of the Company's common stock. In addition, the Company has a non-discretionary stock option plan under which options for an aggregate of 100,000 shares of the Company's common stock may be granted to non-employee directors. In connection with the merger discussed in Note 2, the Company assumed preexisting Plains stock option plans and converted all options then outstanding into options to acquire shares of the Company's common stock. No further options will be granted under the Plains' plans.
Summary of options granted, exercised and outstanding during 1994 and 1995 is as follows:
8. RETIREMENT BENEFITS
The Company has a voluntary 401(k) employee savings plan. Under this plan, the Company matches 50% of each of the participating employees' contributions, up to a maximum of 6% of base salary. Effective April 1, 1996, the Company's match will be increased to 100% of each of the participating employees contributions, up to a maximum of 6% of base salary, with one-half of the match paid in cash and one half of the match paid in the Company's common stock. The Company's matching contributions are subject to a vesting schedule. Company contributions were $239,000, $179,000 and $166,000 in 1995, 1994 and 1993, respectively.
Plains had several employee benefit plans described below. Pursuant to the terms of the merger agreement between Plains and the Company, these plans were terminated.
Plains' qualified, defined benefit retirement plan covered substantially all of its employees. The benefits were based on a specified level of the employee's compensation during plan participation. As of July 18, 1995, the plan froze benefit accruals. Pursuant to the plan, all participants became fully vested. Plan assets consist of
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993 cash and equivalents, corporate stocks and bonds, U.S. treasury notes, insured annuity contracts, and accrued interest. Contributions totaled $169,000, $312,000 and $341,000 for the 1995, 1994 and 1993 plan years, respectively.
The following table sets forth the plan's funded status:
The weighted average discount rate used in determining the actuarial present value of the projected benefit obligation was 4.5% (termination rates). The rate of increase used for compensation levels was nil in 1995 and 5% in 1994 and 1993, respectively. The expected long-term rate of return on assets was 8.5%.
Plains also contributed the lesser of 10% of its net earnings or 10% of employee compensation to a profit sharing plan of Plains. No contributions were made for 1995. Plains contributed $334,000 and $188,000 for 1994 and 1993, respectively.
Through June 30, 1995 and during 1994, Plains matched 401(k) plan deferrals with contributions equal to 50% of each deferral up to 6% of current salary. This matching contribution was invested in Plains stock and were subject to a vesting schedule. Participants became fully vested with the merger with and into Barrett. Contributions were approximately $112,000, $192,000 and $250,000 for 1995, 1994 and 1993, respectively.
The above described profit-sharing and 401(k) plans were terminated July 1, 1995; the pension plans were terminated September 18, 1995. Internal Revenue Service approval for termination of these plans was received in January 1996. Final distribution of plan assets will be made to participants in the second quarter of 1996.
Plains' executive deferred compensation plan and directors' deferred plan permitted the deferral of current salary or directors' fees for the purpose of providing funds at retirement or death for employees, directors and
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993 their beneficiaries. These plans were terminated effective June 30, 1995 and will be disbursed to the participants by the trustee of the assets over a period ending January 1, 1997. Total accrued liability under these plans at December 31, 1995 and 1994 was $36,000 and $1,006,000, respectively.
Concurrently with the effective date of the merger, Plains' postretirement healthcare benefit and salary continuation plans were terminated. Participants in the salary continuation plan received (1) a lump sum benefit equal to the present value of the remaining monthly payments if receiving Death Benefits under the plan at the date of the termination, or (2) insurance policies, the cost of which was limited to the cash values of the life insurance policies owned by Plains. Benefits associated with the postretirement healthcare benefit plan were terminated and, accordingly, accrued postretirement benefit costs were relieved.
Effective January 1, 1993, Plains adopted Statement No. 106 (FAS 106) issued by the Financial Accounting Standards Board on accounting for postretirement benefits other than pensions. In accordance with this statement, Plains elected to recognize the accumulated postretirement benefit liability as of the effective date, totaling approximately $800,000 (pretax). With the termination of these plans in 1995, all future obligations were settled and ceased to exist.
Obligations for previous periods were as follows:
9. HEDGING ACTIVITIES
The Company uses various hedging techniques to reduce the effect of price volatility on the sales price of a portion of its oil and gas sales. The objective of its hedging activities is to achieve more predictable revenues and cash flows. The following is a summary of the Company's hedging transactions in effect as of December 31, 1995.
A. The Company is the fixed price payor for hedging transactions relating to 6,000 MMBtu of gas per day for 1996 at $1.33 per MMBtu and approximately 7,000 MMBtu of gas per day for January through May 1996 at an average price of $2.12 per MMBtu. Under these price swap arrangements, the Company has agreed to buy gas at a fixed price and sell gas at an index price. These price swaps were entered to accommodate markets desiring fixed price supplies.
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
B. The Company will receive fixed prices ranging from $1.46 to $2.12 per MMBtu in swap transactions associated with an average of 52,000 MMBtu of gas per day to be produced by the Company subsequent to December 31, 1995 through March 1996. The Company is required to pay an index price to its financial counterparty. The Company sold a call option on 20,000 MMBtu per day for April through October 1996. Under this option, the Company will receive $1.86 per MMBtu should the option holder elect to exercise.
C. The Company's gas hedges also include a collar in which the Company sold a call and purchased a put with respect to 10,000 MMBtu per day in 1996 with an average floor (put) price of $1.60 per MMBtu and an average ceiling (call) price of $1.92 per MMBtu. Under this arrangement, the Company receives a payment if the index price falls below the floor and makes a payment to the counterparty if the index price exceeds the ceiling. To reduce exposure to increasing index prices, the Company purchased call options with prices averaging $2.673 per MMBtu January--March and $1.969 per MMBtu April--December, 1996.
D. The Company has entered into basis swaps to minimize different index price fluctuations. The Company will receive a payment in the event that the New York Mercantile Exchange ("NYMEX") price per MMBtu for a reference period exceeds the average specified index price by more than an average of $.29 on 10,000 MMBtu of gas per day from January through March 1996 ($.44 on 5,000 MMBtu of gas per day for April 1996). In separate basis swaps, the Company will receive a payment in the event the specified index price exceeds the NYMEX price net of a basis adjustment of an average of $.48 on 10,000 MMBtu of gas per day from January through October 1996. Conversely, the Company will be required to make payments to the counterparty if the opposite situation exists in these swaps. These swaps were entered to offset a portion of the risk associated with the Company's long-term firm transportation portfolio.
E. With respect to crude oil production, the Company entered into a price swap whereby the Company will receive a fixed price of $18.00 per Bbl for 1,000 Bbls per day through March 1996. The Company is required to pay the counterparty a NYMEX settlement price.
As of December 31, 1995, some of the Company's hedging positions described above did not qualify for hedge accounting due to reduced correlation between the index price and the prices to be realized for certain physical gas deliveries. Accordingly, the Company recognized hedging losses of $1.2 million in the fourth quarter of 1995. These losses offset hedging gains of $1.6 million realized in 1995. The net hedging gain was included in oil and gas revenues. The Company paid and received certain premiums related to its option contracts for future periods. The unrealized hedging losses and net deferred premium costs have been included in other liabilities.
During 1995, the Company incurred a net cost of $2.1 million to hedge the index based price for a portion of its gas purchased in various transactions for gas trading activities. These payments allowed the Company to purchase gas on a fixed price basis to satisfy fixed price sales commitments. This hedging allowed the Company to avoid gas price fluctuations for the related transactions so that the Company realized the gross profit margins anticipated upon entering into the trading arrangements. This hedging cost is included in the income statement as a component of "Cost of Trading."
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
10. COMMITMENTS AND CONTINGENCIES
Lease Commitments
The minimum future payments under the terms of operating leases, principally for office space, are as follows:
The Company plans to sublet office space vacated with the consolidation and relocation of its Denver offices and accordingly anticipates a substantial reduction in rental expense for the years 1996 through 1999. Rent expense was $956,000, $859,000 and $788,000 for the years ended December 31, 1995, 1994 and 1993, respectively.
Litigation
On November 2, 1994, a putative class action was filed in Delaware Chancery Court. In that case, entitled Miller v. Cody, the plaintiff has alleged that certain named former directors of Plains, and Plains, have, among other things, breached their fiduciary duties and otherwise acting to entrench themselves in office. Plaintiff seeks various forms of injunctive relief, damages and an award of plaintiff's costs and disbursements.
On May 3, 1995, the same day Plains announced it had executed a merger agreement with the Company, a putative class action, entitled Crandon Capital Partners v. Miller, was filed in Delaware Chancery Court against Plains and the then-current members of its Board of Directors. In this suit it is alleged that, among other things, the agreement was inadequate, plaintiff seeks various forms of declaratory and injunctive relief, damages and an award of plaintiff's costs and disbursements.
Plains and its former directors have received a status report filed by plaintiffs' counsel in both cases indicating a "stipulation of dismissal without prejudice will be circulated shortly."
Except as noted above, at December 31, 1995, the Company was a party to certain other legal proceedings which have arisen out of the ordinary course of business. Based on the facts currently available, in management's opinion the liability, individually or in the aggregate, if any, to the Company resulting from such actions will not have a material adverse effect on the Company's consolidated financial position or results of operations.
Environmental Controls
At year end 1995, there were no known environmental or other regulatory matters related to the Company's operations which are reasonably expected to result in a material liability to the Company. Compliance with environmental laws and regulations has not had, and is not expected to have, a material adverse effect on the Company's capital expenditures, earnings or competitive position.
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
Major Purchaser
During 1995, one purchaser accounted for 18 percent of the Company's total revenue (24 percent of oil and gas revenues.) Sales of gas to this purchaser represented 19 percent and 29 percent of total revenues in 1994 and 1993, respectively.
11. INCOME TAXES
The provision for income taxes consists of the following:
The difference between the provision for income taxes and the amounts which would be determined by applying the statutory federal income tax rate to income before provision for income taxes is analyzed below:
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
Long-term deferred tax assets (liabilities) are comprised of the following at December 31, 1995 and 1994:
Valuation allowances of $1,193,000 and $797,000 were provided at December 31, 1995 and 1994, respectively, based on carryforward amounts which may not be utilized before expiration and the possible effect of exploratory drilling costs.
The Company has the following net operating loss and investment tax credit carryforwards available:
- -------- A substantial portion of the net operating losses were acquired in conjunction with purchased operations.
The 1990 public offering of common stock by the Company before the Plains merger resulted in a change in the Company's ownership as defined in Section 382 of the Internal Revenue Code. The effect of this change in ownership limits the utilization of net operating losses for income tax purposes to approximately $3,069,000 per year which affects $13,590,000 of the net operating losses. The 1995 merger with Plains also resulted in a
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993 change in the Company's and Plains' ownership as defined by Section 382 of the Internal Revenue Code. The change effectively limits the utilization of the remaining net operating losses for income tax purposes to approximately $14,000,000 for each company. Portions of the above limitations which are not used each year may be carried forward to future years.
The Internal Revenue Service (IRS) is currently examining the federal tax returns of Plains and subsidiaries for calendar years 1991, 1992 and 1993. The examinations are not yet complete, but based on preliminary comments from the IRS examiner, management anticipates that the IRS will propose adjustments to disallow net operating loss deductions claimed by Plains thereby increasing taxable income for the years under examination. Management is of the opinion that the federal tax returns of Plains for years 1991 through 1993 reflect the proper federal income tax liability as supported by relevant authority. The Company intends to vigorously dispute any adjustments proposed by the examining agent and furthermore believes that the Company will prevail in its positions.
12. SUPPLEMENTAL CASH FLOW SCHEDULES AND INFORMATION
Cash paid during years
In May 1994, Plains completed a contingent provision of the 1990 McAdams, Roux and Associates, Inc. (MRA) Agreement and Plan of Merger, as it related to the right of the MRA shareholders to receive additional shares of Plains' common stock and cash subject to reserves additions on certain property interests owned by MRA prior to the merger. Under this Agreement, 31,873 shares of Plains' common stock were issued and a cash payment of $1.5 million was paid to MRA's shareholders in settlement of this obligation.
13. RELATED PARTIES
During the years ended December 31, 1995, 1994 and 1993 Zenith Drilling Corporation ("Zenith") was billed by the Company as operator, approximately $1,062,000, $1,853,000 and $2,555,000, respectively, for Zenith's portion of lease operating expenses and development costs in certain leases operated by the Company. Also as a result of Zenith's working interest ownership, the Company distributed oil and gas revenue of approximately $942,000, $936,000 and $1,074,000 to Zenith during 1995, 1994 and 1993, respectively. Zenith owns its working interests subject to the same terms and arrangements that exist for all working interest owners in the properties. Zenith owns approximately three percent of the Company's common stock and its president is a member of the Company's board of directors.
During 1993, the Company and Zenith both sold their respective interests in the Wattenberg field. The Company and Zenith jointly negotiated the sale but the purchaser independently determined the individual offer prices and entered into separate sales agreements with each party.
Grand Valley Corporation owns approximately 10 percent of a pipeline joint venture for gas gathering of which a subsidiary of the Company owns approximately 29 percent. A member of the Company's board of
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993 directors owns 10 percent of the outstanding stock, and is the president of Grand Valley Corporation. His three adult children own the remaining 90 percent of the outstanding stock of Grand Valley Corporation.
14. QUARTERLY INFORMATION (UNAUDITED)
SUPPLEMENTAL OIL AND GAS INFORMATION
The following is information pertaining to the Company's oil and gas producing activities for the years ended December 31, 1995, 1994 and 1993.
Costs incurred in oil and gas property acquisition, exploration, and development activities:
OIL AND GAS RESERVE INFORMATION (UNAUDITED):
The following reserve related information for 1995 is based on estimates prepared by the Company. The 1995 reserve information for the Company, exclusive of the reserves owned by its subsidiary, Plains, were reviewed by Ryder Scott, an independent reservoir engineer. The 1995 reserve information for Plains was reviewed by Netherland, Sewell & Associates, Inc., an independent reservoir engineer. The Company's 1994 and 1993 reserves, exclusive of Plains were prepared by the Company and reviewed by Ryder Scott as of September 30, of each year. The 1994 and 1993 proved developed reserve estimates of Plains were prepared by Netherland, Sewell & Associates, Inc. whereas the proved undeveloped reserve estimates were prepared by Plains. Reserve estimates are inherently imprecise and are continually subject to revisions based on production history, results of additional exploration and development, prices of oil and gas and other factors.
The following is the standardized measure of discounted future net cash flows relating to proved oil and gas reserves in which the Company has an interest.
The future income tax expenses have been computed considering the tax basis of the oil and gas properties, and net operating and other loss carryforwards.
The following are the principal sources of changes in the standardized measure of discounted future net cash flows:
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
Barrett Resources Corporation
/s/ William J. Barrett Date: March 5, 1996 By: _________________________________ WILLIAM J. BARRETT, CHIEF EXECUTIVE OFFICER
Date: March 5, 1996 /s/ John F. Keller By: _________________________________ JOHN F. KELLER, CHIEF FINANCIAL OFFICER, SECRETARY, AND PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER
SIGNATURE TITLE DATE
/s/ William J. Barrett Director March 5, 1996 - ------------------------------------- WILLIAM J. BARRETT
/s/ C. Robert Buford Director March 5, 1996 - ------------------------------------- C. ROBERT BUFORD
/s/ Derrill Cody Director March 5, 1996 - ------------------------------------- DERRILL CODY
/s/ James M. Fitzgibbons Director March 5, 1996 - ------------------------------------- JAMES M. FITZGIBBONS
/s/ Hennie L.J.M. Gieskes Director March 5, 1996 - ------------------------------------- HENNIE L.J.M. GIESKES
/s/ William W. Grant, III Director March 5, 1996 - ------------------------------------- WILLIAM W. GRANT, III
/s/ John F. Keller Director March 5, 1996 - ------------------------------------- JOHN F. KELLER
/s/ Paul M. Rady Director March 5, 1996 - ------------------------------------- PAUL M. RADY
/s/ A. Ralph Reed Director March 5, 1996 - ------------------------------------- A. RALPH REED
/s/ James T. Rodgers Director March 5, 1996 - ------------------------------------- JAMES T. RODGERS
/s/ Philippe S.E. Schreiber Director March 5, 1996 - ------------------------------------- PHILIPPE S.E. SCHREIBER
/s/ Harry S. Welch Director March 5, 1996 - ------------------------------------- HARRY S. WELCH
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