Investment Valuation Provision
There were no investment valuation provisions recorded in 1994 as
compared to the $582,000 write down recorded in 1993.
Equity in (Earnings) Losses of Unconsolidated Affiliates
The $580,000 or 659% decrease in the earnings of unconsolidated
affiliates to a loss of $492,000 in 1994 compared to income of $88,000 in 1993,
related primarily to an increase in the losses from Servicios of $536,000.
Gain on Disposition of Assets
The gain on disposition of assets of $2.9 million in 1994 compared with
$0.3 million in 1993, related primarily to the gain recognized upon the sale of
WellTech's West Texas operations to Key.
Net cash provided by operating activities of $4.6 million in 1994
increased by $3.7 million over the $933,000 generated in 1993. Of this increase,
$2.3 million was the result of changes in working capital components with the
balance of $1.4 million due to increased cash flows from operations in 1994. Net
cash flows required for investing activities increased in 1994 by $14.1 million.
This increase was due to a substantial increase in capital expenditures ($12.0
million), increased contributions to unconsolidated operations ($2.6 million)
and reduced distributions from Dawson ($363,000) offset by an increase in
property sales proceeds of $822,000. The 1994 capital expenditures program
included significant capital expenditures related to expansion, consisting
primarily of expanded rig operations ($3.7 million), drilling operations ($1.8
million) and expansion into the trucking and disposal business ($4.3 million).
The balance ($3.9 million) was primarily for refurbishments and improvements to
existing machinery and equipment. Net cash from financing activities increased
by $10.0 million from 1993 to 1994 due to an increase in debt proceeds ($5.5
million) and a sale of common stock ($4.5 million). During 1993, there were no
new equity proceeds and an insignificant amount of new debt proceeds.
Year Ended December 31, 1993 Versus Year Ended December 31, 1992
Results of Operations
Revenues for 1993 were $2.5 million or 4% less than 1992. This decrease
was due to WellTech's contribution of its Gulf Coast operations into Dawson
effective November 1992. WellTech's investment in Dawson is accounted for in
accordance with the equity method. This was partially offset by an increase due
to the expansion of the Mid Continent operations during 1993.