-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q5vWaWZ7Gjt5u3PKtCpz8c9IKgA11TB7EX8lzbMR2vPeBH8YcwgPEhL32E1b7M/u 408bbqsA2dtmok2mqVuTJw== 0000950134-01-508836.txt : 20020411 0000950134-01-508836.hdr.sgml : 20020411 ACCESSION NUMBER: 0000950134-01-508836 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011109 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20011116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENCORE ACQUISITION CO CENTRAL INDEX KEY: 0001125057 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 752759650 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16295 FILM NUMBER: 1794647 BUSINESS ADDRESS: STREET 1: 777 MAIN STREET, SUITE 1400 CITY: FORT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8178779955 8-K 1 d92472e8-k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 9, 2001 ENCORE ACQUISITION COMPANY (Exact name of registrant as specified in its charter) Commission File No. 001-16295 --------- Delaware 75-2759650 - ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 777 Main Street, Suite 1400, Ft. Worth, Texas 76102 - --------------------------------------------- ---------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (817) 877-9955 Item 5. Other Events. Purchase of Assets On November 9, 2001, the Company issued a press release announcing the acquisition of oil and natural gas properties in the Permian Basin of West Texas from a major integrated oil company for $55 million. The properties, with estimated proved reserves in excess of 10 million barrels of oil equivalent, have a revenue mix of 97% oil. The Company expects to fund the acquisition from borrowings under the Company's existing Credit Agreement. The Company expects to close the transaction January 2002. A copy of the press release is filed as Exhibit 99.1. Item 7. Financial Statements and Exhibits. (c) Exhibits. 99.1 Press Release dated November 9, 2001. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ENCORE ACQUISITION COMPANY Date: November 16, 2001 By: /s/ Morris B. Smith ------------------------------------ Morris B. Smith Chief Financial Officer, Treasurer, Executive Vice President and Principal Financial Officer Date: November 16, 2001 By: /s/ Robert C. Reeves ------------------------------------ Robert C. Reeves Vice President, Controller and Principal Accounting Officer 2 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 99.1 Press Release dated November 9, 2001.
EX-99.1 3 d92472ex99-1.txt PRESS RELEASE DATED NOVEMBER 9, 2001 RELEASED AT 4:21 P.M. EST ON FRIDAY, NOVEMBER 9, 2001 ENCORE ACQUISITION COMPANY ANNOUNCES $55 MILLION ACQUISITION, SETS CONFERENCE CALL TO DISCUSS TRANSACTION FORT WORTH, Texas - November 9, 2001 - Encore Acquisition Company ("Encore") (NYSE: EAC) announced today that it has agreed to acquire oil and gas properties in the Permian Basin from a major integrated oil company. The purchase price is $55 million, prior to closing adjustments. The two principal operated properties are the East Cowden Grayburg and the Fuhrman Nix fields, and the non-operated properties are the Yates and North Cowden fields. These West Texas fields are located in Ector, Andrews, Crockett and Pecos Counties. Jon Brumley, Chairman, President and CEO stated, "I like this acquisition. These properties are exactly what we do best: acquire and enhance existing oil fields. The properties will have significant in-field drilling opportunities. The properties meet Encore's business strategy, in that production can be held flat with less than 1/2 of cash flow and the remaining 1/2 can be used for growth." The acquisition is accretive to cash flow and allows Encore to continue to expand future cash flow with internally generated opportunities. Based on its development plans and a $22.50 oil price, Encore believes that the 2002 cash flow will exceed $8.5 million and produce around 1,950 barrels of oil equivalent per day. Encore estimates that existing proved reserves are in excess of 10 million barrels. Over 40 development wells have been identified, and the drilling program will be initiated in the second half of 2002. The revenue mix is 97% oil, the reserve to production ratio is over 15 years and over 73% of the acquisition is operated. For the Permian Basin acquisition, Encore has hedged 1,000 barrels of oil per day, 52% of the acquisition's expected oil production for 2002, using a collar with a floor of $20.00 and a cap of $23.73. With these new positions, Encore has hedged a total of 9,500 barrels of oil per day for 2002 by utilizing swaps, floors and caps. For Encore's option-based hedges, the weighted average floor price for 2002 is $22.60 per barrel with 7,000 barrels of oil per day protected by floors. The weighted average ceiling price is $26.30 per barrel, with only 2,500 barrels of oil per day capped. In addition to these hedges, Encore has swapped 2,500 barrels of oil per day for 2002 at a fixed price of $19.47 per barrel. As a result of this option-based hedging strategy, approximately 58% of Encore's 2002 estimated oil production is protected to the downside, while only 30% of 2002 estimated oil production is subject to a ceiling. Encore expects to close the transaction, which is subject to due diligence, in January of 2002 and expects to fund the transaction with bank financing under its existing credit line. The effective date for this transaction is January 1, 2002. CONFERENCE CALL The conference call to discuss the Permian Basin acquisition will be held on Monday, November 12, 2001 at 10:00 a.m. CST. The call can be accessed via http://www.encoreacq.com by selecting "Investor Relations" then "Conference Calls" or by dialing 800-388-8975 and requesting the Encore Acquisition Company Permian Basin Acquisition Conference Call. ADDITIONAL INFORMATION Additional information on the Permian Basin acquisition and Encore pro forma statistics including the acquisition can be accessed via http://www.encoreacq.com. Organized in 1998, Encore is a growing independent energy company engaged in the acquisition, development and exploitation of North American oil and natural gas reserves. Encore's oil and natural gas reserves are located in the Williston Basin of Montana and North Dakota, the Permian RELEASED AT 4:21 P.M. EST ON FRIDAY, NOVEMBER 9, 2001 Basin of Texas and New Mexico, the Anadarko Basin of Oklahoma and the Powder River Basin of Montana. Statements made in this release may constitute "forward-looking statements" as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions and estimations that management believes are reasonable given currently available information. However, the assumptions of management and the future performance of the Company are both subject to a wide range of business risks and uncertainties and there is no assurance that these statements and projections will be met. Actual results could differ materially from those presented in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements. Further information on risks and uncertainties is available in the Company's filings with the Securities and Exchange Commission, which are incorporated by this reference as though fully set forth herein. Contact: Morris B. Smith John H. Selzer Executive Vice President and CFO Director of Financial Services 817-339-0908 817-339-0911 -----END PRIVACY-ENHANCED MESSAGE-----