-----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, M+U9ZDv305SBT+FcDoa61/ZuNtHLJ8aLP84oc+osr8D3AcfOjlKG6Bv7xC8Lky7w Wsvvio1MOY2t4uQ9zz6z2Q== 0000950134-97-001392.txt : 19970228 0000950134-97-001392.hdr.sgml : 19970228 ACCESSION NUMBER: 0000950134-97-001392 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970220 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970227 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXPLORATION CO CENTRAL INDEX KEY: 0000313395 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 840793089 STATE OF INCORPORATION: CO FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-09120 FILM NUMBER: 97544641 BUSINESS ADDRESS: STREET 1: 500 N LOOP 1604 E STE 250 CITY: SAN ANTONIO STATE: TX ZIP: 78232 BUSINESS PHONE: 2104965300 MAIL ADDRESS: STREET 1: 500 N LOOP 1604 E STREET 2: SUITE 250 CITY: SAN ANTONIO STATE: TX ZIP: 78232 8-K 1 FORM 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 THE EXPLORATION COMPANY (Exact name of registrant as specified in its charter) 500 NORTH LOOP 1604 EAST, SUITE 250, SAN ANTONIO, TEXAS 78232 (Address of principal executive offices) (210) 496-5300 (Registrant's telephone number, including area code) COLORADO 0-9120 84-0793089 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) Date of Report (Date of Earliest Event Required to be Reported): FEBRUARY 20, 1997 1 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Purchase of Williston Basin Leases Under the terms of that certain agreement dated January 21, 1997 between The Exploration Company ("TXCO") and Retamco Operating, Inc. and TransEuro Capital, Inc., TXCO has purchased as of February 20, 1997, an interest ranging from 75% to 100% in a minimum of 221,329.68 net acres in the Williston Basin in the states of North Dakota, South Dakota and Montana. The oil and gas leases generally have an 80% net revenue interest and have 3-5 year primary terms with no additional rental payments. Under the terms of the agreement, TXCO is purchasing the following interests:
Purchased Total Net Acres Area Interest Net Acres Purchased ---- --------- --------- ----------- Red River Prospect 75% 131,860 98,895 Lodgepole Prospect 80% 28,258 22,606 Williston Basin Prospect 100% 99,829 99,829
Per the agreement, TXCO paid $22,000,000 cash and 1,000,000 shares of common stock that will be restricted as to transfer under Rule 144 of the Securities Act of 1933, as amended ("the Act"), for the oil and gas leases. Additionally, a 7.2% net profits interest to Gose Family Trusts, an affiliate of Retamco Operating, Inc., burdens the leases and has been assumed by TXCO. Retamco Operating, Inc. is a private corporation whose officers include Thomas H. Gose and Stephen M. Gose, Jr., both of whom are directors of TXCO. The prices paid for the leases were based upon comparable prices paid for other acreage blocks in the area in private sales and/or public auctions. In order to finance the purchase, as of February 20, 1997, TXCO sold a 42.5% net profits interest in wells to be drilled on the oil and gas leases for $17,000,000 cash and a $4,000,000 five-year debenture convertible to TXCO's common stock at $5.00 per share to a large Swiss pension fund. ITEM 5. OTHER EVENTS TXCO has also raised an additional $14,000,000 cash for common stock privately placed abroad pursuant to Regulation S promulgated under the Act. A total of 2,800,000 shares were sold at a price of $5.00 per share to 14 Non-U.S. persons in Australia, Switzerland and Singapore under the meaning of Rule 902 of Regulation S. No single investor's purchase aggregates to 5% or more of the outstanding stock of TXCO except for the following: (1) Trianon Opus One, Inc. purchased 1,100,000 shares representing approximately 7.5% of TXCO outstanding common stock and, (2) Finanzverwaltung des Kanton St. Gallen's purchase of 600,000 additional shares increases its interest to approximately 7.5% also. TXCO had an outstanding convertible debenture dated August 2, 1994, to W.A. Oil & Gas Loan Trust in the amount of $1,331,212. Effective February 11, 1997, TXCO received notice that the entire amount was to be converted to 532,488 shares of TXCO's common stock pursuant to terms of the debenture agreement. These shares will bear a legend and be restricted as to further transfer under Rule 144 of the Act. TXCO had an outstanding convertible debenture dated May 31, 1994, to D.B. Co., a Texas limited partnership, in the amount of $500,000. Effective January 16, 1997, TXCO received notice that the entire amount was to be converted to 166,666 shares of TXCO's common stock pursuant to terms of the debenture agreement. These shares will bear a legend and be restricted as to further transfer under Rule 144 of the Act. 2 3 Commissions related to the above transactions totaled $700,000 in cash and $900,000 in restricted stock of the Company (180,000 shares valued at $5.00 per share). Deferred loan costs of $200,000 have been capitalized as additional interest costs to be amortized straight line over the five year life of the $4,000,000 convertible debenture. The cumulative effect of the transactions reported in this 8-K is that as of February 20, 1997, TXCO has issued an additional 4,679,154 shares of its common stock thereby increasing its issued and outstanding shares total to 14,739,198 shares. TXCO's unaudited balance sheet net equity is anticipated to increase by approximately $11,163,212. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS The following balance sheets present the Company's historical November 30, 1996 financial position, the adjustments to be recorded pursuant to the described transactions, and a "pro-forma" balance sheet as if the transactions were all consummated effective that date. The transactions reported would have no impact on TXCO's Statement of Operations for the quarter ended November 30, 1996. Additionally, TXCO's net loss per share for the quarter then ended would not change. BALANCE SHEETS (UNAUDITED)
PRO FORMA ASSETS 11/30/96 ADJUSTMENTS 11/30/96 ------------ ------------ ------------ CURRENT ASSETS Cash $ 659,768 $ 12,300,000 $ 12,959,768 Accounts receivable-net 171,437 171,437 ------------ ------------ ------------ Total Current Assets 831,205 12,300,000 13,131,205 PROPERTY & EQUIPMENT Oil & gas properties - net of impairment 7,208,233 832,000 8,040,233 Mineral properties - net of impairment 306,564 306,564 Other equipment 143,491 143,491 Less accumulated depreciation, depletion and amortization (485,431) (485,431) ------------ ------------ ------------ Total Property & Equipment 7,172,857 832,000 8,004,857 OTHER ASSETS Net assets of ExproFuels, Inc. 279,051 279,051 Other assets 158,099 200,000 358,099 ------------ ------------ ------------ Total Other Assets 437,150 200,000 637,150 TOTAL ASSETS $ 8,441,212 $ 13,332,000 $ 21,773,212 ============ ============ ============
3 4 BALANCE SHEETS (UNAUDITED)
PRO FORMA LIABILITIES & SHAREHOLDERS' EQUITY 11/30/96 ADJUSTMENTS 11/30/96 ------------ ------------ ------------ CURRENT LIABILITIES Accounts payable and accrued expenses $ 344,218 $ $ 344,218 Accrued payroll and taxes 22,499 22,499 Current portion of long-term debt 1,362,500 (1,362,500) -0- Current portion of capital lease obligations 27,560 27,560 Total Current Liabilities 1,756,777 (1,362,500) 394,277 ------------ ------------ ------------ LONG TERM LIABILITIES Long-term debt, net of current portion 468,712 3,531,288 4,000,000 Long-term capital lease obligations, net of current portion 31,884 31,884 ------------ ------------ ------------ Total Long-term Liabilities 500,596 3,531,288 4,031,884 STOCKHOLDERS' EQUITY Common stock, par value $.01 per share; authorized 200,000,000 shares; issued and outstanding, 9,900,044 shares (historical) and 14,579,198 shares (after pro forma adjustments) 99,000 46,792 145,792 Additional paid-in capital 24,331,034 11,116,420 35,447,454 Accumulated deficit (18,246,195) (18,246,195) ------------ ------------ ------------ Total Stockholders' Equity 6,183,839 11,163,212 17,347,051 ------------ ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,441,212 $ 13,332,000 $ 21,773,212 ============ ============ ============
4 5 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. THE EXPLORATION COMPANY (Registrant) /s/ James E. Sigmon ---------------------------------- James E. Sigmon President Date: February 20, 1997 5 -----END PRIVACY-ENHANCED MESSAGE-----