-----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, HRIX6sL3iomKkOmir0pjC6Z3ILyMmKJjrgHJSwXOI+BmVocu6XhxJZG1pMfBp8p4 h2K+xmyd6dCAx9IC0f1UBA== 0000950129-97-005432.txt : 19971229 0000950129-97-005432.hdr.sgml : 19971229 ACCESSION NUMBER: 0000950129-97-005432 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971218 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971224 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARCOR ENERGY INC CENTRAL INDEX KEY: 0000315272 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 330234380 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-09300 FILM NUMBER: 97744150 BUSINESS ADDRESS: STREET 1: FIVE POST OAK PARK STREET 2: STE 2220 CITY: HOUSTON STATE: TX ZIP: 77027-3413 BUSINESS PHONE: 7139611804 FORMER COMPANY: FORMER CONFORMED NAME: PANGEA PETROLEUM CO DATE OF NAME CHANGE: 19880120 FORMER COMPANY: FORMER CONFORMED NAME: POLLOCK PETROLEUM INC DATE OF NAME CHANGE: 19840807 8-K 1 HARCOR ENERGY, INC. - DATED 12/18/97 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) December 18, 1997 HARCOR ENERGY, INC. (Exact name of registrant as specified in its Charter) Delaware (State or other jurisdiction of incorporation) 0-9300 33-0234380 (Commission File Number) (IRS Employer I.D. No.) Five Post Oak Park, Suite 2220 4400 Post Oak Park Houston, TX 77027-3416 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (713) 961-1804 2 Item 2. Disposition of Assets On December 18, 1997 HarCor Energy, Inc. (the "Registrant" and the "Company") announced that it had reached a definitive agreement for the sale of all of its oil and gas assets located outside of California (the "Non-California Assets") to an undisclosed buyer for $13.2 million in cash. This sale is being made pursuant to the bifurcation of the Company's sales process and in conjunction with ongoing efforts to effect the sale of the whole Company as previously announced. Closing is subject to customary title and environmental due diligence and is anticipated to occur by January 15, 1998. The Company anticipates recording an estimated gain of approximately $2.9 million upon closing of the sale. No capital gains taxes are anticipated to be incurred due to the Company's current net operating loss carry-forwards. The Non-California Assets consist of (i) all of the Company's proved developed producing, proved undeveloped, probable and possible reserves in New Mexico, Texas, Alabama and Louisiana; (ii) all of the Company's leasehold interests, working interests in wells currently drilling, seismic data and the associated resale rights, and participation rights in those exploration agreements in its 3-D and 2-D exploration activities in the Hostetter area of South Texas, Reeves County in the West Texas-Permian Basin, the Lapeyrouse area of Louisiana, Polaris Joint Venture and the Gulf Coast Frio AVO Program; and (iii) certain miscellaneous royalty and net-profits interests in various states previously referred to by the Company as the Fund I Royalty Interests. Based on a recent engineering reserve study performed by the Company's independent petroleum engineers, the oil and gas reserves being sold pursuant to this transaction consist of 1,634,000 barrels of oil and 8,553 MMcf of gas with a current 10% present value of $14,836,000. This value is based on flat projected pricing of the recent average 12 month forward pricing of $19.15 per barrel and $2.50 per MMBtu, with adjustments for quality and location. Included in this value is proved undeveloped oil and gas reserves consisting of 1,390,000 barrels of oil and 3,778 MMcf of gas with a 10% present value of $8,774,000. Average daily production relating to these properties during the third quarter of 1997 was 213 BOPD and 4,897 Mcfd as reported. Pursuant to the terms of its 14-7/8% Senior Secured Notes ("Senior Notes") indenture and an intercreditor agreement, the Company is required to use the cash proceeds received upon closing of the sale of assets to immediately repay, to the extent required by its lenders, its indebtedness outstanding under its revolving credit facility. To the extent there are excess cash proceeds remaining after fulfillment of this obligation, or if the Company's lender waives this obligation, excess cash proceeds or total cash proceeds (as the case may be) from a sale of assets must be used to make an offer to redeem a like amount of Senior Notes from the -1- 3 holders thereof at a cost equal to the face value of the Senior Notes. The Company has received initial indications from its lender that it will not require the Company to repay indebtedness outstanding under its revolving credit facility and has requested a waiver of this obligation. Accordingly, upon closing of the sale the Company will immediately commence an offer to redeem $13.2 million of its outstanding Senior Notes from the holders thereof at a cost equal to the face value of the Senior Notes. The holders of the Senior Notes are not required to accept said offer and there can be no assurances that they will do so. Item 7. Financial Statements and Exhibits (b) Pro Forma financial information. (1) The following Pro Forma financial information is included herein as Exhibit 7(b)(1): (i) Unaudited Pro Forma Condensed Consolidated Balance Sheet of HarCor at September 30, 1997 assuming that the disposition of assets described herein had occurred at that date; and (ii) Unaudited Proforma Statements of Operations for the nine-months ended September 30, 1997 and the Year Ended December 31, 1996 assuming that the disposition of assets described herein had occurred at the beginning of such periods. (c) Exhibits 99.1 Press release dated December 18, 1997 announcing definitive agreement for the sale of the Company's Non-California Assets. -2- 4 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 hereunto duly authorized. HarCor Energy, Inc. --------------------- (Registrant) Date: December 23, 1997 /s/ Gary S. Peck --------------------------- Gary S. Peck Vice President, Finance -3- 5 Exhibit 7(b)(1) (b) PRO FORMA CONDENSED FINANCIAL INFORMATION Set forth in the following pages is certain unaudited pro forma condensed financial information with respect to the disposition of the Company's Non-California Assets including an unaudited pro forma balance sheet as of September 30, 1997 and unaudited pro forma statements of operations for the nine months ended September 30, 1997 and the year ended December 31, 1996. The balance sheet data have been prepared on the basis that the disposition of the Company's Non-California Assets and the concurrent redemption of a portion of its 14-7/8% Senior Secured Notes (the "Senior Notes Redemption") had occurred on September 30, 1997. The statements of operations for the year ended December 31, 1996 and the nine months ended September 30, 1997 have been prepared on the basis that the disposition of the Company's Non-California Assets and the Senior Notes Redemption had occurred on January 1, 1996 and January 1, 1997, respectively. The unaudited pro forma financial statements should be read in conjunction with the notes thereto and the consolidated financial statements of HarCor Energy, Inc. The pro forma results of operations are not necessarily indicative of future operations of HarCor Energy, Inc. -4- 6 HARCOR ENERGY, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 1997 (Dollars in Thousands)
Pro Forma ------------------------------ Historical Adjustments Adjusted ---------- ----------- -------- ASSETS Current Assets: Cash ....................................... $ 2,485 $ -- (a,b) $ 2,485 Accounts Receivable ........................ 4,070 -- $ 4,070 Prepaids & Other ........................... 1,455 -- $ 1,455 --------- --------- --------- 8,010 -- 8,010 --------- --------- --------- Property & Equipment, net .................... 81,130 (10,219) (a) 70,911 --------- --------- --------- Other assets.................................. 2,896 (648) (b) 2,248 --------- --------- --------- Total Assets ................................. $ 92,036 $ (10,867) $ 81,169 ========= ========= ========= LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities: Current Portion of Long Term Bank Debt ..... $ 397 $ -- $ 397 Accounts Payable and Accrued Liabilities ... 5,416 -- 5,416 --------- --------- --------- 5,813 -- 5,813 --------- --------- --------- LONG TERM BANK DEBT .......................... 4,903 -- 4,903 --------- --------- --------- 14-7/8% SENIOR SECURED NOTES ................. 52,578 (13,200) (b) 39,378 --------- --------- --------- STOCKHOLDERS' EQUITY: Common Stock & Additional Paid-In Capital .. 52,742 -- 52,742 Accumulated Deficit ........................ (24,000) 2,333 (a,b) (21,667) --------- --------- --------- Total Stockholders' Equity ................... 28,742 2,333 31,075 --------- --------- --------- $ 92,036 $ (10,867) $ 81,169 ========= ========= =========
-5- 7 HARCOR ENERGY, INC. UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS For the Nine Months Ended September 30, 1997 (Dollars in Thousands except Per Share Data)
PRO FORMA ------------------------------ HISTORICAL ADJUSTMENTS ADJUSTED ----------- ------------ ----------- REVENUES: Oil & Gas Sales ................ $ 12,588 $ (3,978)(c) $ 8,610 Plant Revenue................... 4,134 -- $ 4,134 Interest & Other................ 121 -- $ 121 ----------- ---------- ----------- Total Revenue................... 16,843 (3,978) 12,865 ----------- ---------- ----------- COSTS AND EXPENSES: Production Expense.............. 3,063 (1,337)(c) 1,726 Plant Expense................... 2,872 -- 2,872 Engineering & Geological........ 247 (82)(d) 165 DD&A............................ 4,603 (1,497)(c) 3,106 General & Administrative........ 1,884 (622)(d) 1,262 Interest........................ 6,564 (1,620)(e) 4,944 ----------- ---------- ----------- Total Expenses.................. 19,233 (5,158) 14,075 ----------- ---------- ----------- Net Operating Loss before Provision for Income Taxes...... (2,390) 1,180 (1,210) Provision for Income Taxes........ -- -- (f) -- ----------- ---------- ----------- Net Loss.......................... (2,390) 1,180 (1,210) Preferred Dividends............... (60) -- (60) ----------- ---------- ----------- NET LOSS TO COMMON STOCKHOLDERS... $ (2,450) $ 1,180 $ (1,270) =========== ========== =========== NET LOSS TO COMMON STOCKHOLDERS PER SHARE.......... $ (0.16) $ (0.08) =========== =========== WEIGHTED AVERAGE SHARES OUTSTANDING.............. 15,796 15,796 =========== =========== PRODUCTION DATA: Barrels of Oil.................... 259,841 (58,771) 201,070 Mcf of Gas........................ 3,569,515 (1,466,555) 2,102,960 Bbls of NGLs...................... 139,767 -- 139,767
8 HARCOR ENERGY, INC. UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS For the Year Ended December 31, 1996 (Dollars in Thousands except Per Share Data)
Pro Forma ----------------------- Historical Adjustments Adjusted ---------- ----------- -------- REVENUES: Oil and Gas Sales..................... $ 21,716 $ (6,714)(c) $ 15,002 Plant Revenue......................... 6,635 -- $ 6,635 Interest and Other.................... 3,271 -- $ 3,271 -------- -------- -------- Total Revenues........................ 31,622 (6,714) 24,908 -------- -------- -------- COSTS AND EXPENSES: Production Expense.................... 5,134 (2,316)(c) 2,818 Plant Expense......................... 4,017 -- 4,017 Engineering and Geological............ 368 (121)(d) 247 DD&A.................................. 8,172 (1,985)(c) 6,187 General and Administrative............ 3,159 (1,042)(d) 2,117 Interest.............................. 10,067 (2,161)(e) 7,906 Other................................. 368 -- 368 -------- -------- -------- Total Expenses........................ 31,285 (7,625) 23,660 -------- -------- -------- Net Income (Loss) before Provisions for Income Taxes and Extraordinary Item................ 337 912 1,249 Provision for Income Taxes.............. -- -- -- -------- -------- -------- Net Loss before Extraordinary Item...... 337 912 1,249 Extraordinary Item(i)................. (2,135) -- (2,135) -------- -------- -------- Net Loss................................ (1,798) 912 (886) Preferred Dividends..................... (461) -- (461) -------- -------- -------- NET LOSS TO COMMON STOCKHOLDERS......... $ (2,259) $ 912 $ (1,347) ======== ======== ======== NET LOSS TO COMMON STOCKHOLDERS PER SHARE BEFORE EXTRAORDINARY ITEM... $ (0.01) $ 0.07 ======== ======== NET LOSS TO COMMON STOCKHOLDERS PER SHARE AFTER EXTRAORDINARY ITEM........ $ (0.20) $ (0.12) ======== ======== WEIGHTED AVERAGE SHARES OUTSTANDING..... 11,150 11,150 ======== ======== PRODUCTION DATA: Barrels of Oil.......................... 522,527 (151,941) 370,586 Mcf of Gas.............................. 5,795,247 (2,008,248) 3,786,999 Bbls of NGLs............................ 232,519 -- 232,519
(i) Early extinguishment of debt -7- 9 HARCOR ENERGY, INC. NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS September 30, 1997 and December 31, 1996 1. Basis of Presentation The accompanying unaudited pro forma condensed financial statements have been prepared to reflect adjustments to the Company's historical financial statements for: (i) The sale of the Non-California Assets for $13.2 million in cash; (ii) The use of the sales proceeds to redeem a like amount of the Company's 14-7/8% Senior Secured Notes as required pursuant to the terms of an indenture agreement (the "Note Redemption") and assuming that a sufficient number of the holders of the Senior Notes accept the Notes Redemption offer by the Company equivalent to $13.2 million; (iii) The reduction of historical revenues and expenses directly related to the Non-California Assets as previously reported for the periods presented; (iv) The reduction of historical interest expense and associated amortization of deferred financing costs and note accretion directly related to the Note Redemption as described in item (ii) of $13.2 million of the Senior Notes; (v) The estimated reduction of other direct expenses resulting from the sale of the Non-California Assets. The unaudited pro forma balance sheet data are presented as if the sale of the Non-California Assets and related financings occurred on September 30, 1997. The unaudited pro forma statements of operations are presented as if the sale of Non-California Assets occurred on January 1, 1996 for the year-end December 31, 1996 statement, and on January 1, 1997 for the first nine months of 1997 statement. The accompanying unaudited pro forma financial information has been prepared based on the historical results of operations of the Non-California Assets as previously reported in the Company's audited and unaudited financial statements; along with pro forma adjustments, estimates and assumptions deemed by the Company to be appropriate. This unaudited pro forma financial information does not purport to be indicative of the financial position or results of operations which would actually have -8- 10 occurred if the disposition of Non-California Assets had occurred as presented in such statements or which may be obtained in the future. 2. Pro Forma Adjustments The accompanying unaudited pro forma condensed financial statements include the following adjustments: (a) To record the sale of the Non-California Assets for $13,200,000 cash and an estimated gain of $2,981,000 at September 30, 1997; (b) To record the redemption of $13,200,000 of the Senior Notes pursuant to the terms of an indenture agreement and to write-off an amount of deferred financing costs pertaining thereto; (c) To reduce historical oil and gas sales revenues, production expenses and depletion, depreciation and amortization expense directly related to the Non-California Assets as previously reported; (d) To record the estimated reduction of Engineering, Geological and G & A expenses resulting from the sale of the Non-California Assets; (e) To reduce historical interest expense and associated amortization of deferred financing costs and note accretion directly related to the Senior Notes Redemption; (f) The Company does not anticipate any capital gains taxes resulting from the sale of the Non-California Assets due to its net operating loss carry forwards. -9- 11 EXHIBIT INDEX 99.1 Press release dated December 18, 1997 announcing definitive agreement for the sale of the Company's Non-California Assets. EX-99.1 2 PRESS RELEASE DATED 12/18/97 1 EXHIBIT 99.1 [HARCOR ENERGY, INC. LETTERHEAD] NEWS RELEASE December 18, 1997 Contact: Mark Harrington, Chairman Francis Roth, President Fran Reeder, Investor Relations 713-961-1804 HARCOR ENERGY, INC. ANNOUNCES DEFINITIVE AGREEMENT FOR SALE OF NON-CALIFORNIA ASSETS December 18, 1997; Houston, Texas--HarCor Energy, Inc. (NASDAQ/NMS: HARC) announced today the execution of a definitive agreement for the sale of its non-California assets for $13.2 million to an undisclosed buyer. The purchase price represents cash proceeds of approximately $0.81 per HarCor share. Effective date for the transaction is 1/1/98, and closing is anticipated to occur on 1/15/98. Closing is subject to customary title and environmental due diligence. The Company currently anticipates booking a $3 million gain on this transaction. No capital gains taxes are anticipated on the sale due to offset of HarCor's existing net operating loss carry forwards. The sale was made pursuant to the bifurcation of HarCor's sales process. HarCor is continuing discussions with remaining suitors for its California properties. HarCor Energy is a Houston-based independent energy company pursuing risk-managed oil and gas acquisitions for future exploitation. ****** ------------------------------------------------------------------------------ Suite 2220 o Five Post Oak Park o Houston, TX 77027-3413 o 713/961-1804 o Fax 713/961-9773 -----END PRIVACY-ENHANCED MESSAGE-----