-----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, A1Tk8Z0yyf3nlMJt3dtUh6g7UgdZFuS8wvRfP0hXuQwGcJy8KYUTCvHWpIDqkHGE Eo2Zj+tICPSQhT3bhIsiug== 0000899243-01-500967.txt : 20010716 0000899243-01-500967.hdr.sgml : 20010716 ACCESSION NUMBER: 0000899243-01-500967 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20010516 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010713 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MISSION RESOURCES CORP CENTRAL INDEX KEY: 0000319459 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 760437769 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-09498 FILM NUMBER: 1680826 BUSINESS ADDRESS: STREET 1: 1331 LAMAR STREET 2: SUITE 1455 CITY: HOUSTON STATE: TX ZIP: 77010 BUSINESS PHONE: 7134953000 MAIL ADDRESS: STREET 1: 1221 LAMAR STREET 2: STE 1600 CITY: HOUSTON STATE: TX ZIP: 77010-3039 FORMER COMPANY: FORMER CONFORMED NAME: BELLWETHER EXPLORATION CO DATE OF NAME CHANGE: 19920703 8-K 1 d8k.txt FORM 8-K ================================================================================ 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 MAY 16, 2001 Date of Report (Date of earliest event reported) MISSION RESOURCES CORPORATION (Exact name of registrant as specified in its charter) Delaware 000-09498 76-0437769 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 1331 Lamar, Suite 1455 Houston, Texas 77010 (Address of principal executive offices, including zip code) (713) 495-3000 (Registrant's telephone number, including area code) Bellwether Exploration Company (Former name or former address, if changed since last report) ================================================================================ ITEM 1. CHANGES IN CONTROL OF REGISTRANT. Not applicable to this filing. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On May 16, 2001, Bellwether Exploration Company (the "REGISTRANT") completed its merger (the "MERGER") with Bargo Energy Company ("BARGO") pursuant to the Agreement and Plan of Merger executed by the parties on January 24, 2001 (the "MERGER AGREEMENT"). The shareholders of the Registrant approved the Merger at an annual meeting held on May 16, 2001. Bargo's shareholders approved the merger by written consent. The purchase price, including assumed indebtedness, was approximately $220 million. The Registrant paid approximately $139 million, or $1.26 per share for Bargo's fully diluted common stock. The consideration per share of Bargo common stock consisted of $0.45 per share in cash and $0.81 per share in the Registrant's common stock. The purchase price was determined through arms' length negotiation between the parties. The Registrant relied upon borrowings under its credit facility with The Chase Manhattan Bank, as administrative agent on behalf of the lenders thereunder, to pay the cash portion of the Merger consideration. In connection with the Merger, the Registrant changed its name to Mission Resources Corporation and its NASDAQ ticker symbol to MSSN. A description of (i) the nature of any material relationship between Bargo and the Registrant or any of the Registrant's affiliates, directors or officers, or any associates of such directors and officers and (ii) Bargo's assets as well as the use the Registrant intends to make of those assets, is contained in the joint proxy statement/prospectus contained in the Registrant's Registration Statement on Form S-4 (File No. 333-54798), which is incorporated herein by reference. ITEM 3. BANKRUPTCY OR RECEIVERSHIP. Not applicable to this filing. ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS. Not applicable to this filing. ITEM 5. OTHER EVENTS. On May 29, 2001, Mission Resources Corporation issued a press release announcing its sale of $125 million of 10 7/8% senior subordinated notes due April 2001 through a Rule 144A private placement offering. ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS. Not applicable to this filing. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Audited Financial Statements of Bargo Energy Company The Financial Statements of Bargo Energy Company contained in the Registrant's Registration Statement on Form S-4 (File No. 333-54798) are incorporated herein by reference. Unaudited Interim Financial Statements of Bargo Energy Company Consolidated Balance Sheet as of March 31, 2001; Consolidated Statements of Operations and Cash Flows for the three months ended March 31, 2001 and 2000; and Notes to Consolidated Financial Statements (Incorporated by reference to Bargo Exploration Company's Quarterly Report on Form 10-QSB for the period ended March 31, 2001) 2 (b) PRO FORMA FINANCIAL INFORMATION UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL AND OTHER DATA The unaudited pro forma condensed combined statements of operations of Mission Resources for the year ended December 31, 2000 and the three month period ended March 31, 2001 give effect, using the purchase method of accounting, to the merger of Bellwether with Bargo and the issuance of $125 million of 10 7/8% senior subordinated notes as if they had occurred at the beginning of the period presented. The unaudited pro forma condensed combined statement of operations also gives effect to Bellwether's sale of oil and gas properties during the quarter ended December 31, 2000, Bargo's sale of its Coles Levee California properties, Bargo's February 2001 auction sale of non-core oil and gas properties and Bargo's acquisition of its Texaco and East Texas properties, as if they had occurred at the beginning of the periods presented. The unaudited pro forma condensed combined balance sheet of Mission Resources gives effect, using the purchase method of accounting, to the merger and the issuance of $125 million of 10 7/8% senior subordinated notes as if they occurred on March 31, 2001. The following unaudited pro forma financial data are provided for informational purposes only. The unaudited pro forma financial data are presented based upon the historical consolidated financial statements of Bellwether and Bargo and should be read in conjunction with such financial statements and the related notes thereto. The unaudited pro forma financial data are based upon assumptions and include adjustments as explained in the notes to the unaudited pro forma condensed combined financial statements, and the actual recording of the transactions could differ. The unaudited pro forma financial data are not necessarily indicative of the financial results that would have occurred had the merger or the offering been effective on and as of the dates indicated and should not be viewed as indicative of future operations. 3 MISSION RESOURCES CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2000 (amounts in thousands, except per share data)
Note Bellwether Bargo Issuance --------------------------------- --------------------------------- and Merger Mission Pro Forma Pro Forma Pro Forma Resources Historical Adjustment Adjusted Historical Adjustment Adjusted Adjustments Pro Forma ---------- ---------- -------- ---------- ---------- -------- ----------- --------- (audited) (audited) Revenues: Oil and gas revenues... $112,253 $(23,174)(a) $ 89,079 $124,777 $ 5,122 (c) $129,899 $ -- $218,978 Gas plant revenues..... 6,070 -- 6,070 -- -- -- -- 6,070 Interest and other income................ 957 -- 957 255 -- 255 -- 1,212 -------- -------- -------- -------- ------- -------- -------- -------- Total revenues....... 119,280 (23,174) 96,106 125,032 5,122 130,154 -- 226,260 Costs and expenses: Production expenses.... 30,509 (4,869)(a) 25,640 40,002 1,625 (c) 41,627 -- 67,267 Transportation costs... 270 -- 270 277 -- 277 -- 547 Gas plant expenses..... 2,677 -- 2,677 -- -- -- -- 2,677 Depreciation, depletion and amortization...... 32,654 (5,564)(a) 27,090 18,707 1,425 (c) 20,132 (45,668)(d) 46,503 (e) 48,057 Disposition of hedges................ 8,671 -- 8,671 -- -- -- -- 8,671 General and administrative expenses.............. 9,138 (847)(y) 8,291 10,341 748 (c) 11,089 (629)(g) 167 (z) 18,918 Interest expense....... 15,375 (902)(a) 14,473 14,619 2,685 (c) 17,304 (521)(h) 13,594 (cc) 595 (k) (4,743)(w) (242)(gg) 842 (f) 41,302 Amortization of goodwill and intangible assets..... -- -- -- -- -- -- 2,048 (i) 2,048 -------- -------- -------- -------- ------- -------- -------- -------- Total expenses....... 99,294 (12,182) 87,112 83,946 6,483 90,429 11,946 189,487 -------- -------- -------- -------- ------- -------- -------- -------- Income before income taxes................. 19,986 (10,992) 8,994 41,086 (1,361) 39,725 (11,946) 36,773 Provision (benefit) for income taxes...... (12,222) (4,177)(b) (16,399) 16,208 (1,112)(b) 15,096 (3,761)(b) (5,064) -------- -------- -------- -------- ------- -------- -------- -------- Net income from continuing operations.. 32,208 (6,815) 25,393 24,878 (249) 24,629 (8,185) 41,837 Redeemable preferred stock dividends, including accretion.... -- -- -- (6,035) -- (6,035) 6,035 (j) -- -------- -------- -------- -------- ------- -------- -------- -------- Net income allocable to common shareholders.... $ 32,208 $ (6,815) $ 25,393 $ 18,843 $ (249) $ 18,594 $ (2,150) $ 41,837 ======== ======== ======== ======== ======= ======== ======== ======== Net income per share.... $ 2.32 $ 1.83 $ 1.79 ======== ======== ======== Net income per share-- diluted................ $ 2.27 $ 1.79 $ 1.77 ======== ======== ======== Weighted average common shares outstanding..... 13,899 13,899 9,460 (x) 23,359 ======== ======== ======== ======== Weighted average common shares outstanding-- diluted................ 14,175 14,175 9,460 (x) 23,635 ======== ======== ======== ========
See accompanying notes to unaudited pro forma condensed combined financial statements. 4 MISSION RESOURCES CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS THREE MONTH PERIOD ENDED MARCH 31, 2001 (amounts in thousands, except per share data)
Note Bellwether Bargo Issuance ------------------------------- ---------------------------------- and Merger Mission Pro Forma Pro Forma Pro Forma Resources Historical Adjustment Adjusted Historical Adjustment Adjusted Adjustments Pro Forma ----------- ---------- -------- ----------- ---------- -------- ----------- --------- (unaudited) (unaudited) Revenues: Oil and gas revenues... $31,658 $ -- $31,658 $31,428 $(2,465)(c) $28,963 $ -- $60,621 Gas plant revenues..... 1,609 -- 1,609 -- -- -- -- 1,609 Interest and other income................ 548 -- 548 124 -- 124 -- 672 ------- ------- ------- ------- ------- ------- ------- ------- Total revenues....... 33,815 -- 33,815 31,552 (2,465) 29,087 -- 62,902 ------- ------- ------- ------- ------- ------- ------- ------- Costs and expenses: Production expenses.... 7,926 -- 7,926 10,835 (733)(c) 10,102 -- 18,028 Transportation costs... 40 -- 40 27 -- 27 -- 67 Gas plant expenses..... 750 -- 750 -- -- -- -- 750 Depreciation, depletion and amortization...... 7,938 -- 7,938 3,247 (179)(c) 3,068 (10,553)(d) 13,238 (e) 13,691 Commodity derivative loss.................. -- -- -- 1,410 -- 1,410 -- 1,410 Mining venture costs... 779 -- 779 -- -- -- -- 779 General and administrative expenses.............. 2,549 -- 2,549 2,548 -- 2,548 (200)(g) 42 (z) (863)(ee) 4,076 Interest expense....... 3,964 -- 3,964 1,321 (297)(c) 1,024 (130)(h) 3,398 (cc) 148 (k) (441)(w) (61)(gg) 210 (f) 8,112 Amortization of goodwill and intangible assets..... -- -- -- -- -- -- 512 (i) 512 ------- ------- ------- ------- ------- ------- ------- ------- Total expenses....... 23,946 23,946 19,388 (1,209) 18,179 5,300 47,425 ------- ------- ------- ------- ------- ------- ------- ------- Income before income taxes................. 9,869 -- 9,869 12,164 (1,256) 10,908 (5,300) 15,477 Provision (benefit) for income taxes...... 3,473 -- 3,473 5,481 (1,336)(b) 4,145 (1,819)(b) 5,799 ------- ------- ------- ------- ------- ------- ------- ------- Net income from continuing operations.. 6,396 -- 6,396 6,683 80 6,763 (3,481) 9,678 Redeemable preferred stock dividends, including accretion.... -- -- -- (1,563) -- (1,563) 1,563 (j) -- ------- ------- ------- ------- ------- ------- ------- ------- Net income allocable to common shareholders.... $ 6,396 $ -- $ 6,396 $ 5,120 $ 80 $ 5,200 $(1,918) $ 9,678 ======= ======= ======= ======= ======= ======= ======= ======= Net income per share.... $ 0.46 $ 0.46 $ 0.41 ======= ======= ======= Net income per share-- diluted................ $ 0.44 $ 0.44 $ 0.40 ======= ======= ======= Weighted average common shares outstanding..... 14,028 14,028 9,460 (x) 23,488 ======= ======= ======= ======= Weighted average common shares outstanding-- diluted................ 14,493 14,493 9,460 (x) 23,953 ======= ======= ======= =======
See accompanying notes to unaudited pro forma condensed combined financial statements. 5 MISSION RESOURCES CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET MARCH 31, 2001 (amounts in thousands) ASSETS
Note Bellwether Bargo Issuance Mission ------------------------------- ------------------------------- and Merger Resources Pro Forma Pro Forma Pro Forma Pro Forma Historical Adjustment Adjusted Historical Adjustment Adjusted Adjustments As Adjusted ----------- ---------- -------- ----------- ---------- -------- ----------- ----------- (unaudited) (unaudited) Current assets: Cash and cash equivalents........... $ 9,060 $ -- $ 9,060 $ 63 $ -- $ 63 $ 1,875 (bb) $ 10,998 Accounts receivable and accrued revenues.............. 19,558 -- 19,558 14,045 -- 14,045 -- 33,603 Prepaid expenses and other................. 913 -- 913 -- -- -- 250 (z) 1,163 -------- ------ -------- -------- ------ -------- --------- -------- Total current assets.............. 29,531 -- 29,531 14,108 -- 14,108 2,125 45,764 -------- ------ -------- -------- ------ -------- --------- -------- Property and equipment, at cost: Oil and gas properties (full cost)........... 443,818 -- 443,818 131,917 -- 131,917 (131,917)(l) 259,820 (m) 703,638 Gas plant facilities... 18,930 -- 18,930 -- -- -- -- 18,930 -------- ------ -------- -------- ------ -------- --------- -------- 462,748 462,748 131,917 131,917 127,903 722,568 Accumulated depreciation, depletion and amortization--oil and gas................... (300,693) -- (300,693) (27,711) -- (27,711) 27,711 (l) (300,693) Accumulated depreciation, depletion and amortization--gas plant................. (7,652) -- (7,652) -- -- -- -- (7,652) -------- ------ -------- -------- ------ -------- --------- -------- Net property, plant and equipment......... 154,403 -- 154,403 104,206 -- 104,206 155,614 414,223 Leasehold, furniture and equipment......... 2,822 -- 2,822 878 -- 878 (878)(l) 2,822 Accumulated depreciation.......... (524) -- (524) (213) -- (213) 213 (l) (524) -------- ------ -------- -------- ------ -------- --------- -------- 2,298 -- 2,298 665 -- 665 (665) 2,298 -------- ------ -------- -------- ------ -------- --------- -------- Investment.............. 6,246 -- 6,246 -- -- -- -- 6,246 Goodwill, net of accumulated amortization........... -- -- -- 1,542 -- 1,542 (1,542)(n) 20,326 (aa) 20,326 Loan costs, net of accumulated amortization........... 1,081 -- 1,081 2,475 -- 2,475 (3,556)(p) 2,525 (q) 3,571 (dd) 6,096 Intangible assets....... -- -- -- -- -- -- 285 (o) 285 Deferred income tax asset.................. 20,577 -- 20,577 1,108 -- 1,108 (21,685)(r) -- Other assets............ 4,158 -- 4,158 641 -- 641 -- 4,799 -------- ------ -------- -------- ------ -------- --------- -------- Total assets......... $218,294 $ -- $218,294 $124,745 $ -- $124,745 $ 156,998 $500,037 ======== ====== ======== ======== ====== ======== ========= ========
See accompanying notes to unaudited pro forma condensed combined financial statements. 6 MISSION RESOURCES CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET, Continued MARCH 31, 2001 (amounts in thousands) LIABILITIES AND STOCKHOLDERS' EQUITY
Note Bellwether Bargo Issuance Mission ------------------------------- ---------------------------------- and Merger Resources Pro Forma Pro Forma Pro Forma Pro Forma Historical Adjustment Adjusted Historical Adjustment Adjusted Adjustments As Adjusted ----------- ---------- -------- ----------- ---------- -------- ----------- ----------- (unaudited) (unaudited) Current liabilities: Accounts payable and accrued liabilities.... $ 44,220 $ -- $ 44,220 $ 10,106 $ -- $ 10,106 $ 14,721 (s) $ 69,047 Accrued income taxes payable................ 1,170 -- 1,170 11,842 (11,800)(b) 42 (411)(t) 801 -------- -------- -------- -------- ------- -------- -------- -------- Total current liabilities......... 45,390 -- 45,390 21,948 (11,800) 10,148 14,310 69,848 -------- -------- -------- -------- ------- -------- -------- -------- Long-term debt.......... 115,354 -- 115,354 20,000 -- 20,000 126,875 (bb) (7,442)(ff) 254,787 Deferred income tax liability.............. -- -- -- -- -- -- 60,207 (u) (21,685)(r) 38,522 Other liabilities....... 6,359 -- 6,359 -- -- -- -- 6,359 Redeemable preferred stock.................. -- -- -- 59,262 -- 59,262 (59,262)(v) -- Stockholders' equity: Common stock........... 144 -- 144 921 -- 921 (921)(v) 95 (x) 239 Additional paid-in capital............... 82,680 -- 82,680 6,878 -- 6,878 (6,878)(v) 79,905 (x) 162,585 Retained earnings (deficit)............. (19,541) -- (19,541) 17,776 11,800 (b) 29,576 (29,576)(v) (20,211) (670)(t) Other comprehensive income................ (10,187) -- (10,187) -- -- -- -- (10,187) Treasury stock......... (1,905) -- (1,905) (2,040) -- (2,040) 2,040 (v) (1,905) -------- -------- -------- -------- ------- -------- -------- -------- Total stockholders equity................. 51,191 -- 51,191 23,535 11,800 35,335 43,995 130,521 -------- -------- -------- -------- ------- -------- -------- -------- Total liabilities and stockholders' equity... $218,294 $ -- $218,294 $124,745 $ -- $124,745 $156,998 $500,037 ======== ======== ======== ======== ======= ======== ======== ========
See accompanying notes to unaudited pro forma condensed combined financial statements. 7 MISSION RESOURCES CORPORATION NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (a) To record the effect of Bellwether's oil and gas property sales during 2000 as if the sales had occurred at the beginning of the years presented. (b) To adjust income taxes for pro forma adjustments for the periods presented utilizing the applicable statutory tax rate. (c) To record the following Bargo divestitures and acquisition as if they had occurred at the beginning of the periods presented (1) Coles Levee divestiture (closed January 2001), (2) Texaco acquisition (closed March 2000) and (3) February auction divestitures (closed February 2001). (d) To record the reversal of Bargo's and Bellwether's historical depreciation, depletion and amortization expense pertaining to the companies' oil and gas properties and goodwill associated with Bargo's historical acquisitions. (e) To record pro forma depreciation, depletion and amortization on the combined estimated fair value of the depreciable and depletable assets of Bellwether and Bargo for the periods presented. Full-cost ceiling tests were performed on the combined basis resulting in no incremental impairment of oil and gas properties for the periods presented. (f) To record the amortization of Mission Resources' debt issue costs incurred in connection with the merger for the periods presented. The credit facility issue costs will be amortized over a period of three years. (g) To adjust fees Mission Resources will be charged in connection with its accounting and technology service agreement with a subsidiary of Torch, net of costs Bargo had paid for similar services with Novistar and another outsource service provider. Note that severance charges related to Bargo's employees of $766,000 and non-cash charges for the change in vesting dates of Bellwether's outstanding unvested options of approximately $1,587,000 will be incurred by Mission Resources in connection with the merger. The charges are considered non- recurring therefore pro forma adjustments have properly not been recorded for such transactions in accordance with SEC accounting guidelines. (h) To record interest expense for debt incurred by Mission Resources under the revolving credit facility in connection with the Bargo acquisition for the periods presented utilizing an interest rate of 7%. The effect on pre-tax income for the year 2000 of a 1/8% variance is $53,000. (i) To record the amortization of (1) goodwill, over 10 years, and (2) intangible assets, over 19 years, associated with the acquisition of Bargo pursuant to the purchase method of accounting. (j) To record the reversal of Bargo's dividends on preferred stock, as such preferred stock was redeemed for cash prior to closing the acquisition of Bargo. (k) To record the amortization of Mission Resources' 10 7/8% senior subordinated notes Series B issuance costs. Such costs will be amortized over the six-year term of the notes. (l) To reverse historical Bargo property and equipment balances and the related accumulated depreciation, depletion and amortization pursuant to the purchase method of accounting. 8 (m) To record the estimated pro forma allocation of the purchase price of the acquisition of Bargo, including estimated merger costs, to properties and equipment in accordance with the purchase method of accounting. The following is a calculation and allocation of the purchase price to the assets acquired and liabilities assumed based on their relative fair value: Calculation of Purchase Price (dollars in thousands, except per share data):
3/31/2001 --------- Estimated number of shares of common stock to be issued (in thousands).......................................................... 9,460 Average of Bellwether common stock 20 days prior to closing.......... $ 8.46 -------- Fair value of estimated common stock to be issued.................... $ 80,000 Add: Cash, net of $3.6 million received from the conversion, during the merger, of Bargo's outstanding options and warrants............... 56,412 Redemption of Bargo's preferred stock and accrued dividends of $10.1 million at May 16, 2001..................................... 61,145 Bargo debt assumed by Bellwether................................... 20,000 Deferred income tax liability incurred in connection with merger... 59,100 -------- 276,657 Estimated merger costs, excluding Mission Resources' debt issuance costs............................................................. 8,625 -------- $285,282 Mission Resources' debt issuance costs............................. 2,525 -------- Purchase price..................................................... $287,807 ========
Allocation of Purchase Price (dollars in thousands): Current assets....................................................... $ 14,358 Other assets....................................................... 641 Properties and equipment including $4.1 million of unevaluated properties........................................................ 259,820 Goodwill........................................................... 20,326 Intangible Assets.................................................. 285 Current liabilities................................................ (10,148) -------- $285,282 ========
For financial accounting purposes, Bellwether allocated $259.8 million of the purchase price to properties and equipment and $20.6 million to goodwill and intangible assets. The allocation to property and equipment was made based on the present value, discounted at 15%, of future net revenues attributable to estimated total proved reserves. Prices used in the allocation of property and equipment were the December 31, 2000 forward prices obtained from third-party sources and are as follows:
Oil per Bbl Gas per Mcf ----------- ----------- 2001................................................. $24.86 $6.49 2002................................................. 22.84 4.48 2003................................................. 21.73 3.87 2004................................................. 21.30 3.77 2005................................................. 21.06 3.77 2006................................................. 20.82 3.79 2007................................................. 20.72 3.83 2008................................................. 20.72 3.87 2009................................................. 20.72 3.92 2010................................................. 20.72 3.96 Thereafter........................................... 20.72 3.96
9 Costs were escalated at 2.4% per annum. The balance of $20.6 million allocated to goodwill and intangible assets reflects the value of the anticipated benefits to Mission Resources of the merger. The purchase price allocation is subject to changes in: . the fair value of Bargo's working capital and other assets and liabilities on the effective date; and . the actual merger costs incurred. Management does not believe the final purchase price allocation will differ materially from the estimated purchase price allocation. (n) To reverse goodwill associated with Bargo's previous acquisitions, pursuant to the purchase method of accounting. (o) To record the intangible asset equal to the value of experienced management resources brought to Mission Resources from Bargo. Such asset will be amortized over a period of 19 years. (p) To record the reversal of the capitalized debt issuance costs related to Bellwether's and Bargo's debt facilities which will be retired in connection with the formation of Mission Resources. A new credit facility was entered into simultaneously with the merger of Bellwether with Bargo (see footnote (q)). (q) To record Mission Resources' debt issuance costs associated with the merger. Mission Resources' credit facility costs will be amortized over a period of three years (see footnote (f)). (r) To net Bellwether's and Bargo's historical deferred income tax asset against Mission Resources' deferred income tax liability. (s) To record the liabilities associated with the merger, credit facility, issuance of $125 million of 10 7/8% senior subordinated notes, and other related costs, consisting primarily of investment banker fees and financing costs. (t) To record the write-off of Bellwether's historical credit facility loan costs and the related tax effect. Such credit facility will be retired in connection with the formation of Mission Resources. (u) To record the incremental deferred income tax liability resulting from the basis allocated to the Bargo oil and gas properties in connection with the merger. (v) To record the reversal of Bargo's owners' equity in accordance with the purchase method of accounting. (w) To record the reversal of Bellwether's and Bargo's historical credit facility amortization because Mission Resources will be establishing a new credit line. (x) To reflect the issuance of Mission Resources' common stock pursuant to the merger agreement using a stock price of $8.46 per share. (y) To adjust accounting and technology service fees paid to Novistar, a subsidiary of Torch, in connection with properties sold during the 4th quarter of 2000 as if the sale had occurred at January 1, 2000. 10 (z) To record the prepaid asset related to the eighteen-month non-compete agreement between Mission and the Chairman and Chief Executive Officer of Bargo, assuming Mission Resources elects to make such payment and recognize the related amortization. (aa) To record goodwill associated with the acquisition of Bargo pursuant to the purchase method of accounting. Goodwill will be amortized over a period of 10 years. In evaluating the recovery of goodwill, Mission Resources will compare the undiscounted future cash flows of its operations to the historical value of its net assets. An impairment of goodwill is measured as the excess in the historical value of the company's net assets over the undiscounted future cash flows of operations. (bb) To record Mission Resources' issuance of 10 7/8% senior subordinated notes Series B that mature April 2007 and to record the bond premium. (cc) To record interest expense in connection with Mission Resources' issuance of 10 7/8% senior subordinated notes Series B that mature April 2007. (dd) To record issuance costs for Mission Resources' issuance of 10 7/8% senior subordinated notes Series B that mature April 2007. (see note k) (ee) To reverse general and administrative merger related costs incurred by Bargo in the first quarter of 2001. (ff) To record additional monies borrowed by Bellwether in conjunction with the merger utilizing Mission's new credit facility. (gg) To record the amortization expense on the bond premium. The bond premium will be amortized over the life of the 10 7/8% senior subordinated notes Series B. 11 Unaudited Pro Forma Supplemental Oil and Natural Gas Disclosure The following tables set forth certain unaudited pro forma information concerning Mission Resources' proved oil and natural gas reserves at December 31, 2000, giving effect to the merger of Bellwether with and into Bargo and the Coles Levee California properties divestiture by Bargo as if they had occurred on January 1, 2000. There are numerous uncertainties inherent in estimating the quantities of proved reserves and projecting future rates of production and timing of development expenditures. The following reserve data represent estimates only and should not be construed as being exact. The proved oil and natural gas reserve information is as of December 31, 2000 and reflects prices and costs in effect as of such date. Reserves:
Bellwether Bargo Mission Resources --------------- ---------------- ------------------ Oil Gas Oil Gas Oil Gas (MBbl) (MMcf) (MBbl) (MMcf) (MBbl) (MMcf) ------ ------- ------- ------- -------- -------- Pro Forma Reserves at January 1, 2000................... 20,278 93,168 58,536 102,570 78,814 195,738 Revisions of previous estimates.............. 411 (21,291) 1,296 (16,545) 1,707 (37,836) Extensions and discoveries............ 617 18,418 15 6,251 632 24,669 Production.............. (2,170) (15,566) (4,047) (7,363) (6,217) (22,929) Purchases/sales of reserves in-place...... -- -- (21,556) (8,833) (21,556) (8,833) ------ ------- ------- ------- -------- -------- Reserves at December 31, 2000................... 19,136 74,729 34,244 76,080 53,380 150,809 ====== ======= ======= ======= ======== ========
Standard Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves (amounts in thousands):
Bellwether Bargo Mission Resources ---------- ---------- ----------------- Future cash inflows................ $1,124,753 $1,614,376 $2,739,129 Future production costs............ (264,363) (562,072) (826,435) Future income taxes................ (220,932) (340,937) (561,869) Future development costs........... (64,469) (32,455) (96,924) ---------- ---------- ---------- Future net cash flows.............. 574,989 678,912 1,253,901 10% discount factor................ (151,897) (297,977) (449,874) ---------- ---------- ---------- Standard measure of discounted future net cash flows............. $ 423,092 $ 380,935 $ 804,027 ========== ========== ==========
Changes to Standard Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves (amounts in thousands):
Bellwether Bargo Mission Resources ---------- -------- ----------------- Standard measure at January 1, 2000.. $ 155,356 $389,311 $ 544,667 Sales, net of production costs....... (63,439) (92,173) (155,612) Purchases/sales of reserves in- place............................... 28,389 73 28,462 Net change in prices and production costs............................... 352,068 64,751 416,819 Net change in income taxes........... (127,875) (32,393) (160,268) Extensions, discoveries and improved recovery, net of future production and development costs............... 56,283 37,874 94,157 Changes in estimated future development costs................... (6,932) -- (6,932) Development cost incurred during the period.............................. 35,425 5,230 40,655 Revisions of quality estimates....... (53,058) 1,711 (51,347) Accretion of discount................ 17,019 6,551 23,570 Changes in production rates and other............................... 29,856 -- 29,856 --------- -------- --------- Standard measure at December 31, 2000................................ $ 423,092 $380,935 $ 804,027 ========= ======== =========
12 (c) EXHIBITS. EXHIBIT NUMBER TITLE OF DOCUMENT - ------- ----------------- 2.1 Agreement and Plan of Merger between Bellwether Exploration Company and Bargo Energy Company dated as of January 24, 2001 (incorporated by reference to Annex A to the joint proxy statement/ prospectus contained in the Registrant's Registration Statement on Form S-4, File No. 333-54798) 23.1 Consent of PricewaterhouseCoopers LLP 23.2 Consent of Arthur Andersen LLP 23.3 Consent of Netherland Sewell & Associates, Inc. 23.4 Consent of T.J. Smith & Company, Inc. 99.1 Press release of Mission Resources Corporation dated May 29, 2001 announcing its sale of $125 million of 10 7/8% senior subordinated notes due April 2001 through a Rule 144A private placement offering. ITEM 8. CHANGE IN FISCAL YEAR. Not applicable to this filing. ITEM 9. REGULATION FD DISCLOSURE. Not applicable to this filing. 13 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. MISSION RESOURCES CORPORATION By: /s/ Ann Kaesermann ------------------------------- Dated: July 12, 2001 Ann Kaesermann, Vice President - Chief Accounting Officer 14 EX-23.1 2 dex231.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference of our report dated March 1, 2001 which appears in the Registration Statement on Form S-4 (No. 333-54798) of Mission Resources Corporation relating to the financial statements of Bargo Energy Company, in the Current Report on Form 8-K of Mission Resources Corporation dated May 16, 2001. PricewaterhouseCoopers LLP Houston, TX July 12, 2001 EX-23.2 3 dex232.txt CONSENT OF ARTHUR ANDERSEN LLP Exhibit 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our report dated April 28, 2000 included in Bargo Energy Company's Registration File Number 333-54798 on Form S-4 and to all references to our Firm included in this registration statement. /s/ ARTHUR ANDERSEN LLP Houston, Texas July 12, 2001 EX-23.3 4 dex233.txt CONSENT OF NETHERLAND SEWELL & ASSOCIATES INC. EXHIBIT 23.3 [LOGO APPEARS HERE] CONSENT OF NETHERLAND, SEWELL & ASSOCIATES, INC. As independent oil and gas consultants, Netherland, Sewell & Associates, Inc. hereby consents to the use of our reserve report as of January 1, 2001 and to all references to our firm included in or made part of the Mission Resources Corporation's Form 8-K to be filed with the Securities and Exchange Commission on or about July 12, 2001. NETERLAND, SEWELL & ASSOCIATES, INC. By: /s/ DANNY D. SIMMONS ---------------------------------- Danny D. Simmons Senior Vice-President July 12, 2001 Houston, Texas EX-23.4 5 dex234.txt CONSENT OF TJ SMITH & COMPANY INC. EXHIBIT 23.4 T.J. SMITH & COMPANY, INC. OIL AND GAS CONSULTING 1331 LAMAR, SUITE 1340 HOUSTON, TEXAS 77010-3027 TEL: (713) 651-0651 FAX: (713) 655-7613 CONSENT OF T.J. SMITH & COMPANY, INC. As independent oil and gas consultants, T.J. Smith & Company, Inc. hereby consents to the use of our reserve report dated as of December 31, 2000 and to all references to our firm included in or made a part of the Mission Resources Corporation's Form 8-K to be filed with the Securities and Exchange Commission on or about July 12, 2001. T. J. Smith & Company, Inc. By: /s/ T.J. SMITH -------------------------- T.J. Smith Houston, Texas July 12, 2001 EX-99.1 6 dex991.txt PRESS RELEASE EXHIBIT 99.1 [LOGO APPEARS HERE] Mission Resources Corporation 1331 Lamar, Suite 1455 Houston, Texas 77010 - 3039 NEWS RELEASE - -------------------------------------------------------------------------------- For Immediate Release Contact: May 29, 2001 Lance L. Weaver - Director, Investor Relations and Financial Analysis weaverl@mrcorp.com (713) 495-3061 MISSION RESOURCES SELLS $125 MILLION OF SENIOR SUBORDINATED NOTES HOUSTON - Mission Resources Corporation (NASDAQ: MSSN) announced today it sold $125.0 million of 10 7/8% senior subordinated notes due in April 2007 through a Rule 144A private placement offering. The notes were issued at 101.5% of par with a yield of 10.53%. Interest is payable on April 1 and October 1, commencing October 1, 2001. Net proceeds from the sale of the senior subordinated notes will be used to repay outstanding senior indebtedness under Mission's revolving credit facility. Total bank debt will be reduced to $69 million under a new borrowing base commitment of $162.5 million. The terms of the notes are substantially identical to the $100 million of 10 7/8% senior subordinated notes due 2007 that were issued in 1997. The Company will have the right to redeem the notes prior to maturity, subject to certain conditions, consistent with the terms of the existing bonds. The notes have not been registered under the Securities Act of 1933 and may not be sold in the United States without registration or an applicable exemption from registration requirements. J.P. Morgan and Merrill Lynch & Co. were joint book-running managers for the sale. Mission Resources Corporation is an independent oil and gas exploration and production company headquartered in Houston, Texas with oil and gas properties located in three core areas: the onshore Gulf Coast, the Gulf of Mexico and the Permian Basin. ### This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurances that forecasted results will be achieved. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein are referenced in the Company's annual report and 10-K for year-end 2000 and current reports and registration statements filed with the Securities and Exchange Commission. -----END PRIVACY-ENHANCED MESSAGE-----