-----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, K/JcZHjqnLKJ/yNmwknyukv1ZiPg3GrMMHYa0+gscHMJ1C5Fh9WZk43xxA7tDu5H miCHUCxkD1objvjDMOLriA== /in/edgar/work/20000526/0000950129-00-002655/0000950129-00-002655.txt : 20000919 0000950129-00-002655.hdr.sgml : 20000919 ACCESSION NUMBER: 0000950129-00-002655 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000321 ITEM INFORMATION: FILED AS OF DATE: 20000526 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARGO ENERGY CO CENTRAL INDEX KEY: 0000051072 STANDARD INDUSTRIAL CLASSIFICATION: [1311 ] IRS NUMBER: 870239185 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-08609 FILM NUMBER: 644353 BUSINESS ADDRESS: STREET 1: 700 LOUISIANA, SUITE 3700 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7132369792 MAIL ADDRESS: STREET 1: 700 LOUISIANA SUITE 3700 CITY: HOUSTON STATE: TX ZIP: 77002 FORMER COMPANY: FORMER CONFORMED NAME: FUTURE PETROLEUM CORP/UT/ DATE OF NAME CHANGE: 19940401 FORMER COMPANY: FORMER CONFORMED NAME: INTERMOUNTAIN EXPLORATION CO DATE OF NAME CHANGE: 19920703 8-K/A 1 BARGO ENERGY COMPANY - DATED MARCH 31, 2000 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 1 Form 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): March 31, 2000 Commission file number 0-8609 Bargo Energy Company (Exact name of small business issuer as specified in charter) Texas 87-0239185 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 700 Louisiana, Suite 3700 Houston, Texas 77002 (Address of principal executive offices, including zip code (713)236-9792 (Issuer's telephone number, including area code) Not Applicable (Former name and former address, if changed since last report) 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. BARGO ENERGY COMPANY INDEX TO FINANCIAL STATEMENTS (a) Financial Statements of Business Acquired Report of Independent Public Accountants F-2 Historical Summaries of Revenues and Direct Operating Expenses F-3 Notes to Historical Summaries and Direct Operating Expenses F-4 (b) Pro Forma Financial Information Unaudited Pro Forma Financial Information PF-1 Notes to Unaudited Pro Forma Financial Information PF-4
(c) Exhibits 2.1 Purchase and Sale Agreement between Texaco Exploration & Production Inc. and Bargo Petroleum Corporation (Incorporated by reference from Exhibit 2.1 to the Company's Current Report of Form 8-K filed with the Securities and Exchange Commission on April 17, 2000). * 2.2 Asset Purchase Agreement between Four Star Oil & Gas Company and Bargo Petroleum Corporation (Incorporated by reference from Exhibit 2.2 to the Company's Current Report of Form 8-K filed with the Securities and Exchange Commission on April 17, 2000). * 2.3 Asset Purchase Agreement between McFarland Energy, Inc. and Bargo Petroleum Corporation (Incorporated by reference from Exhibit 2.3 to the Company's Current Report of Form 8-K filed with the Securities and Exchange Commission on April 17, 2000). * * Confidential treatment has been requested. 3 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders of Bargo Energy Company: We have audited the accompanying statements of combined revenues and direct operating expenses of the oil and gas properties purchased by Bargo Energy Company from Texaco Exploration and Production Inc., Four Star Oil and Gas Company and McFarland Energy, Inc. (collectively, Texaco), for the years ended December 31, 1999 and 1998. These statements are the responsibility of Texaco's management. Our responsibility is to express an opinion on these statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. The accompanying statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in Bargo Energy Company's Form 8-K and are not intended to be a complete financial presentation of the properties described above. In our opinion, the statements referred to above present fairly, in all material respects, the combined revenues and direct operating expenses of the oil and gas properties purchased by Bargo Energy Company from Texaco for the years ended December 31, 1999 and 1998, in conformity with accounting principles generally accepted in the United States. ARTHUR ANDERSEN LLP Houston, Texas April 28, 2000 F-2 4 BARGO ENERGY COMPANY STATEMENTS OF COMBINED REVENUES AND DIRECT OPERATING EXPENSES OF THE OIL AND GAS PROPERTIES PURCHASED BY BARGO ENERGY COMPANY FROM TEXACO (In Thousands)
Three Months Year Ended Ended March 31 December 31 ------------------- ------------------- 2000 1999 1999 1998 -------- -------- -------- -------- (Unaudited) REVENUES $ 23,950 $ 12,677 $ 70,213 $ 64,090 DIRECT OPERATING EXPENSES 7,865 7,953 31,479 38,397 -------- -------- -------- -------- REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 16,085 $ 4,724 $ 38,734 $ 25,693 ======== ======== ======== ========
The accompanying notes are an integral part of these financial statements. F-3 5 BARGO ENERGY COMPANY NOTES TO STATEMENTS OF COMBINED REVENUES AND DIRECT OPERATING EXPENSES OF THE OIL AND GAS PROPERTIES PURCHASED BY BARGO ENERGY COMPANY FROM TEXACO 1. THE PROPERTIES: On February 22, 2000, Bargo Energy Company (Bargo) entered into an agreement with Texaco Exploration and Production Inc., Four Star Oil and Gas Company and McFarland Energy, Inc. (collectively, Texaco), to purchase Texaco's interests in certain oil and gas properties located in the Permian Basin, East Texas, Oklahoma and Kansas (the Acquired Properties) for $161.1 million, before closing adjustments. The effective date of the agreement is January 1, 2000. The transaction closed on March 31, 2000. 2. BASIS FOR PRESENTATION: The accompanying statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in Bargo Energy Company's Form 8-K and are not intended to be a complete financial presentation of the properties described above. The revenues and direct operating expenses associated with the Acquired Properties were derived from Texaco's accounting records and are presented on the accrual basis of accounting. Revenues and direct operating expenses, as set forth in the accompanying statements, include oil, gas and plant product revenues and associated direct operating expenses related to the net revenues and net working interests, respectively, in the Acquired Properties. The statements include oil, gas and plant product revenues, net of royalties. Direct operating expenses include labor, services, repairs and maintenance, and supplies utilized to operate and maintain the wells and related equipment as well as severance and ad valorem taxes. The accompanying statements do not represent a complete income statement in that they do not show certain expenses, which were incurred in connection with the ownership of the Acquired Properties, such as general and administrative expenses and income taxes. These costs were not separately allocated to the Acquired Properties in Texaco's accounting records, and any pro forma allocation would be both impractical and would not be a reliable estimate of what these costs would actually have been had the Acquired Properties been operated historically as a stand-alone entity. In addition, these allocations, if made using Texaco's general and administrative structures and tax burdens, would not produce allocations that would be indicative of the performance of the Acquired Properties had they been assets of Bargo due to the greatly varying size, structure and operations of the two companies. The accompanying statements also do not include Texaco's provisions for depreciation, depletion and amortization, as such amounts would not be indicative of those costs that would be incurred by Bargo upon allocation of the purchase price. F-4 6 The interim revenues and direct operating expenses for the three months ended March 31, 2000 and 1999, is unaudited; however, in the opinion of Texaco management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the revenues and direct operating expenses for the interim periods. 3. COMMITMENTS AND CONTINGENCIES: Pursuant to the terms of the purchase and sale agreement between Bargo and Texaco, any claims, litigation or disputes pending as of January 1, 2000, or any matters arising in connection with ownership of the properties prior to January 1, 2000, are retained by Texaco. Notwithstanding this indemnification, Texaco is not aware of any legal, environmental or other commitments or contingencies that would have a material effect on the statements of combined revenues and direct operating expenses. F-5 7 BARGO ENERGY COMPANY SUPPLEMENTAL OIL AND GAS INFORMATION (Unaudited) 1. OIL AND GAS RESERVE INFORMATION: Proved oil and gas reserve quantities are based on estimates prepared by Texaco's engineers and from information provided by Texaco in accordance with guidelines established by the Securities and Exchange Commission (SEC). There are numerous uncertainties inherent in estimating 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.
Oil Gas (Mbbls) (Mmcf) ---------- ---------- Proved reserves at December 31, 1997 51,949 40,181 Production (4,639) (4,987) Extensions, discoveries and improved recovery 2,461 5,508 Revisions of previous estimates (701) 1,578 Net purchases 55 226 ---------- ---------- Proved reserves at December 31, 1998 49,125 42,506 Production (3,942) (4,072) Extensions, discoveries and improved recovery 6,032 2,804 Revisions of previous estimates (3,669) (3,993) Net purchases 21 -- ---------- ---------- Proved reserves at December 31, 1999 47,567 37,245 ========== ========== Proved developed reserves at- December 31, 1997 47,493 37,067 December 31, 1998 44,488 36,855 December 31, 1999 39,884 33,372
2. FUTURE NET CASH FLOWS: Future cash inflows are based on year-end oil and gas prices except in those instances where future natural gas or oil sales are covered by physical or derivative contract terms providing for higher or lower amounts. Operating costs, production and ad valorem taxes and future development costs are based on current costs with no escalation. F-6 8 The following table sets forth unaudited information concerning future net cash flows for oil and gas reserves. This information does not purport to present the fair market value of Texaco's oil and gas assets, but does present a standardized disclosure concerning possible future net cash flows that would result under the assumptions used (in thousands).
December 31 -------------------------- 1999 1998 ----------- ----------- Future cash inflows $ 1,160,342 $ 578,081 Future production costs (361,052) (390,470) Future development costs (38,554) (30,662) ----------- ----------- Net cash flows 760,736 156,949 Less- 10% discount rate (365,970) (73,869) ----------- ----------- Discounted future net cash flows (before income taxes) $ 394,766 $ 83,080 =========== ===========
The following table sets forth the principal sources of change in discounted future net cash flows (in thousands).
Year Ended December 31 -------------------------- 1999 1998 ----------- ----------- Beginning of year $ 83,080 $ 257,808 Sales, net of production costs (38,734) (25,693) Net change in prices and production costs 338,574 (173,790) Extensions, discoveries and improved recovery, net of related costs 38,080 2,380 Development costs incurred during the year 5,121 14,657 Accretion of discount 8,308 25,783 Purchases of minerals in place 178 338 Revision of quantity estimates (34,231) (3,841) Change in production rates (timing) and other (5,610) (14,562) ----------- ----------- End of year $ 394,766 $ 83,080 =========== ===========
F-7 9 BARGO ENERGY COMPANY UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS The following unaudited pro forma combined statements of operations for the years ended December 31, 1999 and 1998 reflect the acquisition of the Texaco Properties by Bargo Energy Company that occurred on March 31, 2000 as if the acquisition occurred at the beginning of the respective periods. The pro forma statements of operations combine the operating results of Bargo for the years ended December 31, 1999 and 1998 with the historical summaries of revenues and direct operating expenses of the Texaco Properties for the same periods. The pro forma statements of operations also reflect the following transactions: (1) the acquisitions of the South Coles Levee Unit (SCLU) in August 1998; (2) the acquisition of several properties in October 1998 (the 10/15/98 acquisition); (3) the acquisition of the Cody Properties (Cody) in November and December 1998; and (4) the acquisition of the East Texas Properties (East Texas) in September 1999. These items are reflected in the pro forma statements of operations as if they had occurred at the beginning of the respective periods. These unaudited pro forma financial statements should be read in conjunction with the historical summaries of revenues and operating expenses of the Texaco properties included herein and with the historical financial statements of Bargo as filed in its periodic reports with the Securities and Exchange Commission. These unaudited pro forma financial statements should not be construed to be indicative of future results or results that actually would have occurred if the transactions had occurred at the dates presented. PF-1 10 BARGO ENERGY COMPANY UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 (amounts in thousands, except per share amount)
Proforma Adjustments Bargo Actual East Texas Proforma 1999 Texaco Properties Other 1999 ----------- ----------- ----------- ----------- ----------- Income: Oil and gas sales (1) $ 19,134 $ 70,213 $ 11,110 $ -- $ 100,457 ----------- ----------- ----------- ----------- ----------- $ 19,134 $ 70,213 $ 11,110 $ -- $ 100,457 ----------- ----------- ----------- ----------- ----------- Expenses: Lease operating expenses/production taxes (1) $ 7,685 $ 31,479 $ 5,790 $ -- $ 44,954 Depreciation, depletion and amortization (3) $ 4,898 $ -- $ 18,723 $ 23,621 General and administrative (2) $ 3,659 $ -- $ 3,272 $ 6,931 ----------- ----------- ----------- ----------- ----------- $ 16,242 $ 31,479 $ 5,790 $ 21,995 $ 75,506 ----------- ----------- ----------- ----------- ----------- $ 2,892 $ 38,734 $ 5,320 $ (21,995) $ 24,952 ----------- ----------- ----------- ----------- ----------- Other (income) and expense: Interest expense(4) $ 2,378 $ -- $ -- $ 16,080 $ 18,458 Other income $ (8) $ -- $ -- $ -- $ (8) ----------- ----------- ----------- ----------- ----------- $ 2,370 $ -- $ -- $ 16,080 $ 18,450 ----------- ----------- ----------- ----------- ----------- Income (loss) before income taxes $ 522 $ 38,734 $ 5,320 $ (38,075) $ 6,502 Income tax benefit/(expense) (5) $ 141 $ -- $ -- $ (2,611) $ (2,470) ----------- ----------- ----------- ----------- ----------- Net income (loss) before redeemable preferred stock dividends $ 663 $ 38,734 $ 5,320 $ (40,686) $ 4,032 Redeemable preferred stock dividends $ 3,473 $ -- $ -- $ -- $ 3,473 ----------- ----------- ----------- ----------- ----------- Net income/(loss) allocable to common Shareholders $ (2,810) $ 38,734 $ 5,320 $ (40,686) $ 559 =========== =========== =========== =========== =========== Net income (loss) per common share - basic and diluted $ (0.04) $ 0.01 Weighted average common shares outstanding $ 75,942 $ 75,942
PF-2 11 BARGO ENERGY COMPANY UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998 (amounts in thousands, except per share amount)
Proforma Adjustments Bargo Actual East Texas 1998 Texaco Properties 10/15/98 Acq ---------- ---------- ---------- ---------- Income: Oil and gas sales (1) $ 3,663 $ 64,090 $ 18,549 $ 4,105 Other $ 16 $ -- $ -- $ -- ---------- ---------- ---------- ---------- $ 3,679 $ 64,090 $ 18,549 $ 4,105 ---------- ---------- ---------- ---------- Expenses: Lease operating expenses/production taxes (1) $ 1,826 $ 38,397 $ 8,522 $ 1,366 Depreciation, depletion and amortization (3) $ 1,316 $ -- $ -- $ -- General and administrative (2) $ 783 $ -- $ -- $ -- ---------- ---------- ---------- ---------- $ 3,925 $ 38,397 $ 8,522 $ 1,366 ---------- ---------- ---------- ---------- Operating income/(loss) $ (246) $ 25,693 $ 10,027 $ 2,739 ---------- ---------- ---------- ---------- Other (income) and expense: Interest expense (4) $ 1,238 $ -- $ -- $ -- Other income $ (19) $ -- $ -- $ -- ---------- ---------- ---------- ---------- $ 1,219 $ -- $ -- $ -- ---------- ---------- ---------- ---------- Income (loss) before income taxes and extraordinary item $ (1,465) $ 25,693 $ 10,027 $ 2,739 Income Tax Benefit/(Expense) (5) $ 287 $ -- $ -- $ -- ---------- ---------- ---------- ---------- Income/(loss) before extraordinary item $ (1,178) $ 25,693 $ 10,027 $ 2,739 Extraordinary gain on conversion of debt $ 2,586 $ -- $ -- $ -- ---------- ---------- ---------- ---------- Net income/(loss) $ 1,408 $ 25,693 $ 10,027 $ 2,739 ========== ========== ========== ========== Net income (loss) per common share - basic and diluted $ 0.14 Weighted average common shares outstanding 9,924
Proforma Cody SCLU Other 1998 ---------- ---------- ---------- ---------- Income: Oil and gas sales (1) $ 2,681 $ 1,645 $ -- $ 94,733 Other $ -- $ -- $ -- $ 16 ---------- ---------- ---------- ---------- $ 2,681 $ 1,645 $ -- $ 94,749 ---------- ---------- ---------- ---------- Expenses: Lease operating expenses/production taxes (1) $ 1,011 $ 1,002 $ -- $ 52,124 Depreciation, depletion and amortization (3) $ -- $ -- $ 26,040 $ 27,356 General and administrative (2) $ -- $ -- $ 3,410 $ 4,193 ---------- ---------- ---------- ---------- $ 1,011 $ 1,002 $ 29,450 $ 83,673 ---------- ---------- ---------- ---------- Operating income/(loss) $ 1,670 $ 643 $ (29,450) $ 11,076 ---------- ---------- ---------- ---------- Other (income) and expense: Interest expense (4) $ -- $ -- $ 18,576 $ 19,814 Other income $ -- $ -- $ -- $ (19) ---------- ---------- ---------- ---------- $ -- $ -- $ 18,576 $ 19,795 ---------- ---------- ---------- ---------- Income (loss) before income taxes and extraordinary item $ 1,670 $ 643 $ (48,026) $ (8,719) Income Tax Benefit/(Expense) (5) $ -- $ -- $ 3,026 $ 3,313 ---------- ---------- ---------- ---------- Income/(loss) before extraordinary item $ 1,670 $ 643 $ (45,000) $ (5,406) Extraordinary gain on conversion of debt $ -- $ -- $ -- $ 2,586 ---------- ---------- ---------- ---------- Net income/(loss) $ 1,670 $ 643 $ (45,000) $ (2,820) ========== ========== ========== ========== Net income (loss) per common share - basic and diluted $ (0.28) Weighted average common shares outstanding 9,924
PF-3 12 BARGO ENERGY COMPANY NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS Pro Forma Statements of Operations (1) Adjustments to reflect the oil and gas sales and production expenses of the acquired properties prior to acquisition as if the acquisitions had all occurred at the beginning of the respective periods. (2) Adjustment to record estimated additional general and administrative expense associated with the acquired properties as if they had all been acquired at the beginning of the respective periods. (3) Adjustment to record additional depletion and depreciation as if the properties had all been acquired at the beginning of the respective periods. (4) Adjustment to record additional interest expense that would have been incurred if the properties had all been acquired at the beginning of the respective periods. (5) Adjustment to record income tax effect (at statutory rates) as if the transactions had all occurred at the beginning of the respective periods. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Bargo Energy Company (Registrant) Dated: May 18, 2000 ------------------------------- By: Kimberly G. Seekely Vice President - Treasurer PF-4 -----END PRIVACY-ENHANCED MESSAGE-----