-----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, IXuraJ9I8xIUMRp2Ky0lm0GS6OqEc8mk3SKlbaWQT3PgGJm+5N/aZ8OSrYKYcJ86 iMtqTmsR+w8ivwL9NppABQ== 0001069053-98-000002.txt : 19980918 0001069053-98-000002.hdr.sgml : 19980918 ACCESSION NUMBER: 0001069053-98-000002 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19980917 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FUTURE PETROLEUM CORP/UT/ CENTRAL INDEX KEY: 0000051072 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 870239185 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-31203 FILM NUMBER: 98710814 BUSINESS ADDRESS: STREET 1: 2351 W NW HWY STE 2130 CITY: DALLAS STATE: TX ZIP: 75220 BUSINESS PHONE: 2143507602 MAIL ADDRESS: STREET 1: P O BOX 25253 CITY: DALLAS STATE: TX ZIP: 75225 FORMER COMPANY: FORMER CONFORMED NAME: INTERMOUNTAIN EXPLORATION CO DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: REYNOLDS DON WM CENTRAL INDEX KEY: 0000940200 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 206 ROCK ST CITY: BOWIE STATE: TX ZIP: 76230 MAIL ADDRESS: STREET 1: 206 ROCK ST CITY: BOWIE STATE: TX ZIP: 76230 SC 13D/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (Amendment No. 1) UNDER THE SECURITIES EXCHANGE ACT OF 1934* FUTURE PETROLEUM CORPORATION (Name of Issuer) COMMON STOCK, PAR VALUE $.01 PER SHARE (Title of Class of Securities) 390916 100 (CUSIP Number) CARL PRICE FUTURE PETROLEUM CORPORATION 2351 WEST NORTHWEST HIGHWAY, SUITE 2130 DALLAS, TEXAS 75220 (214) 350-7602 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 14, 1998 (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 204.13d-1(g), check the following box. ___ NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7(b) for other parties to whom copies are to be sent. *The remainder of the cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 1 SCHEDULE 13D CUSIP No.: 1 NAME OF REPORTING PERSON (entities only) DON WM. REYNOLDS 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS Not Applicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(E) 6 CITIZENSHIP OR PLACE OF ORGANIZATION Texas Number of 7 SOLE VOTING POWER 753,362 Shares Bene- _____________________________________________ ficially 8 SHARED VOTING POWER 0 Owned by _____________________________________________ Each Report- 9 SOLE DISPOSITIVE POWER 753,362 ing Person _____________________________________________ With 10 SHARED DISPOSITIVE POWER 0 _____________________________________________ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 753,362 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.5% 14 TYPE OF REPORTING PERSON IN 2 Item 1. Security and Issuer. The class of equity securities to which this statement relates is common stock, par value $.01 per share (the "Common Stock"), of Future Petroleum Corporation, a Utah corporation (the "Issuer" or "Future"), formerly known as Intermountain Exploration Company. The address of the principal executive offices of the Issuer is 2351 West Northwest Highway, Suite 2130, Dallas, Texas 75220. This Amendment No. 1 to the Schedule 13D previously filed by the Reporting Person (as defined) is filed hereby to reflect the consummation of the Merger described below and certain other transactions in connection therewith. This Amendment amends the Schedule 13D, dated September 16, 1993, filed by Don Wm. Reynolds, reflecting his beneficial ownership of Intermountain Exploration Company. Item 2. Identity and Background. The following person ("Reporting Person") is filing this Schedule 13D: The principal business address and office of Don Wm. Reynolds ("Reporting Person") is located at 206 Rock Street, Bowie, Texas, 76230. The Reporting Person is a director of the Issuer Merger Agreement; Debt Restructuring and Election of Directors On August 14, 1998, Bargo Energy Resources, Ltd. ("Bargo LP"), a Texas limited partnership, SCL-CAL Company, a Texas corporation and wholly owned subsidiary of Bargo LP, Future and a wholly owned subsidiary of Future entered into an Agreement and Plan of Merger ("Merger Agreement") pursuant to which SCL-CAL Company was merged, effective as of August 14, 1998 (the "Merger"), with and into the Future subsidiary. Pursuant to the Merger, Bargo LP received 4,694,859 shares of Future Common Stock and a warrant (the "Warrant") to purchase 250,000 shares of Future Common Stock with an exercise price of $0.43 per share. The Warrant may be exercised at any time prior to August 14, 2003. The assets of SCL-CAL Company were primarily working interests in oil and gas properties located in California. Simultaneously with the Merger, Future renewed and extended certain indebtedness owed to Energy Capital Investment Company PLC, an English company ("EnCap PLC"), and EnCap Equity 1994 Limited Partnership, a Texas limited partnership ("EnCap LP" and, together with EnCap PLC, the "EnCap Entities"). In connection with the renewal and extension, EnCap PLC and EnCap LP were issued 1,373,097 and 1,471,782 shares of Common Stock, respectively. Based on information provided to the Reporting Person by the EnCap Entities, the Reporting Person believe that EnCap PLC and EnCap LP beneficially owned 2,269,886 and 2,424,973 shares of Common Stock, respectively, following such acquisitions. In the Merger Agreement, Future agreed to cause the resignation of Mr. Robert Price and Mr. D. William Reynolds, Jr. as directors of the Company, to increase the size of the Board of Directors to seven persons and to appoint Messrs. Tim J. Goff, Thomas D. Barrow, D. Martin Phillips and Gary R. Petersen as directors of the Company. The effective date of such resignations and appointments was August 21, 1998. 3 Shareholders' Agreement In connection with the Merger, Bargo LP, the EnCap Entities, Mr. B. Carl Price, the Reporting Person, (the Reporting Person and Mr. Price are referred to as the "Price Group") and Future entered into a Shareholders' Agreement. Based on information provided to the Reporting Person by the other parties to the Shareholders' Agreement, the following sets forth the number of shares of Common Stock beneficially owned by the parties to the Shareholders' Agreement. Total Shares Beneficially Shares Outstanding Owned ------------------ Derivative --------------- Name Number % Securities Number %(2) - ----------------------------------------------------------------------- Bargo LP 4,694,859 34.3 250,000 4,944,859 35.5 EnCap PLC 2,269,886 16.6 -- 2,269,886 16.6 EnCap LP 2,424,973 17.7 -- 2,424,973 17.7 Mr. Price 1,089,149 8.0 633,508(1) 1,722,657 12.0 Mr. Reynolds 753,362 5.5 --(3) 753,362 5.5 ---------- ---- ---------- ---------- ---- Total 11,132,229 81.2 837,720 11,969,949 86.5 ========== ==== ========== ========== ====
(1) Includes 587,720 shares of Common Stock that may be acquired pursuant to employee stock options which may be exercised immediately. Also includes 45,788 shares of Common Stock, the maximum number of shares which Mr. Price has the right to acquire during the 60 days following August 14, 1998, under an employment agreement with Future. Under this agreement, Mr. Price may elect to receive all or a portion of his salary in shares of Common Stock at a price per share of $0.42 per share until December 31, 1998. From January 1, 1998 and until the employment agreement terminates, the purchase price per share is the average midpoint between the bid and asked price of the Common Stock on the OTC Bulletin Board for the last five days of the calendar year prior to the year the compensation is earned. The 45,788 shares included in the foregoing table represents the maximum number of shares which Mr. Price could acquire during the 60 day period following August 14, 1998, if he converted all of his salary into shares of Common Stock. (2) In accordance with regulations of the Securities and Exchange Commission ("SEC") under Section 13(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act"), the percent shown in this column for each stockholder represents the number of shares of Common Stock owned by the stockholder plus the derivative securities owned by such stockholder divided by the number of shares outstanding plus the number of derivative securities owned by such stockholder. (3) Pursuant to the terms of the Agreement, the Reporting Person does not have a right to acquire any shares of Common Stock under the Agreement in the next 60 days following August 14, 1998. The parties to the Shareholders' Agreement have agreed to cause the Board of Directors of Future to be composed of seven persons. Each party has further agreed to vote their shares of Common Stock in connection with the election of directors of the Company for two nominees of Bargo LP, two nominees of the EnCap Entities and three nominees of the Price Group. In addition, the parties to the Shareholders' Agreement have agreed that one of the nominees of Bargo LP will be the Chairman of the Board of Directors of the Company. The parties to the Shareholders' Agreement have also granted each other the right of first refusal with respect to proposed transfers of their Common Stock. The right of first refusal provides that any party to the Shareholders' Agreement proposing to sell shares of Common Stock pursuant to a bona fide offer must first offer the shares to the other stockholders at the price at which such Common Stock is proposed to be sold. The right of first refusal does not apply to the following transactions ("Exempt Transfers"): sales of Common Stock in compliance with Rule 144, pursuant to a registration statement filed with the SEC or transfers by a stockholder to its equity owners (provided the equity owner agrees to be bound by the Shareholders' Agreement). 4 The parties to the Shareholders' Agreement have also granted each other tag along rights with respect to the proposed sale of their Common Stock. The tag along rights provide that any party to the Shareholders' Agreement proposing to sell shares of Common Stock pursuant to a bona fide offer must, if requested by the other stockholders, cause the purchase, for the same purchase price and on the same terms, of a proportionate number of shares of Common Stock owned by such other stockholders. The tag along rights do not apply to Exempt Transfers. The provisions of the Shareholders' Agreement relating to voting and transfer of Common Stock may be deemed to cause the formation of a group composed of the parties to the Shareholders' Agreement. By-Law Amendments Pursuant to the terms of an Agreement, dated August 14, 1998, B. Carl Price, the EnCap Entities and Bargo LP have agreed to amend ("By-Law Amendments") the By-Laws of the Company to provide that, for so long as Bargo LP is entitled to nominate one or more persons to the Board of Directors of the Company as provided in the Shareholders' Agreement, without the approval of one of the directors nominated by Bargo LP, the Company cannot take certain actions, including, without limitation, (i) incur or be liable for indebtedness other than indebtedness under the Company's credit facility with a commercial bank, obligations under operating leases entered into in the ordinary course of the Company's business, and purchase money indebtedness in an aggregate principal amount not to exceed $200,000 at any time; (ii) merge or consolidate with or into any other business entity; (iii) sell, transfer, lease, exchange, alienate or dispose of certain assets; (iv) make any expenditure or commitment or incur any obligation or enter into or engage in any transaction except in the ordinary course of business (which ordinary course of business includes the acquisition, directly or indirectly, of oil and gas properties); or (v) engage in any material transaction with any of its affiliates on terms which are less favorable to it than those which would have been obtainable at the time in arms-length dealing with persons other than such affiliates. Pledge Agreement In connection with the Merger, Future entered into a $20 million credit agreement with a commercial bank. Borrowings under the credit agreement may not exceed a borrowing base initially set at $10.5 million. Pursuant to pledge agreements, each of which is dated August 14, 1998 ("Pledge Agreements"), Bargo LP, the EnCap Entities and the Price Group have pledged their shares of Common Stock to secure Future's borrowings under the credit agreement. If an event of default occurs under the credit agreement, the bank will have the right to vote all of the shares of Future subject to the Pledge Agreements, and following foreclosure on the Common Stock, will have the right to sell the Common Stock as provided in the Pledge Agreements and applicable law. Agreement The Company and the Reporting Person entered into an agreement for services on November 18, 1997 ("Agreement") pursuant to which the Company agreed to pay the Reporting Person $18,000 per year. The Reporting Person was granted the right to use up to one hundred percent (100%) of his annual compensation to purchase restricted shares of the Company's Common Stock. The price per share for stock in lieu of cash payment was $.42 for purchases made prior to January 31, 1998, and after January 31, 1998 is the average midpoint price between the bid and ask for the five (5) days prior to the agreed date of payment. Payment is to be made on an annual basis by January 31 following the year of service. The agreement provides for a five-year term from November 18, 1997. The Reporting Person has received all of his compensation for 1998 in shares of stock. 5 The Reporting Person has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). The Reporting Person has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. The Reporting Person is a citizen of the United States of America. Item 3. Source and Amount of Funds or other Consideration. Not applicable. Item 4. Purpose of Transaction. The Reporting Person acquired his ownership interest in Future for the purpose of holding a substantial ownership position in Future in order to be able to influence the business and management of Future. The Reporting Person, through his nominees on the Board of Directors, intends to actively participate in the business and management of Future. The Reporting Person plans to seek to aggressively grow the reserves and cash flow of Future by acquiring additional oil and gas properties and developing such properties. The parties to the Shareholders' Agreement, voting together as provided in such agreement, have the ability to control Future with respect to the election of directors. The Reporting Person intends to monitor and evaluate his investment in Future in light of pertinent factors, including oil and gas prices, market conditions, Future's performance and prospects, the trading prices of the Common Stock, conditions in the oil and gas industry and general economic conditions. The Reporting Person may make additional purchases of Common Stock in the future through market transactions or otherwise, maintain his current investment or dispose of some or all of the Common Stock. Although the Reporting Person expects that Future will enter into transactions to purchase additional oil and gas properties, except as set forth above, the Reporting Person does not have any present plan or intention which would result in or relate to any of the actions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. The following describes the number of shares of Common Stock and Warrants and the percent of outstanding Common Stock owned by the Reporting Person and the parties to the Shareholders' Agreement. All percentages are based on 6,157,015 shares of Common Stock issued and outstanding on August 14, 1998, as represented by Future in the Merger Agreement, plus the 4,694,859 and 2,844,859 shares of Common Stock issued to Bargo LP and the EnCap Entities on August 14, 1998. Amounts beneficially owned by parties to the Shareholders' Agreement are based on representations and warranties made by such persons in the Shareholders' Agreement. 6 Shares Outstanding Total ------------------ Derivative --------------- % Securities Number %(1) - ----------------------------------------------------------------------- Bargo LP 4,694,859 34.3 250,000 4,944,859 35.5 Bargo Operating (2) 4,694,859(3) 34.3(3) 250,000(3) 4,944,859 35.5 Tim J. Goff 4,694,859(3) 34.3(3) 250,000(3) 4,944,859 35.5 EnCap PLC 2,269,886 16.6 -- 2,269,886 16.6 EnCap LP 2,424,973 17.7 -- 2,424,973 17.7 Mr. Price 1,089,149 8.0 633,508(4) 1,722,657 12.0 Mr. Reynolds 753,362 5.5 --(5) 753,362 5.5
(1) In accordance with SEC regulations under Section 13(d) of the Exchange Act, the percent shown in this column for each stockholder represents the number of shares of Common Stock owned by the stockholder plus the derivative securities owned by such stockholder divided by the number of shares outstanding plus the number of derivative securities owned by such stockholder. (2) Bargo Operating Company, Inc. ("Bargo Operating") is a Texas corporation, Bargo Operating is the sole general partner of Bargo. (3) Represents shares of Common Stock and Warrants owned by Bargo LP. (4) Includes 587,720 shares of Common Stock that may be acquired pursuant to employee stock options which may be exercised immediately. Also includes 45,788 shares of Common Stock, the maximum number of shares which Mr. Price has the right to acquire during the 60 days following August 14, 1998 under the Agreement. Under this Agreement, Mr. Price may elect to receive all or a portion of his salary in shares of Common Stock at a price per share of $0.42 per share until December 31, 1998. From January 1, 1998 and until the Agreement terminates, the purchase price per share is the average midpoint between the bid and asked price of the Common Stock on the OTC Bulletin Board for the last five days of the calendar year prior to the years the compensation is earned. The 45,788 shares included in the foregoing table represents the maximum number of shares which Mr. Price could acquire during the 60 day period following August 14, 1998 if he converted all of his salary with shares of Common Stock. (5) Pursuant to the terms of the Agreement, the Reporting Person does not have a right to acquire any shares of Common Stock under the Agreement in the next 60 days following August 14, 1998. All shares of Common Stock owned by the Reporting Person are subject to the voting and transfer provisions of the Shareholders' Agreement. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to the Securities of the Issuer. Except as set forth in Items 3, 4, 5 and 6 or in the Exhibits filed herewith, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between any of the individuals or entities described in Item 2 or between such persons and any other person with respect to the shares of Common Stock deemed to be beneficially owned by the Reporting Person. 7 Item 7. Material to be Filed as Exhibits. Exhibit Number Description Exhibit 4.1 - Shareholders' Agreement, dated August 14, 1998, by and among Future Petroleum Corporation, Bargo Energy Resources, Ltd., Energy Capital Investment Company PLC, EnCap Equity 1994 Limited Partnership, B. Carl Price, and Don Wm. Reynolds. (Incorporated herein by reference to Exhibit 10.5 to Future Petroleum Corporation's Quarterly Report on Form 10-QSB for the period ended June 30, 1998. File No. 000- 08609) Exhibit 4.2 - Pledge Agreement, dated August 14, 1998, between Don Wm. Reynolds and Bank of America National Trust and Savings Association. (Incorporated herein by reference to Exhibit 10.17 to Future Petroleum Corporation's Quarterly Report on Form 10-QSB for the period ended June 30, 1998. File No. 000- 08609) Exhibit 10.1 - Agreement between the Company and Don Wm. Reynolds, dated as of November 18, 1997, (Incorporated herein by reference to Exhibit 10.7 to Future Petroleum Corporation's Quarterly Report on Form 10-QSB for the period ended June 30, 1998. File No. 000-08609) Exhibit 10.2 - Registration Rights Agreement among the Company, B. Carl Price and certain other shareholders, dated August 14, 1998. (Incorporated herein by reference to Exhibit 10.3 to Future Petroleum Corporation' Corporation Quarterly Report on Form 10-QSB for the period ended June 30, 1998. File No. 000-08609) 8 SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: September 15, 1998 /s/ Don Wm. Reynolds Don Wm. Reynolds 9 -----END PRIVACY-ENHANCED MESSAGE-----