-----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, F+VsRUCf2r9423B6QluzeRpFewwh07G6kg6+8MUaA/07fIl6iZC3dxalSyAz9JLp wXuEDV9DUtW3Wp47r/xjKw== 0000914760-00-000012.txt : 20000203 0000914760-00-000012.hdr.sgml : 20000203 ACCESSION NUMBER: 0000914760-00-000012 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991123 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAYNARD OIL CO CENTRAL INDEX KEY: 0000063528 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 751362284 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-05704 FILM NUMBER: 512802 BUSINESS ADDRESS: STREET 1: 8080 N CENTRAL EXPWY STE 660 CITY: DALLAS STATE: TX ZIP: 75206 BUSINESS PHONE: 2148918880 MAIL ADDRESS: STREET 1: 8080 N CENTRAL EXPWY STE 660 CITY: DALLAS STATE: TX ZIP: 75206 FORMER COMPANY: FORMER CONFORMED NAME: HOMA OIL & GAS CO DATE OF NAME CHANGE: 19710902 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A AMENDMENT TO REPORT Filed Pursuant to Section 12, 13, or 15(d) of The Securities Exchange Act of 1934 MAYNARD OIL COMPANY - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) AMENDMENT NO. 1 The undersigned Registrant hereby amends the following items, financial statements, exhibits or other portions of its Current Report on Form 8- K dated November 23, 1999, as set forth in the pages attached hereto: INFORMATION TO BE INCLUDED IN THE REPORT Item 2. Acquisition or Disposition of Assets. ------------------------------------ Pursuant to Instruction 6 (ii) of this item, financial statements for the properties acquired and pro forma financial information has been attached hereto as set forth in newly added Item 7 below. Item 7. Financial Statements and Exhibits. --------------------------------- (a) Financial Statements of business acquired (1) Report of Independent Accountants (2) Historical Financial Summaries of The Interests in the Oil and Gas Revenues and Direct Operating Expenses of the Properties Acquired by Maynard Oil Company from Questar Exploration and Production Company for the two years ended December 31, 1998 and 1997 and the nine months ended September 30, 1999 and 1998 (Unaudited). (3) Notes to Historical Financial Summaries of The Interests in the Oil and Gas Revenues and Direct Operating Expenses of the Properties Acquired by Maynard Oil Company from Questar Exploration and Production Company for the years ended December 31, 1998 and 1997 and the nine months ended September 30, 1999 and 1998. (4) Supplementary Oil and Gas Information (Unaudited) (b) Pro Forma Financial Information. (1) Pro Forma Condensed Consolidated Statement of Operations (Unaudited) Nine Months Ended September 30, 1999. (2) Pro Forma Condensed Consolidated Balance Sheet (Unaudited) September 30, 1999. (3) Pro Forma Condensed Consolidated Statement of Operations (Unaudited) Year Ended December 31, 1998. 2 (4) Pro Forma Condensed Consolidated Statement of Operations (Unaudited) Year Ended December 31, 1997. (5) Notes to Pro Forma Condensed Consolidated Financial Statements (Unaudited) (6) Supplementary Oil and Gas Information (Unaudited) 3 Item 7(a), Financial Statements of Business Acquired. INDEX TO FINANCIAL STATEMENTS Page ---- Report of Independent Accountants 5 Historical Financial Summaries of The Interests in the Oil and Gas Revenues and Direct Operating Expenses of the Properties Acquired by Maynard Oil Company from Questar Exploration and Production Company for the two years ended December 31, 1998 and 1997 and the nine months ended September 30, 1999 and 1998 (Unaudited). 6 Notes to Historical Financial Summaries of The Interests in the Oil and Gas Revenues and Direct Operating Expenses of the Properties Acquired by Maynard Oil Company from Questar Exploration and Production Company for the two years ended December 31, 1998 and 1997 and the nine months ended September 30, 1999 and 1998. 7 Supplementary Oil and Gas Information (Unaudited) 9 4 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Maynard Oil Company: We have audited the accompanying historical financial summaries of the interests in oil and gas revenues and direct operating expenses of the properties acquired by Maynard Oil Company ("Maynard") from Questar Exploration and Production Company, for the nine month period ended September 30, 1999 and for the years ended December 31, 1998 and 1997. These financial statements are the responsibility of Maynard's management. Our responsibility is to express an opinion on these financial 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 financial 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 historical financial summaries of the interests in oil and gas revenues and direct operating expenses of the properties acquired by Maynard from Questar Exploration and Production Company reflect the revenues and direct operating expenses attributable to the properties, and are not intended to be a complete presentation of the revenues and expenses of such properties. In our opinion, the statements referred to above present fairly, in all material respects, the oil and gas revenues and direct operating expenses of the properties for the nine months ended September 30, 1999 and for the years ended December 31, 1998 and 1997, in conformity with accounting principles generally accepted in the United States. Dallas, Texas January 25, 2000 5 HISTORICAL FINANCIAL SUMMARIES OF THE INTERESTS IN THE OIL AND GAS REVENUES AND DIRECT OPERATING EXPENSES OF THE PROPERTIES ACQUIRED BY MAYNARD OIL COMPANY FROM QUESTAR EXPLORATION AND PRODUCTION COMPANY
Nine Months Ended Years Ended September 30, December 31, -------------- ------------ 1999 1998 1998 1997 ---- ---- ---- ---- (unaudited) Oil and gas revenues $ 5,334,430 $5,453,161 $ 6,843,515 $11,405,912 Direct operating expenses 2,279,673 3,052,070 4,071,471 4,822,121 ---------- --------- ---------- ---------- Revenues in excess of direct operating expenses $ 3,054,757 $2,401,091 $ 2,772,044 $ 6,583,791 ========== ========= ========== ========== The accompanying notes are an integral part of the historical financial summaries.
6 NOTES TO THE HISTORICAL FINANCIAL SUMMARIES OF THE INTERESTS IN THE OIL AND GAS REVENUES AND DIRECT OPERATING EXPENSES OF THE PROPERTIES ACQUIRED BY MAYNARD OIL COMPANY FROM QUESTAR EXPLORATION AND PRODUCTION COMPANY 1. BASIS OF PRESENTATION The accompanying Historical Financial Summaries represent the interests in the oil and gas revenues and direct operating expenses of the oil and gas producing properties acquired by Maynard Oil Company ("Maynard" or the "Company") from Questar Exploration and Production Company ("Questar") effective November 1, 1999 for cash consideration of $32 million (closing occurred on November 12, 1999). The majority of properties acquired were operated by Questar and will be operated by Maynard and are located in the Permian Basin in southeastern New Mexico and West Texas. The oil and gas properties acquired were never operated as a separate division by Questar and, accordingly, full separate, historical financial statements prepared in accordance with generally accepted accounting principles (GAAP) do not exist. A practicable determination of the historical general and administrative expenses and other indirect expenses which were attributable to the properties acquired would not be possible or indicative of the level of such expenses to be incurred by Maynard. Likewise, the depreciation and any impairment charges of Questar associated with the acquired properties would be based upon Questar's historical costs and are not relevant to the ongoing financial reporting of Maynard, or related investor decisions, since the properties will be reviewed for impairment and depreciated over future periods based upon Maynard's acquisition costs. The presentation herein of historical financial statements reflecting financial position, results of operations and cash flows required by GAAP was not practicable in these circumstances. Accordingly, the Historical Financial Summaries are presented in lieu of the financial statements required under Rule 3-05 of Securities and Exchange Commission Regulation S-X. The oil and gas revenues and direct operating expenses shown in the Historical Financial Summaries may not be representative of future operations. 7 2. OIL AND GAS REVENUES Oil and gas revenues have been based on realizations at the point of sale using historical oil and gas prices and the revenue and working interests purchased by the Company. There were no sales to affiliated parties. 3. DIRECT OPERATING EXPENSES Direct operating expenses include those costs incurred by Questar with respect to production up to the point of sale, including electricity, fuel, transportation costs, chemicals, other materials and supplies, and the labor and associated costs of employees working directly on these properties. These expenses exclude depreciation and amortization of production facilities and the estimated cost of abandonment of these facilities. 8 SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited) Estimated Net Quantities of Proved Developed and Undeveloped Oil and Gas Reserves Proved reserves are estimated quantities of crude oil and natural gas which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. The following table presents the estimated net proved oil and gas reserves, estimated by Maynard, attributable to the properties at November 1, 1999. Proved Reserves - --------------- Crude Oil, Condensate and Natural Gas Liquids (Barrels) 4,276,878 ========== Natural Gas (Thousands of Cubic Feet) (MCF) 11,533,302 ========== Production volumes for prior periods were added back to the above referenced reserve amounts to arrive at reserve totals at December 31, 1998, and 1997, respectively. There were no "new discovery" quantities considered for the referenced disclosure. Oil Gas (Barrels) (MCF) --------- ----- Total as of November 1, 1999 4,276,878 11,533,302 1999 Production (10 months) 288,568 826,506 Totals as of December 31, 1998 4,565,446 12,359,808 1998 Production 405,544 1,174,502 Totals as of December 31, 1997 4,970,990 13,534,310 1997 Production 467,225 1,288,857 Totals as of December 31, 1996 5,438,215 14,823,167 9 SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited) (continued) Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Reserves The following table sets forth the computation of the standardized measure of discounted future net cash flows relating to proved reserves attributable to the acquired properties, estimated by Maynard as of November 1, 1999. Future cash inflows represent expected revenues from production of proved reserves based on November 1, 1999 prices and any fixed and determinable price adjustments provided by contractual arrangements in existence at that date. Escalation based on inflation and supply and demand are not considered. Estimated future production and development costs related to future production of proved reserves are based on November 1, 1999 costs. Future income tax estimates are included based on tax rates currently in effect. A discount rate of 10% is applied to the annual future net cash flows. The methodology and assumptions used in calculating the standardized measure are those required by Statement of Financial Accounting Standards No. 69. This data is not intended to be representative of the fair market value of the properties' proved reserves. The valuation of revenues and costs do not necessarily reflect the amounts to be received or expended. In addition to the valuations used, numerous other factors are considered in evaluating known and prospective oil and gas reserves. As of November 1, 1999 ------------- (000's) Future cash inflows $109,294 Future production costs (43,718) Future development costs (6,839) Future income tax expense (6,759) ------- Future net cash flows 51,978 Discount at 10 percent (20,178) Standardized measure of discounted future net cash flows from estimated production of proved oil and gas reserves after income taxes $ 31,800 ======= 10 MAYNARD OIL COMPANY PRO FORMA FINANCIAL INFORMATION (UNAUDITED) Effective November 1, 1999, the Company purchased interests in approximately 170 producing oil and gas properties located in the Permian Basin in Southeastern New Mexico and West Texas from Questar Exploration and Production Company for cash consideration of $32 million. This acquisition was closed November 12, 1999. The unaudited pro forma condensed consolidated balance sheet of Maynard Oil Company and Subsidiary has been prepared as if the acquisition of these assets occurred on September 30, 1999. The unaudited pro forma consolidated statements of operations for the nine months ended September 30, 1999 and for the years ended December 31, 1998 and 1997 have been prepared as if the acquisition occurred at the beginning of the respective periods. The consolidated pro forma information should be read in conjunction with the notes thereto. Such pro forma information is not necessarily indicative of the results which would have actually occurred had the transactions been in effect on the dates or for the periods indicated or which may occur in the future. 11 Item 7(b), Pro Forma Financial Information INDEX TO PRO FORMA FINANCIAL INFORMATION Page ---- Pro Forma Condensed Consolidated Statement of Operations (Unaudited) for the Nine Months Ended September 30, 1999 13 Pro Forma Condensed Consolidated Balance Sheet(Unaudited) September 30, 1999 14 Pro Forma Condensed Consolidated Statement of Operations (Unaudited) for the Year Ended December 31, 1998 15 Pro Forma Condensed Consolidated Statement of Operations (Unaudited) for the Year Ended December 31, 1997 16 Notes to Pro Forma Condensed Consolidated Financial Statements (Unaudited) 17 Supplementary Pro Forma Oil and Gas Information (Unaudited) 18 12 MAYNARD OIL COMPANY Pro Forma Condensed Consolidated Statements of Operations (Unaudited) For the Nine Months Ended September 30, 1999
Questar Property Maynard Acquisition Historical Historical Pro Forma Pro Forma Amounts Amounts Adjustments Amounts ------- ------- ----------- ------- (Thousands of Dollars, Except Per Share Amounts) Revenues: Oil and gas sales and royalties $ 14,519 $ 5,334 $ -- $ 19,853 Interest and other 662 -- -- 662 Gain on disposition of assets 303 -- -- 303 --------- --------- -------- -------- 15,484 5,334 -- 20,818 --------- --------- -------- -------- Costs and expenses: Operating expenses 6,004 2,280 603 (a) 8,887 Exploration, dry holes and abandonments 487 -- -- 487 General and administrative, net 846 -- (479) (a) 367 Depreciation and amortization 4,618 -- 1,877 (b) (b) 6,495 Interest and other 456 -- 1,621 (c) 2,077 --------- --------- ------- --------- 12,411 2,280 3,622 18,313 --------- --------- ------ --------- Income before income taxes 3,073 3,054 (3,622) 2,505 Income tax expense (benefit) 840 -- (193) (d) 647 --------- --------- ------- --------- Net income (loss) $ 2,233 $ 3,054 $ (3,429) $ 1,858 ========= ========= ======= ========= Weighted average number of common shares outstanding 4,883,664 4,883,664 ========= ========= Net income per common share: (Basic and diluted) $0.46 $0.38 ==== ==== See Notes to Pro Forma Condensed Consolidated Financial Statements.
13 MAYNARD OIL COMPANY Pro Forma Condensed Consolidated Balance Sheet September 30, 1999 (Unaudited)
Historical Pro Forma Pro Forma Amounts Adjustments(e) Amounts ------- -------------- ------- (Thousands of Dollars) ASSETS Current Assets: Cash $ 12,125 $ (300) $ 11,825 Accounts receivable and other current assets 5,397 -- 5,397 --------- --------- --------- Total current assets 17,522 (300) 17,222 --------- --------- --------- Property and equipment, at cost Oil and gas properties 119,380 32,300 151,680 Other property 460 -- 460 --------- --------- --------- 119,840 32,300 152,140 Less accumulated depreciation and depletion (77,436) -- (77,436) --------- --------- --------- Net property and equipment 42,404 32,300 74,704 --------- --------- --------- Deferred income taxes 381 -- 381 --------- --------- --------- $ 60,307 $ 32,000 $ 92,307 ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion, long-term debt $ 5,000 75 5,075 Accounts payable, accrued expenses and other current liabilities 4,938 -- 4,938 --------- --------- --------- 9,938 75 10,013 --------- --------- --------- Long-term debt 2,500 31,925 34,425 Shareholders' equity Common stock 489 -- 489 Additional paid-in capital 18,831 -- 18,831 Retained earnings 28,549 -- 28,549 --------- --------- --------- Total shareholders' equity 47,869 -- 47,869 --------- --------- --------- $ 60,307 $ 32,000 $ 92,307 ========= ========= ========= See Notes to Pro Forma Condensed Consolidated Financial Statements.
14 MAYNARD OIL COMPANY Pro Forma Condensed Consolidated Statements of Operations (Unaudited) For the Twelve Months Ended December 31, 1998
Questar Property Maynard Acquisition Historical Historical Pro Forma Pro Forma Amounts Amounts Adjustments Amounts ------- ------- ----------- ------- (Thousands of Dollars, Except Per Share Amounts) Revenues: Oil and gas sales and royalties $ 16,166 $ 6,843 $ -- $ 23,009 Interest and other 1,330 -- -- 1,330 Gain on disposition of assets 6 -- -- 6 --------- --------- -------- -------- 17,502 6,843 -- 24,345 --------- --------- -------- -------- Costs and expenses: Operating expenses 8,722 4,071 804 (a) 13,597 Exploration, dry holes and abandonments 392 -- -- 392 General and administrative, net 674 -- (638) (a) 36 Depreciation and amortization 9,845 -- 2,687 (b) 12,532 Impairment of oil & gas properties 8,755 -- -- 8,755 Interest and other 1,011 -- 2,125 (f) 3,136 --------- --------- ------- --------- 29,399 4,071 4,978 38,448 --------- --------- ------ --------- Income (loss) before income taxes (11,897) 2,772 (4,978) (14,103) Income tax (benefit) (4,082) -- (750) (g) (4,832) --------- --------- ------- --------- Net income (loss) $ (7,815) $ 2,772 $ (4,228) (d) $ (9,271) ========= ========= ======= ========= Weighted average number of common shares outstanding 4,887,882 4,887,882 ========= ========= Net income (loss) per common share (Basic and diluted) ($1.60) ($1.90) ==== ==== See Notes to Pro Forma Condensed Consolidated Financial Statements.
15 MAYNARD OIL COMPANY Pro Forma Condensed Consolidated Statements of Operations (Unaudited) For the Twelve Months Ended December 31, 1997
Questar Property Maynard Acquisition Historical Historical Pro Forma Pro Forma Amounts Amounts Adjustments Amounts ------- ------- ----------- ------- (Thousands of Dollars, Except Per Share Amounts) Revenues: Oil and gas sales and royalties $ 26,477 $ 11,406 $ -- $ 37,883 Interest and other 1,230 -- -- 1,230 Gain on disposition of assets 192 -- -- 192 --------- --------- -------- -------- 27,899 11,406 -- 39,305 --------- --------- -------- -------- Costs and expenses: Operating expenses 10,124 4,822 804 (a) 15,750 Exploration, dry holes and abandonments 839 -- -- 839 General and administrative, net 563 -- (638) (a) (75) Depreciation and amortization 8,291 -- 2,784 (b) 11,075 Interest and other 1,469 -- 2,397 (f) 3,866 --------- --------- ------- --------- 21,286 4,822 5,347 31,455 --------- --------- ------- --------- Income before income taxes 6,613 6,584 (5,347) 7,850 Income tax expense 2,158 -- 421 (d) 2,579 --------- --------- ------- --------- Net income $ 4,455 $ 6,584 $ (5,768) $ 5,271 ========= ========= ======= ========= Weighted average number of common shares outstanding 4,889,450 4,889,450 ========= ========= Net income per common share: (Basic and diluted) $0.91 $1.08 ==== ==== See Notes to Pro Forma Condensed Consolidated Financial Statements.
16 MAYNARD OIL COMPANY NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (a) Recognize additional corporate overhead incurred as a result of the acquisition, net of overhead charges billed to working interest owners, including the Company. The Company's working interest portion of the overhead charges are included in operating expenses. See Note 1, "Overhead Reimbursement Fees", to the Company's Consolidated Financial Statements included in Maynard's 1998 Annual Report and Form 10-K. (b) Depreciation, depletion, and amortization of the Questar Properties determined by using the unit-of-production method. (c) Recognize interest expense associated with the borrowings incurred to fund the acquisition at an annual rate of 6.75 percent, which would have been incurred if the Questar acquisition had occurred on January 1, 1999. (d) Record the tax effect, at 34 percent for U.S. Federal income taxes, of the pro forma adjustments and net income from the Questar properties for the nine months ended September 30, 1999 and the two years ended December 31, 1998. (e) Record the adjusted purchase price as an increase of $32,300,000 to Oil and Gas Properties consisting of $32,000,000 cash for the properties and $300,000 of additional expenses incurred to close the purchase. The $32,000,000 was funded by bank financing which was added to the Company's existing debt. The revised loan agreement provides for repayment of the loan over a five year period beginning April 1, 2000. (f) Recognize interest expense associated with the borrowings incurred to fund the acquisition at an annual rate of 6.64 and 7.49 percent, respectively, which would have been incurred if the Questar acquisition had occurred on January 1, 1998 and 1997. 17 SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited) Estimated Net Quantities of Proved Reserves Proved reserves are estimated quantities of crude oil and natural gas which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. The following pro forma historical data as of December 31, 1998 gives effect to the acquisition of the Questar Properties. Questar Properties Company (Historical) Pro Forma ------- ------------ --------- Proved Reserves - --------------- Crude Oil, Condensate and Natural Gas Liquids (Barrels) 5,019,452 4,565,446 9,584,898 Natural Gas (Thousands of Cubic Feet) (MCF) 12,904,100 12,359,808 25,263,908
18 SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited) (continued) Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Reserves The following table sets forth the computation of the standardized measure of discounted future net cash flows relating to proved reserves, estimated by the Company as of December 31, 1998. Future cash inflows represent expected revenues from production of proved reserves based on December 31, 1998 prices and any fixed and determinable future escalation provided by contractual arrangements in existence at that date. Escalation based on inflation and supply and demand are not considered. Estimated future production and development costs related to future production of proved reserves are based on December 31, 1998 costs. Future income tax estimates are included based on tax rates currently in effect. A discount rate of 10% is applied to the annual future net cash flows. The methodology and assumptions used in calculating the standardized measure are those required by Statement of Financial Accounting Standards No. 69. This data is not intended to be representative of the fair market value of the properties' proved reserves. The valuation of revenues and costs do not necessarily reflect the amounts to be received or expended. In addition to the valuations used, numerous other factors are considered in evaluating known and prospective oil and gas reserves. Standardized measure (in thousands of dollars): Questar Company Properties Pro Forma ------- ---------- --------- Future cash inflows $ 74,282 $ 62,282 $ 136,564 Future production costs (38,158) (36,747) (74,905) Future development costs (773) (6,839) (7,612) --------- --------- --------- Future net cash flows 35,351 18,696 54,047 Future income tax benefit 487 4,625 5,112 --------- --------- --------- 35,838 23,321 59,159 Discount at 10 percent (11,348) (7,463) (18,811) --------- --------- --------- Standardized measure of discounted future net cash flows from estimated production of proved oil and gas reserves after income taxes $ 24,490 $ 15,858 $ 40,348 ========= ========= =========
19 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MAYNARD OIL COMPANY BY: /s/ Kenneth W. Hatcher -------------------------- Kenneth W. Hatcher Vice President of Finance Dated: January 25, 2000 20 -----END PRIVACY-ENHANCED MESSAGE-----