S-3
1
SANTA FE ENERGY RESOURCES S-3
1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 29, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SANTA FE ENERGY RESOURCES, INC.
(Exact name of Registrant as specified in charter)
DELAWARE 36-2722169
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1616 SOUTH VOSS ROAD, SUITE 1000, HOUSTON, TEXAS 77057 (713) 507-5000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
DAVID L. HICKS, 1616 SOUTH VOSS ROAD, SUITE 1000, HOUSTON, TEXAS 77057
(713) 507-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPY TO:
G. Michael O'Leary
Andrews & Kurth L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
(713) 220-4200
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, as determined
by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1) FEE
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Common Stock, par value
$0.01 per share........... 13,071,992 shares $9.5625 $125,000,924 $43,104
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(1) Estimated solely for purpose of calculating the registration fee pursuant to
Rule 457(c) based upon the average of the high and low sales prices for the
Common Stock on the New York Stock Exchange for March 22, 1995.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MARCH 29, 1995
PROSPECTUS
13,071,992 SHARES
SANTA FE ENERGY RESOURCES, INC.
COMMON STOCK [LOGO]
This Prospectus relates to the offer and sale from time to time of 13,071,992
shares (the "Offered Shares") of common stock, par value $0.01 per share (the
"Common Stock"), of Santa Fe Energy Resources, Inc., a Delaware corporation (the
"Company"), by the selling stockholders named herein (the "Selling
Stockholders"). The Company will receive no part of the proceeds of the sales of
the Offered Shares, but will incur certain expenses in connection with the
offering. See "Selling Stockholders." The closing sales price of the Common
Stock as reported by the New York Stock Exchange ("NYSE") on March 27, 1995 was
$9 5/8 per share.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
INVESTORS, SEE "INVESTMENT CONSIDERATIONS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Selling Stockholders may from time to time offer and sell all or a portion
of the Offered Shares in transactions on the NYSE, in the over-the-counter
market, on any other national securities exchange on which the Common Stock is
listed or traded, in negotiated transactions or otherwise, at prices then
prevailing or related to the then-current market price or at negotiated prices.
The Offered Shares may be sold directly or through agents or broker-dealers
acting as principal or agent, or in block trades or pursuant to a distribution
by one or more underwriters on a firm commitment or best-efforts basis. To the
extent required, the names of any agent or broker-dealer and applicable
commissions or discounts and any other required information with respect to any
particular offer will be set forth in this Prospectus under the caption "Plan of
Distribution" or an accompanying Prospectus Supplement. Each of the Selling
Stockholders reserves the sole right to accept or reject, in whole or in part,
any proposed purchase of the Offered Shares to be made directly or through
agents. The Selling Stockholders and any agents or broker-dealers participating
in the distribution of the Offered Shares may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"), and any profit on the sale of Offered Shares by the Selling Stockholders
and any commissions received by any such agents or broker-dealers may be deemed
to be underwriting commissions or discounts under the Securities Act. The
Company will not receive any of the proceeds from the sale of any Offered Shares
by the Selling Stockholders, but has agreed to bear certain expenses of
registration of the Offered Shares under Federal and state securities laws.
THE OFFERED SHARES HAVE NOT BEEN REGISTERED FOR SALE BY THE SELLING STOCKHOLDERS
UNDER THE SECURITIES LAWS OF ANY STATE AS OF THE DATE OF THIS PROSPECTUS.
BROKERS OR DEALERS EFFECTING TRANSACTIONS IN THE OFFERED SHARES SHOULD CONFIRM
THE REGISTRATION THEREOF UNDER THE SECURITIES LAWS OF THE STATES IN WHICH SUCH
TRANSACTIONS OCCUR, OR THE EXISTENCE OF AN EXEMPTION FROM REGISTRATION.
The date of this Prospectus is March , 1995.
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DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company with the Securities
and Exchange Commission (the "Commission") pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated herein by reference: (i) the Company's Annual Report on Form 10-K
for the year ended December 31, 1994; (ii) information set forth under the
captions "Election of Directors," "Security Ownership of Certain Beneficial
Owners," "Certain Relations and Related Transactions," "Summary Compensation
Table," "Aggregated Options/SAR Exercises in 1994 and 1994 Year End Option/SAR
Values," "Performance Graph," "Benefit Plans" and "Stock Ownership of Directors
and Executive Officers" of the Company's Proxy Statement, dated as of March 21,
1995 for the 1995 Annual Meeting of Stockholders and (iii) the description of
the Common Stock contained in the Company's Registration Statement on Form 8-A
(File No. 1-7667) filed on February 21, 1990.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Offered Shares shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modified or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Any person receiving a copy of this Prospectus may obtain without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such documents).
Requests should be addressed to the Company at its principal executive offices
at Santa Fe Energy Resources, Inc., 1616 South Voss Road, Suite 1000, Houston,
Texas 77057 (telephone (713) 507-5000); Attention: Mark A. Older, Senior Counsel
and Secretary.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and the rules and regulations promulgated thereunder and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Reports, proxy statements and other information filed by the Company
with the Commission may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549-1004, and at the following Regional
Offices of the Commission: Chicago Regional Office, CitiCorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60621 2511; and New York Regional
Office, 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of
such material may also be obtained at prescribed rates from the Public Reference
Section of the Commission at its principal office at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549-1004. The Company's Common Stock, its
Convertible Preferred Stock, Series 7% and its $.732 Series A Convertible
Preferred Stock are listed for trading on the NYSE. The Company's registration
statements, reports, proxy statements and other information may also be
inspected at the offices of the NYSE, 20 Broad Street, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement.
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THE COMPANY
Santa Fe Energy Resources, Inc. is engaged in the exploration, development
and production of oil and natural gas in the continental United States and in
certain foreign areas. At December 31, 1994, the Company had estimated worldwide
proved reserves of oil and natural gas totaling 298.7 million barrels of oil
equivalent (consisting of approximately 258.3 million barrels of oil and
approximately 242.4 billion cubic feet of natural gas), of which approximately
92% were domestic reserves and approximately 8% were foreign reserves. During
1994, the Company's worldwide production aggregated approximately 88.5 thousand
barrels of oil equivalent per day, of which approximately 74% was crude oil and
approximately 26% was natural gas. A substantial portion of the Company's
domestic oil production is in long-lived fields with well-established production
histories. The Company has focused it activities on its three domestic core
areas--the Permian Basin in Texas and New Mexico, the offshore Gulf of Mexico
and the San Joaquin Valley of California--as well as in Argentina and Indonesia.
USE OF PROCEEDS
The Company will not receive any of the proceeds from sales of the Offered
Shares by the Selling Stockholders. All costs and expenses incurred in
connection with the registration under the Securities Act of the offering made
hereby will be paid by the Company, other than any brokerage fees and
commissions, fees and disbursements of legal counsel for the Selling
Stockholders and stock transfer and other taxes attributable to the sale of the
Offered Shares, which will be paid by the Selling Stockholders.
INVESTMENT CONSIDERATIONS
Prospective investors should carefully consider all of the information
contained in and incorporated by reference in this Prospectus, and in particular
the investment considerations described in the following paragraphs.
EFFECTS OF CHANGING PRODUCT PRICES
The Company's profitability is determined in large part by the difference
between the prices received for the oil and natural gas that it produces and the
costs of finding and producing such resources. Prices for oil and gas have been
subject to wide fluctuations, which continue to reflect imbalances in supply and
demand as well as other market conditions and the world political situation as
it affects OPEC, the Middle East (including the current embargo of Iraqi crude
oil from worldwide markets), Eastern Europe, the former Soviet Union and other
producing countries. Moreover, the price of oil and natural gas may be affected
by the price and availability of alternative sources of energy, weather
conditions and the general state of the economy. Even relatively modest changes
in oil and gas prices may significantly change the Company's revenues, results
of operations, cash flows and proved reserves. Since the Company is primarily an
oil producer, a change in the price paid for its oil production more
significantly affects its results of operations than a change in natural gas
prices.
The Company's cash flow from operating activities is a function of the
volumes of oil and gas produced from the Company's properties and the sales
prices realized therefor. Crude oil and natural gas are depleting assets.
Therefore, unless the Company replaces over the long term the oil and natural
gas produced from the Company's properties, the Company's assets will be
depleted over time and its ability to service and incur debt at constant or
declining prices will be reduced.
EFFECTS OF HEAVY OIL PRODUCTION
A substantial portion of the Company's oil production consists of heavy oil
produced from the Midway-Sunset Field. The market for such heavy crude oil
production differs substantially from the remainder of the domestic crude oil
market, due principally to the higher transportation and refining costs
associated with heavy crude. As a result, the profit margin realized from the
sale of heavy oil is generally
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lower than that realized from the sale of light oil, because the costs to
produce heavy oil are generally higher, and the price paid for heavy crude oil
is generally lower, than the price paid for light crudes. Furthermore, there is
currently an oversupply of crude oil in the California market that has had an
adverse effect on the prices paid for crude oil in that market.
POSSIBLE IMPAIRMENT OF OIL AND GAS PROPERTIES
The Company follows the successful efforts method of accounting for its oil
and gas exploration and production activities. Under this method, costs (both
tangible and intangible) of productive wells and development dry holes, as well
as the costs of prospective acreage, are capitalized. The costs of drilling and
equipping exploratory wells which do not result in proved reserves are expensed
upon the determination that the well does not justify commercial development.
Other exploratory costs, including geological and geophysical costs and delay
rentals, are charged to expense as incurred.
The Company periodically reviews individual proved properties to determine
if the carrying value of the field as reflected in its accounting records
exceeds the estimated undiscounted future net revenues from proved oil and gas
reserves attributable to the field. Based on this review and the continuing
evaluation of development plans, economics and other factors, if appropriate,
the Company records impairments (additional depletion and depreciation) to the
extent that the carrying value exceeds the estimated undiscounted future net
revenues. Such impairments constitute a charge to earnings which does not impact
the Company's cash flow from operating activities. However, such writedowns
impact the amount of the Company's stockholders' equity and, therefore, the
ratio of debt-to-equity. The risk that the Company will be required to write
down the carrying value of its oil and natural gas properties increases when oil
and natural gas prices are depressed. For example, the Company recorded
impairments of $99.3 million in 1993; none were recorded in 1994. No assurance
can be given that the Company will not experience additional impairments in the
future.
GOVERNMENTAL AND ENVIRONMENTAL REGULATION
The Company's activities are subject to various federal, state and local
laws and regulations covering the discharge of material into the environment or
otherwise relating to protection of the environment. In particular, the
Company's oil and gas exploration, development, production and enhanced oil
recovery operations, its activities in connection with storage and
transportation of liquid hydrocarbons and its use of facilities for treating,
processing, recovering or otherwise handling hydrocarbons and waste therefrom
are subject to stringent environmental regulation by governmental authorities.
Such regulations have increased the costs of planning, designing, drilling,
installing, operating and abandoning the Company's oil and gas wells and other
facilities.
The Company has expended significant resources, both financial and
managerial, to comply with environmental regulations and permitting requirements
and anticipates that it will continue to do so in the future. Although the
Company believes that its operations and facilities are in general compliance
with applicable environmental regulations, risks of substantial costs and
liabilities are inherent in oil and gas operations, and there can be no
assurance that significant costs and liabilities will not be incurred in the
future. Moreover, it is possible that other developments, such as increasingly
strict environmental laws, regulations and enforcement policies thereunder, and
claims for damages to property, employees, other persons and the environment
resulting from the Company's operations, could result in substantial costs and
liabilities in the future.
UNCERTAINTIES IN ESTIMATES OF PROVED RESERVES
Proved reserves of crude oil and natural gas are estimated quantities that
geological and engineering data demonstrate with reasonable certainty to be
economically producible under existing conditions. There are numerous
uncertainties inherent in estimating quantities of proved reserves and in
projecting future rates of production and timing of development expenditures.
All reserve estimates are to some degree speculative and various classifications
of reserves only constitute attempts to define the degree
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of speculation involved. The accuracy of any reserve estimate is a function of
the quality of available data and engineering and geological interpretation and
judgment and the assumptions used regarding prices for crude oil, natural gas
liquids and natural gas. Results of drilling, testing and production and changes
in crude oil, natural gas liquids and natural gas prices after the date of the
estimate may require substantial upward or downward revisions. Although a
substantial portion of the Company's proved oil reserves is in long-lived fields
with well-established production histories where enhanced oil recovery and other
development projects are employed to produce such reserves, the external factors
discussed above will directly affect the Company's determination to proceed with
any of such projects and, therefore, the quantity of reserves in these fields
classified as proved. The reserve estimates incorporated by reference in this
Prospectus were prepared as of a date prior to the date of this Prospectus and
could be materially different from the quantities of crude oil, natural gas
liquids and natural gas that ultimately will be recovered from the Company's
properties.
In addition, actual future net cash flows from production of the Company's
reserves will be affected by factors such as actual production, supply and
demand for oil and natural gas, curtailments or increases in consumption by
natural gas purchasers, changes in governmental regulations or taxation and the
impact of inflation on costs. The timing of actual future net revenues from
proved reserves, and thus their actual present value, can be affected by the
timing of the incurrence of expenditures in connection with development of oil
and gas properties. The 10% discount factor, which is required by the Commission
to be used to calculate present value for reporting purposes, is not necessarily
the most appropriate discount factor based on interest rates in effect from time
to time and risks associated with the oil and gas industry. Discounted present
value, no matter what discount rate is used, is materially affected by
assumptions as to the amount and timing of future production, which may and
often do prove to be inaccurate.
INDUSTRY CONSIDERATIONS
The Company's business is the exploration for, and the development and
production of, oil and natural gas. Exploration for oil and natural gas involves
many risks, which even a combination of experience, knowledge and careful
evaluation may not be able to overcome. In addition, there is strong competition
relating to all aspects of the oil and gas industry, and in particular in the
exploration and development of new oil and gas reserves. The Company must
compete with a substantial number of other oil and natural gas companies, many
of which have significantly greater financial resources.
All of the Company's oil and gas activities are subject to the risks
normally incident to exploration for and production of oil and gas, including
blowouts, cratering, spillage and fires, each of which could result in damage to
life and property. Offshore operations are subject to usual marine perils,
including hurricanes and other adverse weather conditions, and governmental
regulations as well as interruption or termination by governmental authorities
based on environmental and other considerations. In accordance with customary
industry practices, the Company carries insurance against some, but not all, of
the risks associated with the Company's business. Losses and liabilities arising
from such events would reduce revenues and increase costs to the Company to the
extent not covered by insurance.
Another risk inherent in the oil and gas industry is the risk that a well
will be a dry hole or a marginal producer that will not, in either case, repay
the entire cost of drilling, testing, completing and equipping the well. There
can be no assurance, therefore, that the Company's future exploration and
development wells will be financially successful.
INTERNATIONAL OPERATIONS
Foreign properties, operations or investment may be adversely affected by
local political and economic developments, exchange controls, currency
fluctuations, royalty and tax increases, retroactive tax claims, expropriation,
import and export regulations and other foreign laws or policies as well as by
laws and policies of the United States affecting foreign trade, taxation and
investment. In addition, in the event of a dispute arising from foreign
operations, the Company may be subject to the exclusive
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jurisdiction of foreign courts or may not be successful in subjecting foreign
persons to the jurisdiction of courts in the United States. The Company may also
be hindered or prevented from enforcing its rights with respect to a
governmental instrumentality because of the doctrine of sovereign immunity.
RESTRICTIONS ON PAYMENT OF DIVIDENDS
Certain of the Company's credit agreements restrict the payment of
dividends to the holders of the Company's capital stock, including the Common
Stock. In addition, the terms of the Company's outstanding Preferred Stock
restrict any dividend payment by the Company to holders of Common Stock unless
all dividends on the Preferred Stock for all past dividend periods shall have
been paid, or declared and a sum sufficient for the payment thereof set apart.
The determination of the amount of future cash dividends, if any, to be declared
and paid is in the sole discretion of the Company's Board of Directors and will
depend on dividend requirements with respect to the Company's Preferred Stock,
the Company's financial condition, earnings and funds from operations, the level
of its capital and exploration expenditures, dividend restrictions in its
financing agreements, its future business prospects and other matters as the
Company's Board of Directors deems relevant.
SELLING STOCKHOLDERS
This Prospectus relates to the sale by Itel Corporation ("Itel") from time
to time of up to 8,064,005 Offered Shares. The shares to be offered by Itel were
originally acquired by Itel in connection with the spinoff of the Company's
shares by Santa Fe Pacific Corporation, formerly the parent corporation of the
Company, which distribution was made on December 4, 1990. Rod F. Dammeyer, the
President, Chief Executive Officer and a director of Itel, has been a director
of the Company since 1990. Mr. Dammeyer has advised the Company that if,
following the sale by Itel of Offered Shares, Itel's remaining ownership
interest in the Company is substantially reduced, Mr. Dammeyer intends to resign
his position as a director of the Company.
This Prospectus also relates to the sale by Zell/Chilmark Fund, L.P.
("Zell/Chilmark") from time to time of up to 5,007,987 Offered Shares. The
shares to be offered by Zell/Chilmark are currently included in the shares
reported as owned by HC Associates, a Delaware general partnership ("HC") of
which Zell/Chilmark is currently a partner. As reported at February 1, 1994, HC
is the owner of 10,211,078 shares of Common Stock. Zell/Chilmark has advised the
Company that, prior to any sales by Zell/Chilmark pursuant to this Prospectus,
HC will undergo either a partial or complete liquidation pursuant to which
Zell/Chilmark will receive a distribution or distributions of the 5,007,987
Offered Shares that may be offered and sold by Zell/Chilmark pursuant to this
Prospectus. The distribution to Zell/Chilmark of the 5,007,987 Offered Shares
will require compliance with the reporting and waiting period requirements of
the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended. David M.
Schulte, whose relationship to Zell/Chilmark is described in footnote 4 to the
following table, has been a director of the Company since 1994. Mr. Schulte has
advised the Company that if Zell/Chilmark sells all of the Offered Shares that
it owns, Mr. Schulte intends to resign his position as a director of the
Company.
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The following table provides certain information with respect to Itel and
Zell/Chilmark (collectively, the "Selling Stockholders") and the number of
shares of Common Stock currently owned, offered hereby and to be owned by the
Selling Stockholders after this offering assuming all Offered Shares are sold in
this offering.
MAXIMUM NUMBER OF SHARES
NUMBER OF SHARES NUMBER OF SHARES TO BE OWNED
NAME AND ADDRESS OF OWNED BEFORE TO BE SOLD IN AFTER
SELLING STOCKHOLDER THE OFFERING(1) THE OFFERING(2) THE OFFERING(2)
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Itel Corporation(3)..................... 8,064,005 8,064,005 -0-
Two North Riverside Plaza
Chicago, Illinois 60606
Zell/Chilmark Fund, L.P.(4)............. 5,007,987 5,007,987 -0-
Two North Riverside Plaza
Suite 1500
Chicago, Illinois 60606
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(1) Each Selling Stockholder has claimed sole voting and investment power
concerning these shares except as noted below.
(2) There is no assurance that the Selling Stockholders will sell any or all of
the Offered Shares.
(3) At February 17, 1994, Samuel Zell and Anne Lurie, by virtue of their
positions as trustees and beneficiaries of trusts, and Sheli Rosenberg by
virtue of her position as co-trustee of one of the trusts, might be deemed
to be beneficial owners of approximately 26% of Itel's outstanding common
stock. Mr. Zell, Mrs. Lurie and Mrs. Rosenberg might be considered to be
controlling persons of Itel and, accordingly, might be deemed to own
beneficially the Company's Common Stock described above. Mr. Zell, Mrs.
Lurie and Mrs. Rosenberg have disclaimed beneficial ownership of the
Company's Common Stock held by Itel.
(4) The sole general partner of Zell/Chilmark is ZC Limited Partnership, an
Illinois limited partnership ("ZC Limited"). No limited partner in
Zell/Chilmark acts as a general partner or has control over Zell/Chilmark.
The sole general partner of ZC Limited is ZC Partnership, a Delaware general
partnership ("ZC"). ZC's partners are ZC, Inc., an Illinois corporation
("ZCI"), and CZ Inc., a Delaware corporation ("CZI"). The terms of the
partnership agreements of ZC Limited and ZC give the shareholders of ZCI and
CZI indirect control over ZC Limited and therefore, ultimately,
Zell/Chilmark. Samuel Zell is the sole director and president, Donald W.
Phillips is vice president, Sheli Z. Rosenberg is vice president and
secretary and Arthur A. Greenberg is vice president and treasurer of ZCI.
David M. Schulte is sole director and sole shareholder, president, secretary
and treasurer, Joel S. Friedland is vice president and assistant secretary
and Matthew Rosenberg is vice president and assistant secretary of CZI.
Melvyn N. Klein, a director of the Company, serves as a director of Itel.
Additionally, Samuel Zell, president and sole director of ZCI (which may be
deemed to control a partner of HC), is Chairman of the Board, and may be
deemed to be a principal stockholder, of Itel. Itel beneficially owns
8,064,005 shares of the Company's Common Stock. Itel is not a partner of HC,
and there are no contracts, arrangements or understandings between HC and
Itel with respect to any securities of the Company and HC, as well as
Messrs. Zell and Klein, disclaim beneficial ownership of the shares of
Common Stock beneficially owned by Itel. Mr. Klein is also the sole director
and stockholder of a corporation that is a general partner of a limited
partnership that serves as the general partner of GKH Investments, L.P.
("GKHPLP") and as the manager of GKH Private Limited ("GKHPL"). GKHPLP and
GKHPL currently own a combined approximate 49% interest in HC. Mr. Klein
disclaims beneficial ownership of the shares of Common Stock owned by
KHPLP, GKHPL and HC.
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PLAN OF DISTRIBUTION
Either of the Selling Stockholders may from time to time, in one or more
transactions, sell all or a portion of the Offered Shares on the NYSE, in the
over-the-counter market, on any other national securities exchange on which the
Common Stock is listed or traded, in negotiated transactions, in underwritten
transactions or otherwise, at prices then prevailing or related to the then
current market price or at negotiated prices. The offering price of the Offered
Shares from time to time will be determined by the Selling Stockholders and, at
the time of such determination, may be higher or lower than the market price of
the Common Stock on the NYSE. In connection with an underwritten offering,
underwriters or agents may receive compensation in the form of discounts,
concessions or commissions from a Selling Stockholder or from purchasers of
Offered Shares for whom they may act as agents, and underwriters may sell
Offered Shares to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agents. Under
agreements that may be entered into by the Company, underwriters, dealers and
agents who participate in the distribution of Offered Shares may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments which such underwriters, dealers or agents may be required to make in
respect thereof. The Offered Shares may be sold directly or through
broker-dealers acting as principal or agent, or pursuant to a distribution by
one or more underwriters on a firm commitment or best-efforts basis. The methods
by which the Offered Shares may be sold include (a) a block trade in which the
broker-dealer so engaged will attempt to sell the Offered Shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this Prospectus; (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
(d) an exchange distribution in accordance with the rules of the NYSE; (e)
privately-negotiated transactions; and (f) underwritten transactions. The
Selling Stockholders and any underwriters, dealers or agents participating in
the distribution of the Offered Shares may be deemed to be "underwriters" within
the meaning of the Securities Act, and any profit on the sale of the Offered
Shares by the Selling Stockholders and any commissions received by any such
broker-dealers may be deemed to be underwriting commissions under the Securities
Act.
When a Selling Stockholder elects to make a particular offer of Offered
Shares, a prospectus supplement, if required, will be distributed that will
identify any underwriters, dealers or agents and any discounts, commissions and
other terms constituting compensation from such Selling Stockholder and any
other required information.
In order to comply with the securities laws of certain states, if
applicable, the Offered Shares may be sold only through registered or licensed
brokers or dealers. In addition, in certain states, the Offered Shares may not
be sold unless they have been registered or qualified for sale in such state or
an exemption from such registration or qualification requirement is available
and is complied with.
The Company has agreed to pay all costs and expenses incurred in connection
with the registration under the Securities Act of the Offered Shares, including,
without limitation, all registration and filing fees, printing expenses and fees
and disbursements of counsel and accountants for the Company. The Selling
Stockholders will pay any brokerage fees and commissions, fees and disbursements
of legal counsel for the Selling Stockholders and stock transfer and other taxes
attributable to the sale of the Offered Shares. The Company also has agreed to
indemnify each of the Selling Stockholders and their respective partners,
officers and directors and each person who controls (within the meaning of the
Securities Act) such Selling Stockholder against certain losses, claims, damages
and expenses arising under the securities laws in connection with this offering.
Each of the Selling Stockholders has agreed to indemnify the Company, its
officers, directors and stockholders and each person who controls (within the
meaning of the Securities Act) the Company against other losses, claims, damages
and expenses arising under the securities laws in connection with this offering
with respect to written information furnished to the Company by such Selling
Stockholder; provided, however, that the indemnification obligation is several,
not joint, as to each Selling Stockholder.
8
10
There is no assurance that the Selling Stockholders will sell any or all of
the Offered Shares.
LEGAL OPINION
Certain matters with respect to the legality of the securities offered
hereby will be passed upon for the Company by Andrews & Kurth L.L.P., Houston,
Texas.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 1994, have been
so incorporated in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
Certain information incorporated in this Prospectus by reference regarding
the estimated quantities of reserves of the oil and natural gas properties owned
by the Company, the future net revenues from such reserves and the present value
thereof is based on estimates of such reserves and present values prepared by
Ryder Scott Company, independent petroleum engineers.
9
11
NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN 13,071,992 SHARES
THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING COVERED BY THIS
PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, SANTA FE ENERGY
OR A SOLICITATION OF AN OFFER TO BUY,
THE OFFERED SHARES IN ANY RESOURCES, INC.
JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS NOT BEEN COMMON STOCK
ANY CHANGE IN THE FACTS
SET FORTH IN THIS PROSPECTUS OR IN
THE AFFAIRS OF THE COMPANY SINCE [LOGO]
THE DATE HEREOF.
---------------
TABLE OF CONTENTS
PAGE
------
Documents Incorporated by Reference.... 2
Available Information.................. 2
The Company............................ 3
Use of Proceeds........................ 3
Investment Considerations.............. 3
Selling Stockholders................... 6
Plan of Distribution................... 8
Legal Opinion.......................... 9
Experts................................ 9
PROSPECTUS
DATED MARCH , 1995
12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
All capitalized terms used and not defined in Part II of this Registration
Statement shall have the meanings assigned to them in the Prospectus which forms
a part of this Registration Statement.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses payable by the Company in connection with this
offering are as follows:
SEC registration fee..................................................... $ 43,104
Accounting fees and expenses............................................. 3,000
Legal fees and expenses.................................................. 30,000
Printing expenses........................................................ 20,000
Blue Sky fees and expenses............................................... 10,000
Miscellaneous............................................................ 3,896
---------
Total*................................................................. $ 110,000
=========
---------------
* Total expenses to be paid by the Company will not include underwriters' and
brokers' discounts or commissions, if any, and legal or accounting fees, if
any, attributable to the sale of Offered Shares by the Selling Stockholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware empowers a corporation to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section 145
or in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that indemnification provided for by Section 145
shall not be deemed exclusive of
II-1
13
any other rights to which the indemnified party may be entitled; that
indemnification provided by Section 145 shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of such person's
heirs, executors and administrators; and empowers the corporation to purchase
and maintain insurance on behalf of a director or officer of the corporation
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liabilities under Section
145.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision eliminating
or limiting the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided that such provision shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
Article NINTH of the Company's Restated Certificate of Incorporation states
that:
"No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages from breach of
fiduciary duty by such director as a director; provided, however, that this
Article NINTH shall not eliminate or limit the liability of a director to
the extent provided by applicable law (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any transaction from
which the director derived an improper personal benefit. No amendment to or
repeal of this Article NINTH shall apply to, or have any effect on, the
liability or alleged liability of any director of the Corporation for or
with respect to any facts or omissions of such director occurring prior to
such amendment or repeal. If the General Corporation Law of the State of
Delaware is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a
director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law of the State of Delaware,
as so amended."
Article VI of the Company's Bylaws further provides that the Company shall
indemnify its officers, directors and employees to the fullest extent permitted
by law. Pursuant to such provision, the Company has entered into agreements with
various of its officers, directors and employees which provide for
indemnification of such persons.
The Company maintains a $25,000,000 policy of officers' and directors'
liability insurance.
ITEM 16. EXHIBITS.
4.1 Specimen certificate representing shares of Common Stock (filed as Exhibit 4.1
to the Company's Registration Statement on Form S-1 (Reg. No. 33-32831) and
incorporated herein by reference).
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Andrews & Kurth L.L.P. (included in their opinion filed as Exhibit
5.1).
23.3 Consent of Ryder Scott Company, independent petroleum engineers.
24.1 A power of attorney, pursuant to which amendments to this Registration Statement
may be filed, is included on the signature page contained in Part II of this
Registration Statement.
II-2
14
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement:
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 of this Registration
Statement, or otherwise, the registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Santa Fe Energy
Resources, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on March 29,1995.
SANTA FE ENERGY RESOURCES, INC.
By: /s/ JAMES L. PAYNE
James L. Payne, Chairman of
the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Know all men by these presents, that each of the undersigned officers and
directors of Santa Fe Energy Resources, Inc. hereby constitutes and appoints
James L. Payne, R. Graham Whaling and David L. Hicks, and each or any of them,
as his or her true and lawful attorneys-in-fact and agents, with full power of
substitution, for him or her and in his or her name, place and stead, in any and
all capacities to sign any or all amendments or post-effective amendments to
this Registration Statement, and to file the same, and with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or any of them or their substitutes, may
lawfully do or cause to be done by virtue hereof.
SIGNATURE TITLE DATE
------------------------------------- -------------------------------------- ---------------
/s/ JAMES L. PAYNE Chairman of the Board, President and March 29, 1995
James L. Payne Chief Executive Officer and Director
(Principal executive officer)
/s/ R. GRAHAM WHALING Senior Vice President and Chief March 29, 1995
R. Graham Whaling Financial Officer (Principal financial
and accounting officer)
/s/ ROD F. DAMMEYER Director March 29, 1995
Rod F. Dammeyer
/s/ WILLIAM E. GREEHEY Director March 29, 1995
William E. Greehey
Director March , 1995
Melvyn N. Klein
/s/ ROBERT D. KREBS Director March 29, 1995
Robert D. Krebs
II-4
16
SIGNATURE TITLE DATE
------------------------------------- -------------------------------------- ---------------
/s/ ALLAN V. MARTINI Director March 29, 1995
Allan V. Martini
Director March , 1995
Michael A. Morphy
Director March , 1995
Reuben F. Richards
/s/ DAVID M. SCHULTE Director March 29, 1995
David M. Schulte
/s/ MARC J. SHAPIRO Director March 29, 1995
Marc J. Shapiro
/s/ ROBERT F. VAGT Director March 29, 1995
Robert F. Vagt
/s/ KATHRYN D. WRISTON Director March 29, 1995
Kathryn D. Wriston
II-5
17
EXHIBIT INDEX
EXHIBITS DESCRIPTION
-------- -----------
4.1 Specimen certificate representing shares of Common Stock (filed as
Exhibit 4.1 to the Company's Registration Statement on Form S-1 (Reg. No.
33-32831) and incorporated herein by reference).
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Andrews & Kurth L.L.P. (included in their opinion filed as
Exhibit 5.1).
23.3 Consent of Ryder Scott Company, independent petroleum engineers.
24.1 A power of attorney, pursuant to which amendments to this Registration
Statement may be filed, is included on the signature page contained in
Part II of this Registration Statement.
EX-5.1
2
OPINION OF ANDREWS & KURTH
1
EXHIBIT 5.1
[LETTERHEAD OF ANDREWS & KURTH L.L.P.]
March 28, 1995
Board of Directors
Santa Fe Energy Resources, Inc.
1616 South Voss Road, Suite 1000
Houston, Texas 77057
Gentlemen:
We have acted as counsel to Santa Fe Energy Resources, Inc., a Delaware
corporation (the "Company"), in connection with the Company's registration
statement on Form S-3 (the "Registration Statement") relating to the
registration under the Securities Act of 1933, as amended, of an aggregate
13,071,992 shares of common stock, par value $0.01 per share (the "Common
Stock"), of the Company to be offered by the selling stockholders named in the
Registration Statement.
In such cpacity, we have examined such corporate records and documents,
certificates of corporate and public officials and such other instruments as
we have deemed necessary for the purposes of the opinions contained herein. As
to all matters of fact material to such opinions, we have relied upon the
representations of officers of the Company. We have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
and the conformity with the original of all documents submitted to us as
copies.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the 13,071,992
shares of Common Stock to be offered by the selling stockholders named in the
Registration Statement are duly authorized, validly issued, fully-paid and
nonassessable.
We hereby consent to the inclusion of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ ANDREWS & KURTH L.L.P.
-------------------------------
Andrews & Kurth L.L.P.
1198/2409
EX-23.1
3
CONSENT OF PRICE WATERHOUSE
1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
March 10, 1995 appearing on Page 32 of Santa Fe Energy Resources, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1994. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Houston, Texas
March 28, 1995
EX-23.3
4
CONSENT OF RYDER SCOTT
1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
We hereby consent to the incorporation by reference in the Prospectus
forming a part of this Registration Statement on Form S-3 of references to our
firm appearing in Santa Fe Energy Resources, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1994. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
March 28, 1995