-----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, E/z/zGyArgzx0CBYfhD3AGjewe5aJo4WVQvjrOdPzKNUXlDiDHS2VI2LNbQp+0ZU XTMJumvjJO9NMnXFa3syoQ== 0000950152-02-000349.txt : 20020414 0000950152-02-000349.hdr.sgml : 20020413 ACCESSION NUMBER: 0000950152-02-000349 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020117 ITEM INFORMATION: FILED AS OF DATE: 20020123 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BELDEN & BLAKE CORP /OH/ CENTRAL INDEX KEY: 0000880114 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 341686642 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20100 FILM NUMBER: 02514732 BUSINESS ADDRESS: STREET 1: 5200 STONEHAM RD STREET 2: P O BOX 2500 CITY: NORTH CANTON STATE: OH ZIP: 44720 BUSINESS PHONE: 3304991660 MAIL ADDRESS: STREET 1: 5200 STONEHAM RD STREET 2: P O BOX 2500 CITY: NORTH CANTON STATE: OH ZIP: 44720 FORMER COMPANY: FORMER CONFORMED NAME: BELDEN & BLAKE ENERGY CORP /OH DATE OF NAME CHANGE: 19920427 8-K 1 l92369ae8-k.txt BELDEN & BLAKE CORPORATION FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event) January 17, 2002 BELDEN & BLAKE CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Ohio 0-20100 34-1686642 - ---------------------------- ------------------------ ------------------- (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 5200 Stoneham Road, North Canton, Ohio 44720 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (330) 499-1660 -------------------------------------------------- Registrant's telephone number, including area code ITEM 9. REGULATION FD DISCLOSURE Belden & Blake Corporation ("Belden & Blake" or the "Company") is furnishing the following information under Item 9 of this Current Report on Form 8-K. The information in this report is furnished pursuant to Item 9 and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, except if the Company specifically states that the information is to be considered "filed" under the Securities Exchange Act of 1934 or incorporates it by reference into a filing under the Securities Act of 1933 or the Securities Exchange Act of 1934. This report will not be deemed an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD. The information in this document includes forward-looking statements that are made pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, and the business prospects of Belden & Blake are subject to a number of risks and uncertainties which may cause the Company's actual results in future periods to differ materially from the forward-looking statements contained herein. These risks and uncertainties include, but are not limited to, the Company's access to capital, the market demand for and prices of oil and natural gas, the Company's oil and gas production and costs of operation, results of the Company's future drilling activities, the uncertainties of reserve estimates and environmental risks. These and other risks are described in the Company's 10-K and 10-Q reports and other filings with the Securities and Exchange Commission. NATURAL GAS HEDGE POSITION MONETIZATION AND RESTRUCTURING On January 17 and 18, 2002, the Company monetized 9,350 Bbtu (billion British thermal units) of its 2002 natural gas hedge position at a weighted average New York Mercantile Exchange ("NYMEX") price of $2.53 per Mmbtu (million British thermal units) and 3,840 Bbtu of its 2003 natural gas hedge position at a NYMEX price of $3.01 per Mmbtu. The Company received net proceeds of $22.7 million that will be recognized as natural gas revenue over the contract periods in 2002 and 2003. The Company entered into a collar for 9,350 Bbtu of its natural gas production in 2002 with a ceiling price of $4.00 and a floor price of $2.25 per Mmbtu. The Company also sold a floor at $1.75 per Mmbtu on this volume of gas. This aggregate structure, herein referred to as a three-way collar, has the effect of: 1) setting a maximum price of $4.00 per Mmbtu; 2) floating at prices from $2.25 to $4.00 per Mmbtu; 3) locking in a price of $2.25 per Mmbtu if prices are between $1.75 and $2.25 per Mmbtu; and 4) receiving a price of $0.50 per Mmbtu above the price if the price is $1.75 or less. All prices are based on monthly NYMEX settle. The Company paid $1.0 million for the three-way collar structure. The Company used the net proceeds of $21.7 million to pay down on its credit facility. The Company has a credit facility with a borrowing base of $100 million. At January 22, 2002, the Company had $2.3 million of outstanding letters of credit. At January 22, 2002, the outstanding balance under the credit facility was $37.8 million with $59.9 million of borrowing capacity available for general corporate purposes. The following table summarizes, as of January 21, 2002, the Company's deferred gains on terminated natural gas hedges. Cash has been received and the deferred gains recorded in accumulated other comprehensive income. The deferred gains will be recognized as increases to gas revenues during the periods in which the hedges were originally scheduled to mature.
2002 2003 ---------------------------------- ------- FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER ------- ------- ------- ------- (IN THOUSANDS) Natural Gas Hedges Terminated in January 2002 $4,102 $5,271 $5,254 $5,251 $2,861
To manage its exposure to natural gas or oil price volatility, the Company may partially hedge its physical gas or oil sales prices by selling futures contracts on the NYMEX or by selling NYMEX based commodity derivative contracts which are placed with major financial institutions that the Company believes are minimal credit risks. The contracts may take the form of futures contracts, swaps, collars or options. The Company's financial results and cash flows can be significantly impacted as commodity prices fluctuate widely in response to changing market conditions. Accordingly, the Company may modify its fixed price contract and financial hedging positions by entering into new transactions or terminating existing contracts. The following tables reflect the natural gas volumes and the weighted average prices under financial hedges (including settled hedges), fixed price contracts, three-way collars and costless collars at January 21, 2002:
NATURAL GAS SWAPS FIXED PRICE CONTRACTS ------------------------------------- --------------------------- ESTIMATED ESTIMATED NYMEX PRICE WELLHEAD ESTIMATED WELLHEAD QUARTER ENDING BBTU PER MMBTU PRICE PER MCF MMCF PRICE PER MCF - -------------- ----- ----------- ------------- ---------- ------------- March 31, 2002 850 $ 4.95 $ 5.20 1,070 $ 4.48 June 30, 2002 -- -- -- 820 4.20 September 30, 2002 -- -- -- 690 4.32 December 31, 2002 -- -- -- 570 4.49 --- ------ ------ ----- ------ 850 $ 4.95 $ 5.20 3,150 $ 4.37 === ====== ====== ===== ====== March 31, 2003 65 $ 2.50 June 30, 2003 65 2.50 September 30, 2003 65 2.50 December 31, 2003 65 2.50 ----- ------ 260 $ 2.50 ===== ======
THREE-WAY NATURAL GAS COLLARS ------------------------------------------------------------------------ MONTHLY NYMEX SETTLE OF MONTHLY NYMEX SETTLE LOWER $1.75 OR HIGHER THAN $1.75 ------------------------------ ----------------------------- NYMEX PRICE PER ESTIMATED NYMEX ESTIMATED MMBTU WELLHEAD PRICE PER WELLHEAD QUARTER ENDING BBTU FLOOR/CAP PRICE PER MCF MMBTU PRICE PER MCF - -------------- ----- ------------- ------------- ----------- -------------- March 31, 2002 1,700 $ 2.25 - 4.00 $ 2.50 - 4.25 Monthly Monthly June 30, 2002 2,550 2.25 - 4.00 2.40 - 4.15 NYMEX NYMEX September 30, 2002 2,550 2.25 - 4.00 2.40 - 4.15 settle plus settle plus December 31, 2002 2,550 2.25 - 4.00 2.47 - 4.22 $0.50 $0.65 to $0.75 ----- ------------- ------------- 9,350 $ 2.25 - 4.00 $ 2.44 - 4.19 ===== ============= =============
NATURAL GAS COLLARS ----------------------------------------------- NYMEX PRICE PER ESTIMATED MMBTU WELLHEAD BBTU FLOOR/CAP PRICE PER MCF ----- ------------- ------------- March 31, 2003 1,650 $ 3.40 - 5.23 $ 3.65 - 5.48 June 30, 2003 1,650 3.40 - 5.23 3.55 - 5.38 September 30, 2003 1,650 3.40 - 5.23 3.55 - 5.38 December 31, 2003 1,650 3.40 - 5.23 3.62 - 5.45 ----- ------------- ------------- 6,600 $ 3.40 - 5.23 $ 3.59 - 5.42 ===== ============= =============
MCF - THOUSAND CUBIC FEET MMBTU - MILLION BRITISH THERMAL UNITS MMCF - MILLION CUBIC FEET BBTU - BILLION BRITISH THERMAL UNITS Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: January 22, 2002 BELDEN & BLAKE CORPORATION (Registrant) By: /s/ Robert W. Peshek -------------------------------- Robert W. Peshek, Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----