8-K 1 l08493ae8vk.txt BELDEN & BLAKE 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) June 25, 2004 ------------- 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 2. ACQUISITION OR DISPOSITION OF ASSETS On June 25, 2004, Belden & Blake Corporation (the "Company") completed the previously announced sale of substantially all of its Trenton Black River ("TBR") assets to Fortuna Energy Inc. ("Fortuna"), a wholly owned subsidiary of Talisman Energy Inc. of Calgary, Alberta, for $65 million in cash. The assets sold include working interests in approximately 16 wells, 11 miles of natural gas gathering lines and oil and gas leases on approximately 475,000 gross acres. The assets are located primarily in New York, Pennsylvania, Ohio and West Virginia. The TBR assets accounted for approximately 5 Bcfe of the Company's estimated proved reserves as of December 31, 2003 and approximately 2 Mmcfe per day of our average daily production for the quarter ending March 31, 2004. The total production from TBR assets for the year ended 2003 was approximately 75 Mmcfe and for the first quarter of 2004 was approximately 157 Mmcfe. The Company also sold the Michigan assets of its Arrow Oilfield Services division ("Arrow") in May 2004 and sold the Ohio and Pennsylvania-related assets of Arrow in June 2004 for net proceeds of approximately $3.6 million. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (b) PRO FORMA FINANCIAL INFORMATION Belden & Blake Corporation Unaudited Pro Forma Consolidated Financial Statements Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 2004 Unaudited Pro Forma Consolidated Statements of Operations for the year ended December 31, 2003 and for the three months ended March 31, 2004 Notes to Unaudited Pro Forma Consolidated Financial Statements BELDEN & BLAKE CORPORATION UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS The following tables set forth certain of our pro forma financial information after giving effect to the sale of the Arrow assets and the TBR operations and the application of the proceeds therefrom (the "Sale of Assets"). The unaudited pro forma consolidated balance sheet as of March 31, 2004 is based on our unaudited historical consolidated balance sheet as of March 31, 2004 and gives effect to the Sale of Assets as if it had occurred on March 31, 2004. The unaudited pro forma consolidated statement of operations for the year ended December 31, 2003 has been derived from our audited consolidated financial statements for the year ended December 31, 2003. The unaudited pro forma consolidated statement of operations for the three months ended March 31, 2004 has been derived from our unaudited financial statements for the three month period ended March 31, 2004. The pro forma statements of operations give effect to the Sale of Assets as if it occurred on January 1, 2003. The pro forma information presented herein does not purport to be indicative of the financial position or results of operations that would have actually occurred had the Sale of Assets occurred on the dates indicated or which may occur in the future. All pro forma adjustments are based on preliminary estimates and assumptions and are subject to revision. BELDEN & BLAKE CORPORATION PRO FORMA CONSOLIDATED BALANCE SHEET MARCH 31, 2004 (UNAUDITED, IN THOUSANDS)
PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA ---------------- ---------------- ---------------- (a) ASSETS ------ CURRENT ASSETS Cash and cash equivalents $ 1,673 $ 23,098 $ 24,771 Accounts receivable, net 17,689 -- 17,689 Inventories 894 (15) 879 Deferred income taxes 9,021 -- 9,021 Other current assets 2,361 -- 2,361 Fair value of derivatives 615 -- 615 ---------------- ---------------- ---------------- TOTAL CURRENT ASSETS 32,253 23,083 55,336 PROPERTY AND EQUIPMENT, AT COST Oil and gas properties (successful efforts method) 471,912 (13,508) 458,404 Gas gathering systems 15,256 -- 15,256 Land, buildings, machinery and equipment 23,069 (9,868) 13,201 ---------------- ---------------- ---------------- 510,237 (23,376) 486,861 Less accumulated depreciation, depletion and amortization 260,576 (6,209) 254,367 ---------------- ---------------- ---------------- PROPERTY AND EQUIPMENT, NET 249,661 (17,167) 232,494 FAIR VALUE OF DERIVATIVES 794 -- 794 OTHER ASSETS 6,942 (1,354) 5,588 ---------------- ---------------- ---------------- $ 289,650 $ 4,562 $ 294,212 ================ ================ ================ LIABILITIES AND SHAREHOLDERS' DEFICIT CURRENT LIABILITIES Accounts payable $ 4,213 $ -- $ 4,213 Accrued expenses 19,498 -- 19,498 Current portion of long-term liabilities 729 -- 729 Fair value of derivatives 20,880 -- 20,880 ---------------- ---------------- ---------------- TOTAL CURRENT LIABILITIES 45,320 -- 45,320 LONG-TERM LIABILITIES Bank and other long-term debt 45,437 (45,437) -- Senior subordinated notes 225,000 -- 225,000 Other 4,727 (567) 4,160 ---------------- ---------------- ---------------- 275,164 (46,004) 229,160 FAIR VALUE OF DERIVATIVES 10,320 -- 10,320 DEFERRED INCOME TAXES 18,698 18,710 37,408 SHAREHOLDERS' DEFICIT Common stock without par value; $.10 stated value per share; authorized 58,000,000 shares; issued 10,674,803 (which includes 220,784 treasury shares) 1,045 -- 1,045 Paid in capital 107,565 -- 107,565 Deficit (148,604) 31,856 (116,748) Accumulated other comprehensive loss (19,858) -- (19,858) ---------------- ---------------- ---------------- TOTAL SHAREHOLDERS' DEFICIT (59,852) 31,856 (27,996) ---------------- ---------------- ---------------- $ 289,650 $ 4,562 $ 294,212 ================ ================ ================
See notes to pro forma consolidated financial statements. BELDEN & BLAKE CORPORATION PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS)
YEAR ENDED DECEMBER 31, 2003 THREE MONTHS ENDED MARCH 31, 2004 ----------------------------------- ------------------------------------ (a) PRO FORMA (a) PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA ---------- ------------ --------- ---------- ------------ --------- (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) REVENUES Oil and gas sales $ 85,023 $ (418) $ 84,605 $ 23,244 $ (881) $ 22,363 Gas gathering, marketing, and oilfield service 23,741 (13,203) 10,538 5,774 (3,191) 2,583 Other 338 (72) 266 168 (39) 129 --------- --------- --------- --------- --------- --------- 109,102 (13,693) 95,409 29,186 (4,111) 25,075 EXPENSES Production expense 19,937 40 19,977 5,419 (25) 5,394 Production taxes 2,455 (6) 2,449 664 (12) 652 Gas gathering, marketing, and oilfield service 21,378 (11,791) 9,587 5,177 (2,939) 2,238 Exploration expense 16,882 (10,089) 6,793 2,077 (595) 1,482 General and administrative expense 4,559 -- 4,559 1,235 -- 1,235 Franchise, property and other taxes 282 (80) 202 86 (16) 70 Depreciation, depletion and amortization 19,343 (1,274) 18,069 4,947 (393) 4,554 Impairment of oil and gas properties 5,774 (4,878) 896 -- -- -- Accretion expense 365 (38) 327 112 (17) 95 Derivative fair value (gain) loss (319) -- (319) (332) -- (332) --------- --------- --------- --------- --------- --------- 90,656 (28,116) 62,540 19,385 (3,997) 15,388 --------- --------- --------- --------- --------- --------- OPERATING INCOME 18,446 14,423 32,869 9,801 (114) 9,687 OTHER EXPENSE Interest expense 25,537 (1,014) 24,523 6,543 (377) 6,166 --------- --------- --------- --------- --------- --------- (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (7,091) 15,437 8,346 3,258 263 3,521 (Benefit) provision for income taxes (2,481) 5,495 3,014 1,206 97 1,303 --------- --------- --------- --------- --------- --------- (LOSS) INCOME FROM CONTINUING OPERATIONS $ (4,610) $ 9,942 $ 5,332 $ 2,052 $ 166 $ 2,218 ========= ========= ========= ========= ========= =========
See notes to pro forma consolidated financial statements. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (a) Represents adjustments for the sale of the Arrow assets and the TBR operations. (c) EXHIBITS The following exhibit is filed herewith: 99.1 News release dated June 29, 2004 announcing the closing of the sale of the Company's TBR assets on June 25, 2004. 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: July 9, 2004 BELDEN & BLAKE CORPORATION ---------------- (Registrant) By: /s/ Robert W. Peshek ----------------------------- Robert W. Peshek, Senior Vice President and Chief Financial Officer