-----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, Rwi9P9jLuL2Pxt1K1KX/qAW5XfcotUNjC6V8uFEDnmr8Kz89JQUSRUsK24E05f3L 02FIJ+QGsNjFiOnwFXw/gA== 0001021088-98-000012.txt : 19980611 0001021088-98-000012.hdr.sgml : 19980611 ACCESSION NUMBER: 0001021088-98-000012 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980327 ITEM INFORMATION: FILED AS OF DATE: 19980610 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MIDDLE BAY OIL CO INC CENTRAL INDEX KEY: 0000903267 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 631081013 STATE OF INCORPORATION: AL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-21702 FILM NUMBER: 98646064 BUSINESS ADDRESS: STREET 1: 1221 LAMAR ST STREET 2: SUITE 1020 CITY: HOUSTON STATE: TX ZIP: 77010 BUSINESS PHONE: 7137596808 MAIL ADDRESS: STREET 1: PO BOX 390 CITY: MOBILE STATE: AL ZIP: 36602 8-K/A 1 MIDDLE BAY OIL COMPANY, INC., FORM 8-K United States Securities and Exchange Commission Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 27, 1998 MIDDLE BAY OIL COMPANY, INC. (Exact name of registrant as specified in charter) Alabama 0-21702 63-1081013 (State or other (Commission (IRS Employer jurisdiction File Number) Identification No.) of incorporation) 1221 Lamar Street, Suite 1020, Houston, TX 77010 (Address of principal executive offices) Registrant's telephone number, including area code: (713) 759-6808 Former name or former address, if changed since last report: N/A ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION, AND EXHIBITS (B) PRO FORMA FINANCIAL INFORMATION MIDDLE BAY OIL COMPANY, INC. Unaudited Condensed Pro Forma Financial Statements As discussed in Item 2 of Form 8-K filed with the commission on May 6, 1998, Middle Bay Oil Company, Inc, ("Middle Bay") acquired on March 27, 1998, 1,064,432 shares of the common stock of Enex Resources Corporation, a Delaware corporation, ("Enex"), for $15,966,480 or $15 per share pursuant to Middle Bay's tender offer (the "tender offer") which began on February 19, 1998. The Enex shares acquired by Middle Bay represent 79.2% of the total outstanding Enex common shares. Enex is the general partner of Enex Consolidated Partners, L.P., (the "Enex Partnership"), a New Jersey Limited Partnership whose principal business is oil and gas production. Enex's general partner interest is 4.1%. Enex also owns an approximate 55% interest in the partnership as a limited partner. The following pro forma data presents the results of the Company for the year ended December 31, 1997 and for the three months ended March 31, 1998, as if the Enex acquisition had occurred on January 1, 1997. The pro forma financial statements are also based, in part, on the historical financial statements of Shore Oil Company ("Shore") and Bison Energy Corp. ("Bison"). Middle Bay acquired 100% of Shore effective June 30, 1997 and 100% of Bison effective February 28, 1997. Such historical financial statements for the Shore merger are included in the Form 8-K/A filed by Middle Bay on September 3. 1997 and such historical financial statements for the Bison merger are included in the Form 8-K/A filed by Middle Bay on April 25, 1997. The proforma results are presented for comparative purposes only and are not necessarily indicative of the results which would have been obtained had the acquisition been consummated as presented. The following data reflects pro forma adjustments for oil and gas revenues, production costs, depreciation and depletion related to the properties and business acquired, and the related income tax effects. The unaudited condensed pro forma financial statements should be read in conjunction with the notes thereto. Middle Bay Oil Company, Inc. Unaudited Pro Forma Statement of Operations For The Three Months Ended March 31, 1998 (In Thousands, Except Per Share Data) Enex Acquisition Pro Forma REVENUES Historical of Enex Adjustments Notes Pro Forma Oil and gas production and plant income $ 2,632 2,122 - $ 4,754 Other revenue 125 682 - 807 ---------- --------- --------- ----------- Total Revenue 2,757 2,804 - 5,561 ---------- --------- --------- ----------- COSTS AND EXPENSES Well operating 1,184 1,003 - 2,187 Geological and geophysical 746 - - 746 Dryhole costs 469 - - 469 Depreciation, depletion and amortization 1,118 548 269 (9) 1,968 Interest 255 - 210 (10) 465 General and administrative 1,127 1,416 - 2,543 ---------- --------- ---------- ----------- Total Expenses 4,899 2,967 479 8,345 ---------- --------- ---------- ----------- INCOME (LOSS) FROM OPERATIONS (2,142) (163) (479) (2,784) MINORITY INTEREST - (348) 18 (12) (330) ----------- ---------- ---------- ----------- Income (loss) before income taxes and investee earnings (2,142) (511) (461) (3,114) Income Tax (Benefit) (728) (87) - (11) (815) ----------- ---------- ---------- ----------- NET INCOME (LOSS) (1,414) (424) (461) (2,299) DIVIDENDS TO PREFERRED STOCKHOLDERS 68 - - 68 ----------- ---------- ---------- ----------- NET LOSS AVAILABLE TO STOCKHOLDERS $ (1,482) (424) (461) $ (2,367) =========== ========== ========== =========== Weighted Average Common Shares Outstanding Basic 6,720 6,720 =========== ============ Diluted 6,720 6,720 =========== ============ NET LOSS PER COMMON SHARE Basic $ (0.22) (0.35) =========== ============ Diluted $ (0.22) (0.35) =========== ============ See Accompanying Notes.
Middle Bay Oil Company, Inc. Unaudited Pro Forma Statement of Operations For The Year Ended December 31, 1997 (In Thousands, Except Per Share Data) Acquisition of Bison Pro Forma Acquisition Pro Forma REVENUES Historical & Shore Adjustments Notes of Enex Adjustments Notes Pro Forma Oil and gas production and plant income $ 10,213 2,519 - 10,096 $ 22,828 Other revenue 1,220 826 (26) (6) 1,367 3,387 ----------- ------- ---------- --------- ----------- Total Revenue 11,433 3,345 (26) 11,463 26,215 ----------- ------- ---------- --------- ----------- COSTS AND EXPENSES Well operating 3,849 933 - 4,774 9,556 Geological and geophysical 223 - - - 223 Abandonment costs 1,119 2 - - 1,121 Impairments 21,148 - - - 21,148 Depreciation, depletion and amortization 4,567 582 1,163 (1) 1,634 750 (9) 8,696 Interest 671 160 (70) (3) - 997 (10) 1,758 General and administrative 2,880 603 (21) (6) 2,061 5,523 ----------- ------- ---------- -------- --------- ---------- Total Expenses 34,457 2,280 1,072 8,469 1,747 48,025 ----------- ------- ---------- -------- --------- ---------- INCOME (LOSS) FROM OPERATIONS (23,024) 1,065 (1,098) 2,994 (1,747) (21,810) MINORITY INTEREST - - - (1,013) (409) (12) (1,422) -------- ------- ---------- -------- --------- ---------- Income (loss) before income taxes and investee earnings (23,024) 1,065 (1,098) 1,981 (2,156) (23,232) Equity in net earnings of equity investees - 37 (37) (7) - - 0 INCOME TAX EXPENSE (BENEFIT) (7,445) 302 (302) (4) 16 - (7,429) -------- ------- ---------- ------- --------- -------- NET INCOME (LOSS) (15,579) 800 (833) 1,965 (2,000) (15,803) DIVIDENDS TO PREFERRED STOCKHOLDERS 605 - 173 (2) - 778 --------- -------- ---------- -------- -------- -------- NET LOSS AVAILABLE TO STOCKHOLDERS $(16,184) 800 (1,006) 1,965 (2,000) $(16,581) ========= ======== ========== ======== ======== ========= Weighted Average Common Shares Outstanding Basic 3,397 4,439 ========= ========= Diluted 3,397 4,439 ========= ========= NET LOSS PER COMMON SHARE Basic $ (4.76) (3.74) ========= ========= Diluted $ (4.76) (3.74) ========= ========= See Accompanying Notes.
MIDDLE BAY OIL COMPANY, INC. Notes to Unaudited Condensed Pro Forma Financial Statements Note A - Pro Forma Adjustments for Bison and Shore Mergers On February 10, 1997, Middle Bay and Bison entered into a Merger Agreement whereby Bison was merged into Middle Bay, effective February 28, 1997. The merger was accounted for using the purchase method of accounting. In completing the merger, Middle Bay issued 605,556 shares of Middle Bay common stock and paid $6,654,114 in cash in exchange for all of the issued and outstanding Bison common stock. On June 20, 1997, Middle Bay and Shore entered into a Merger Agreement whereby Shore was merged into Middle Bay effective June 30, 1997. The merger was accounted for using the purchase method of accounting. In completing the merger Middle Bay issued 1,883,333 shares of Middle Bay common stock, 266,667 shares of Middle Bay Series B convertible preferred stock and paid $200,000 in cash in exchange for all of the issued and outstanding Shore common stock. Middle Bay also paid Shore's indebtedness to its shareholders of $2,333,303 and assumed bank debt of Shore amounting to $2,105,000. The mergers were accounted for as purchases of Bison and Shore by Middle Bay and as a result of the purchase method of accounting, Middle Bay's cost of acquiring Bison and Shore were allocated to assets and liabilities acquired based on estimated fair values. Middle Bay incurred approximately $35,000 and $38,000 in legal and accounting expenses related to the Bison and Shore mergers, respectively, which were included as a cost of the merger. The accompanying Pro Forma Combined Condensed Statements of Operations for the year ended December 31, 1997 and for the three months ended March 31, 1998 have been prepared as if the Bison and Shore mergers had occurred on January 1, 1997 and reflect the following adjustments: (1) To adjust depletion, depreciation and amortization expense to reflect Middle Bay's purchase price allocated to property and equipment using the unit of production method utilized by Middle Bay. (2) To record the preferred stock dividends paid on the preferred stock issued for the cash portion of the Bison purchase price and issuded in the Shore purchase price. (3) To record the reduction in interest expense on the debt retired. (4) To adjust the provision for income taxes for the change in financial taxable income as a result of the mergers. (5) To reflect the impact on the weighted average common shares outstanding for the issuance of 2,488,889 shares of Middle Bay common stock in conjunction with the Bison and Shore mergers. (6) To remove management income for accounting and administrative functions performed by Bison for other entities. Subsequent to the merger, Bison no longer performed such functions. (7) To remove equity in net earnings of equity investees that were not purchased. (8) To reflect the issuance of 388,884 shares of Series A Preferred Stock, 266,667 Shares of Series B Preferred Stock and, 2,488,889 shares of Middle Bay common stock in conjunction with the Bison and Shore mergers. Pro Forma basic net income (loss) per common share information is computed by dividing net income (loss), adjusted for the preferred stock dividend requirement of $93,332 for the six months ended June 30, 1997 by the Pro Forma weighted average common shares outstanding. Shares issuable upon exercise of options and upon conversion of preferred stock are included in the computations of the pro forma dilutive income per common and common equivalent shares if the effect is dilutive. Note B - Pro Forma Adjustments for Purchase of Enex Middle Bay Oil Company, Inc, acquired on March 27, 1998, 1,064,432 shares of the common stock of Enex Resources Corporation, a Delaware corporation, for $15,966,480 or $15 per share pursuant to Middle Bay's tender offer (the "tender offer") which began on February 19, 1998. The Enex shares acquired by Middle Bay represent 79.2% of the total outstanding Enex common shares. Enex is the general partner of Enex Consolidated Partners, L.P., a New Jersey Limited Partnership whose principal business is oil and gas production. Enex's general partner interest is 4.1%. Enex also owns an approximate 55% interest in the partnership as a limited partner. The cost of allocating the purchase of Enex was allocated using the purchase method of accounting based upon the fair value of the consolidating assets and liabilities of Enex with the remaining purchase price allocated to oil and gas properties. The allocation of the purchase price is summarized as follows: (in thousands) Working capital........................... $ 4,812 Oil and gas properties.................. 18,821 Minority Interest.......................... (7,667) -------- $ 15,966 The total cost of the purchase was $15.966 million. The cash portion of the cost was $1.5 million with the remaining $14.466 million derived from Middle Bay's line of credit, which has a stated interest rate of LIBOR plus 2%. The accompanying Pro Forma Combined Condensed Statements of Operations for the year ended December 31, 1997 and for the three months ended March 31, 1998 have been prepared as if the Enex purchase had occurred on January 1, 1997 and reflect the following adjustments: (9) To adjust depletion, depreciation, and amortization to reflect Middle Bay's purchase price allocated to property and equipment using the production method utilized by Middle Bay. (10) To recognize the additional interest expense resulting from a $15.012 million loan against Middle Bay's line of credit at LIBOR plus 2%. (11) Middle Bay's 79.2% ownership of Enex will not permit consolidation of Enex with MIddle Bay for tax reporting purposes. (12) To recognize the portion of Enex's income/loss attributable to the minority interest shareholders in Enex. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MIDDLE BAY OIL COMPANY, INC. (Registrant) June 10, 1998 By: /s/ Frank C. Turner II Frank C. Turner II Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----