-----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, HHTmwHKCzrrxKtA3vRq9pMZ/jJOWKWVVZAdK6TbxufP3bh0w0+BjtDpuWeC30BAL mtqxR7AQJsx4woUuiFMnVQ== /in/edgar/work/0000821483-00-000038/0000821483-00-000038.txt : 20000927 0000821483-00-000038.hdr.sgml : 20000927 ACCESSION NUMBER: 0000821483-00-000038 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000710 ITEM INFORMATION: FILED AS OF DATE: 20000922 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELTA PETROLEUM CORP/CO CENTRAL INDEX KEY: 0000821483 STANDARD INDUSTRIAL CLASSIFICATION: [1311 ] IRS NUMBER: 841060803 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-16203 FILM NUMBER: 727231 BUSINESS ADDRESS: STREET 1: 555 17TH ST STE 3310 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3032939133 MAIL ADDRESS: STREET 1: 555 17TH STREET STREET 2: SUITE 3310 CITY: DENVER STATE: CO ZIP: 80202 8-K/A 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 July 10, 2000 DELTA PETROLEUM CORPORATION (Exact name of registrant as specified in its charter) Colorado 0-16203 84-1060803 (State of Commission (I.R.S. Employer Incorporation) File No. Identification No.) Suite 3310 555 17th Street Denver, Colorado 80202 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (303) 293-9133 This report on Form 8-K/A amends and supplements a report on Form 8-K filed by Delta Petroleum Corporation ("Delta" or "the Company") on July 10, 2000 in connection with the acquisition of certain producing wells and associated acreage in North Dakota from Whiting Petroleum Corporation ("Whiting Properties"). ITEM 7. FINANCIAL STATEMENTS AND EXHIBIT. (A) Audited Statement of Oil and Gas Revenue and Direct Lease Operating Expenses of the Whiting Properties for each of the years in the two-year period ended June 30, 2000. (B) Condensed pro forma financial statements of Delta Petroleum Corporation for the year ended June 30, 2000. (C) Exhibit (23.1) Consent of KPMG LLP 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 hereunto duly authorized. DELTA PETROLEUM CORPORATION (Registrant) Date: September 22, 2000 By: s/Aleron H. Larson, Jr. Aleron H. Larson, Jr. Chairman/C.E.O. INDEPENDENT AUDITORS' REPORT THE BOARD OF DIRECTORS WHITING PETROLEUM CORPORATION We have audited the accompanying statements of oil and gas revenue and direct lease operating expenses of oil and gas properties ("the Whiting Properties") of Whiting Petroleum Corporation ("Whiting") acquired by Delta Petroleum Corporation for each of the years in the two-year period ended June 30, 2000. These financial statement are the responsibility of Whiting's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of oil and gas revenue and direct lease operating expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of oil and gas revenue and direct lease operating expenses. 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 statements of oil and gas revenue and direct lease operating expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission. Full historical financial statements, including general and administrative expenses and other indirect expenses, have not been presented as management of the Whiting Properties cannot make a practicable determination of the portion of their general and administrative expenses or other indirect expenses which are attributable to the Whiting Properties. In our opinion, the statements of oil and gas revenue and direct lease operating expenses referred to above present fairly, in all material respects, the oil and gas revenue and direct lease operating expenses of the Whiting Properties as described in Note 1 for each of the years in the two-year period ended June 30, 2000, in conformity with generally accepted accounting principles. s/KPMG LLP KPMG LLP September 15, 2000 WHITING PROPERTIES STATEMENTS OF OIL AND GAS REVENUE AND DIRECT LEASE OPERATING EXPENSES Years Ended June 30, 2000 1999 Operating Revenue: Sales of condensate $1,953,385 1,023,713 Sales of natural gas 146,104 79,597 Total Operating Revenue 2,099,489 1,103,310 Direct Lease Operating Expenses 156,428 294,791 Excess Revenue Over Direct Operating Expenses $1,943,061 $ 808,519 See accompanying notes to financial statements. NOTES TO WHITING PROPERTIES STATEMENTS OF OIL AND GAS REVENUE AND DIRECT LEASE OPERATING EXPENSES FOR EACH OF THE YEARS IN THE TWO-YEAR PERIOD ENDED JUNE 30, 2000 1) PURCHASE OF OIL AND GAS PROPERTIES AND BASIS OF PRESENTATIONS The accompanying financial statements present the revenues and direct lease operating expenses of certain oil and gas properties of Whiting Petroleum Corporation (the "Whiting Properties") for each of the years in the two-year period ended June 30, 2000. The properties consist of working interests in oil and gas properties located in North Dakota that are subject to an agreement for acquisition by Delta Petroleum Corporation ("Delta") effective February 1, 2000. The July 10, 2000 payment of $3,745,000 and the June 1, 2000 issuance of 90,000 shares of Delta's common stock valued at approximately $280,000 resulted in the effective acquisition of 67% of the ownership interest in each property to be acquired. The remaining 33% of the ownership interest in each property can be acquired by Delta on September 29, 2000 for a payment of $1,845,000. The accompanying statements of oil and gas revenue and direct lease operating expenses of the Whiting Properties were prepared to comply with certain rules and regulations of the Securities and Exchange Commission. Full historical financial statements including general and administrative expenses and other indirect expenses, have not been presented as management of the Whiting Properties cannot make a practicable determination of the portion of their general and administrative expenses or other indirect expenses which are attributable to the Whiting Properties. Accordingly, their financial statements are not indicative of the operating results, subsequent to the acquisition. Revenue in the accompanying statements of oil and gas revenue and direct lease operating expenses is recognized on the sales method. Direct lease operating expenses are recognized on the accrual basis and consist of all costs incurred in producing, marketing and distributing products produced by the properties as well as production taxes and monthly administrative overhead costs charged by the operator. 2) SUPPLEMENTAL FINANCIAL DATA OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) The following unaudited information has been prepared in accordance with Statement of Financial Accounting Standards No. 69, DISCLOSURE ABOUT OIL AND GAS PRODUCING ACTIVITIES (SFAS 69). A) ESTIMATED PROVED OIL AND GAS RESERVES Proved oil and gas reserves are the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions; i.e., prices and costs as of the date the estimate is made. Proved developed oil and gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. Proved undeveloped oil and gas reserves are reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. Prices include consideration of changes in existing prices provided only by contractual arrangements, but not on escalations based on future conditions. An estimate of proved developed future net recoverable oil and gas reserves of the Whiting Properties and changes therein follows. Such estimates are inherently imprecise and may be subject to substantial revisions. Proved undeveloped reserves attributable to the Whiting Properties are not significant. Oil and Condensate Natural Gas (Bbls) (Mcf) Balance at July 1, 1998 357,444 168,021 Production (81,663) (40,617) Balance at June 30, 1999 275,781 127,404 Production (80,444) (39,739) Balance at June 30, 2000 195,337 87,665 B) STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS The standard measure of discounted future net cash flows has been calculated in accordance with the provisions of SFAS No. 69. Future oil and gas sales and production and development costs have been estimated using prices and costs in effect at the end of the years indicated. Future income tax expenses have not been considered, as the properties are not a tax paying entity. Future general and administrative and interest expenses have also not been considered. Changes in the demand for oil and natural gas, inflation, and other factors make such estimates inherently imprecise and subject to substantial revision. This table should not be construed to be an estimate of the current market value of the proved reserves. The standardized measure of discounted future net cash flows as of June 30, 2000 and 1999 is as follows: 2000 1999 Future oil and gas sales $6,275,631 $5,281,345 Future production and development costs (553,654) (710,040) Future net revenue 5,721,977 4,571,305 10% annual discount for estimated timing of cash flows (1,017,626) (839,830) Standardized measure of discounted Future net cash flows $4,704,351 $3,731,475 No income taxes have been reflected due to available net operating loss carry forwards of Delta Petroleum Corporation. C) CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS RELATING TO PROVED OIL AND GAS RESERVES An analysis of the changes in the total standardized measure of discounted future net cash flows during each of the last two years is as follows: 2000 1999 Beginning of year $3,731,475 3,026,596 Changes resulting from: Sales of oil and gas, net of production costs (1,943,061) (1,043,736) Changes in prices and other 2,542,789 1,445,955 Accretion of discount 373,148 302,660 End of year $4,704,351 $3,731,475 DELTA PETROLEUM CORPORATION CONDENSED PRO FORMA FINANCIAL STATEMENTS On July 10, 2000, Delta Petroleum Corporation ("Delta" or "the Company") effectively acquired 67% of the interests in 21 producing wells and associated acreage in North Dakota from Whiting Petroleum Corporation ("the Whiting Properties") for a purchase price of approximately $4,025,000 which consists of cash of $3,745,000 which was financed through borrowings from an unrelated entity at an interest rate of 15% per annum and 90,000 shares of the Company's common stock valued at approximately $280,000. For accounting purposes, a purchase price adjustment of approximately $871,000 for the excess of revenue over direct expenses between the contract effective date of February 1, 2000 and June 30, 2000 (the acquisition date) has been recorded. The remaining 33% ownership interests in each property can be acquired by Delta on September 29, 2000 for a payment of $1,845,000 which will be reduced by a purchase price adjustment reflecting the excess of revenue over direct operating expenses and capital costs from February 1, 2000, the contract effective date, through the closing date of September 29, 2000. The following unaudited condensed pro forma balance sheet assumes that the acquisition of the Whiting Properties occurred on June 30, 2000 and reflects the historical consolidated balance sheet of Delta giving pro forma effect to this transaction using the purchase method of accounting. The unaudited condensed pro forma combined balance sheet should be read in conjunction with the historical statements and related notes of the Company. The following unaudited condensed pro forma statement of operations for the for the year ended June 30, 2000 assumes the acquisition of the Whiting Properties occurred on July 1, 1999. No general and administrative or other indirect costs related to the Whiting Properties have been reflected in the historical results of the Whiting Properties nor have they been reflected in proforma adjustments as it is not practical to allocate such costs for the historical statements or estimate such costs for proforma purposes. The pro forma results of operations are not necessarily indicative of the results of operations that would actually have been attained if the transaction had occurred as of this date. These statements should be read in conjunction with the historical financial statements and related notes of the Company and the Statements of Oil and Gas Revenue and Direct Operating Expenses of the Whiting Properties included herein. DELTA PETROLEUM CORPORATION Unaudited Condensed Pro Forma Balance Sheet As of June 30, 2000 Pro Forma Delta Adjustments Pro Forma Historical (Note B) Delta Current Assets: Cash $ 302,414 $ 302,414 Accounts receivable 756,109 870,802(2) 1,626,911 Other current assets 571,761 571,761 Total current assets 1,630,284 870,802 2,501,086 Property and Equipment: Oil and gas properties, at cost, using the successful efforts method of accounting 20,414,206 4,025,002(1) 23,568,406 (870,802)(2) Less accumulated depreciation and depletion (2,538,030) (2,538,030) Net property and equipment 17,876,176 3,154,200 21,030,376 Long term assets: Other long term assets 1,270,810 1,270,810 Deposit on purchase of oil and gas properties 280,002 (280,002)(1) - Total long term assets 1,550,812 (280,002) 1,270,810 $ 21,057,272 3,745,000 $ 24,802,272 Current Liabilities: Accounts payable $ 1,636,651 $ 1,636,651 Other accrued liabilities 213,121 213,121 Current portion of long-term debt 1,765,653 3,745,000(1) 5,510,653 Total current liabilities 3,615,425 3,745,000 7,360,425 Long-term debt 6,479,115 6,479,115 Stockholders' Equity: Preferred stock, $.10 par value - - Common stock, $.01 par value 84,221 84,221 Additional paid-in capital 33,746,861 33,746,861 Accumulated other comprehensive loss 77,059 77,059 Accumulated deficit (22,945,409) (22,945,409) 0 Total stockholders' equity 10,962,732 - 10,962,732 Commitments $ 21,057,272 3,745,000 $ 24,802,272
See accompanying notes to condensed pro forma financial statements. DELTA PETROLEUM CORPORATION Unaudited Condensed Pro Forma Statement of Operations Year Ended June 30, 2000 Pro Forma Delta Whiting Adjustments Pro Forma Historical Properties (Note C) Delta Revenue: Oil and gas sales $ 3,355,783 2,099,489 $ 5,455,272 Gain on sale of oil and gas properties 75,000 - 75,000 Other revenue 235,198 - 235,198 Total revenue 3,665,981 2,099,489 - 5,765,470 Operating expenses: Lease operating expenses 2,405,469 156,429 2,561,897 Depreciation and depletion 887,802 - 1,179,728(1) 2,067,530 Exploration expenses 46,730 - 46,730 General and administrative 1,777,579 - 1,777,579 Stock option expense 537,708 - 537,708 Total operating expenses 5,655,288 156,428 1,179,728 6,991,444 Loss from operations (1,989,307) 1,943,061 (1,179,728) (1,225,974) Other income and expenses: Interest expense (1,264,954) - (561,750)(2) (1,826,704) Loss on sale of securities available for sale (112,789) - (112,789) Total other income and expenses (1,377,743) - (561,750) (1,939,493) Loss $ (3,367,050) 1,943,061 (1,741,478) $ (3,165,467) Basic and diluted loss per common share $ (0.46) $ (0.44) Weighted average number of common shares outstanding 7,271,336 7,271,336 See accompanying notes to condensed pro forma financial statements.
NOTES TO CONDENSED PRO FORMA FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED) A) BASIS OF PRESENTATION The accompanying unaudited condensed pro forma balance sheet assumes that the acquisition of oil and gas properties from Whiting Petroleum Corporation referred to as ("the Whiting Properties") occurred on June 30, 2000 and reflects the historical consolidated balance sheet of Delta Petroleum Corporation ("Delta") at that date giving pro forma effect to the transaction using the purchase method of accounting. The unaudited condensed pro forma balance sheet should be read in conjunction with the historical financial statements and related notes of Delta. The accompanying unaudited condensed pro forma statement of operations for the year ended June 30, 2000 assumes that the acquisition of the Whiting Properties occurred as of July 1, 1999. No general and administrative or other indirect costs related to the Whiting Properties have been reflected in the historical results of the Whiting Properties nor have they been reflected in proforma adjustments as it is not practical to allocate such costs for the historical statements or estimate such costs for proforma purposes. The pro forma results of operations are not necessarily indicative of the results of operations that would actually have been attained if the transactions had occurred as of this date. These statements should be read in conjunction with the historical financial statements and related notes of Delta and the Statements of Revenue and Direct Operating Expenses of the Whiting Properties included herein. B) ACQUISITION OF WHITING PROPERTIES - BALANCE SHEET On July 10, 2000, Delta Petroleum Corporation ("Delta" or "the Company") effectively acquired 67% of the interests in 21 producing wells and associated acreage in North Dakota from Whiting Petroleum Corporation ("Whiting Properties") for a purchase price of approximately $4,025,000 which consists of cash of $3,745,000 which was financed through borrowings from an unrelated entity at an interest rate of 15% per annum and 90,000 shares of the Company's common stock valued at approximately $280,000. For accounting purposes, a purchase price adjustment of approximately $871,000 for the excess of revenue over direct expenses between the contract effective date of February 1, 2000 and June 30, 2000 (the acquisition date) has been recorded. The accompanying historical balance sheet of Delta at June 30, 2000 has been adjusted to record the purchase price of the Whiting Properties as follows: (1) To record the assets acquired relating to the Whiting Properties and the related short term financing. The debt, due October 9, 2000, is guaranteed by two officers of the Company. (2) To record a purchase price adjustment for the excess revenues over direct expenses between the contract effective date of February 1, 2000 and the acquisition date of June 30, 2000. C) ACQUISITION OF WHITING PROPERTIES - STATEMENT OF OPERATIONS The accompanying condensed pro forma statement of operations for the year ended June 30, 2000 has been adjusted to include the historical revenue and direct lease operating expenses of the Whiting Properties for the year ended June 30, 2000. In addition, the following adjustments have been made to the accompanying condensed pro forma statement of operations for the year ended June 30, 2000: (1) To adjust depletion expense to reflect the pro forma depletion rate giving effect to the acquisition of the Whiting properties. (2) To record interest expense for interest associated with the debt incurred in connection with the Whiting Properties at a rate of 15% per annum. A one-eighth change in interest rate would have a $4,681 annual impact on interest expense. (3) No income tax effects of the proforma adjustment have been reflected due to Delta's net operating loss carry forward position and income tax valuation allowance. INDEX TO EXHIBITS (1) Underwriting Agreement. Not applicable. (2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession. Not applicable. (3) (i) Articles of Incorporation. Not applicable. (ii) Bylaws. Not applicable. (4) Instruments Defining the Rights of Security Holders, including Indentures. Not applicable. (5) Opinion: re: Legality. Not applicable. (6) Opinion: Discount on Capital Shares. Not applicable. (7) Opinion: re: Liquidation Preference. Not applicable. (8) Opinion: re: Tax Matters. Not applicable. (9) Voting Trust Agreement. Not applicable. (10) Material Contracts. Not applicable. (11) Statement re: Computation of Per Share Earnings. Not applicable. (12) Statement re: Computation of Ratios. Not applicable. (13) Annual Report to Security Holders, etc. Not applicable. (14) Material Foreign Patents. Not applicable. (15) Letter re: Unaudited Interim Financial Information. Not applicable. (16) Letter re: Change in Certifying Accountant. Not applicable. (17) Letter re: Director Resignation. Not applicable. (18) Letter re: Change in Accounting Principles. Not applicable. (19) Report Furnished to Security Holders. Not applicable. (20) Other Documents or Statements to Security Holders. Not applicable. (21) Subsidiaries of the Registrant. Not applicable. (22) Published Report Regarding Matters Submitted to Vote of Security Holders. Not applicable. (23) Consents of Experts and Counsel. 23.1 Consent of KPMG LLP (24) Power of Attorney. Not applicable. (25) Statement of Eligibility of Trustee. Not applicable. (26) Invitations for Competitive Bids. Not applicable. (27) Financial Data Schedule. Not applicable. (99) Additional Exhibits. Not applicable. EX-23.1 2 0002.txt Consent of Independent Auditors We consent to the inclusion of our report dated September 15, 2000 in Form 8-K/A of Delta Petroleum Corporation and incorporation by reference in the registration statements No. 33- 87106 and 33-91452 on Form S-8 of Delta Petroleum Corporation relating to the Statements of Oil and Gas Revenue and Direct Lease Operating Expenses of certain oil and gas properties of Whiting Petroleum Corporation acquired by Delta Petroleum Corporation for the years ended June 30, 2000 and 1999, which report appears in the Form 8-K/A of Delta Petroleum Corporation dated September 22, 2000. s/KPMG LLP KPMG LLP Denver, Colorado September 15, 2000 -----END PRIVACY-ENHANCED MESSAGE-----