-----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, G0LsovgPYkYk6cgKP1m5SFJuQS9yVQ5kRrPCgDsCvFlGvCh/Y0CAB6Xykc1hD5Yx txfYQrWRUKYuQh+wddN0FA== 0000821483-00-000048.txt : 20001211 0000821483-00-000048.hdr.sgml : 20001211 ACCESSION NUMBER: 0000821483-00-000048 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000929 ITEM INFORMATION: FILED AS OF DATE: 20001208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELTA PETROLEUM CORP/CO CENTRAL INDEX KEY: 0000821483 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [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: 785909 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 September 29, 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 September 29, 2000 in connection with the acquisition of certain producing wells and associated acreage in North Dakota from Whiting Petroleum Corporation ("North Dakota Properties"). ITEM 7. FINANCIAL STATEMENTS AND EXHIBIT. (A) Audited Statement of Oil and Gas Revenue and Direct Lease Operating Expenses of the North Dakota 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: December 8, 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 North Dakota 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 North Dakota Properties cannot make a practicable determination of the portion of their general and administrative expenses or other indirect expenses which are attributable to the North Dakota 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 North Dakota 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 November 28, 2000 NORTH DAKOTA PROPERTIES STATEMENTS OF OIL AND GAS REVENUE AND DIRECT LEASE OPERATING EXPENSES Years Ended June 30, 2000 1999 Operating Revenue: Sales of condensate $2,915,500 1,527,930 Sales of natural gas 218,065 118,801 Total Operating Revenue 3,133,565 1,646,731 Direct Lease Operating Expenses 233,475 136,996 Excess Revenue Over Direct Operating Expenses $2,900,090 $1,509,735 See accompanying notes to financial statements. NOTES TO NORTH DAKOTA 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 "North Dakota Properties") for each of the years in the two-year period ended June 30, 2000. The properties consist of 100% of the 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, which were acquired on July 10, 2000 (67%) and September 28, 200 (33%), respectively. On July 10, 2000 the Company paid $3,745,000 and issued 90,000 shares of the Company's common stock valued at approximately $280,000 and on September 28, 2000, the Company paid $1,845,000, to acquire interests in producing wells and acreage located in the Eland and Stadium fields in Stark County, North Dakota. The July 10, 2000 and September 28, 2000 transactions resulted in the acquisition by the Company of 67% and 33%, respectively, of the ownership interest in each property acquired. The $3,745,000 payment on July 10, 2000 was financed through borrowings from an unrelated entity and personally guaranteed by two of the Company's officers. The payment on September 28, 2000 was primarily paid out of the Company's share of excess revenues over direct lease operating expenses from the effective date of the acquisitions of February 1, 2000 through closing. Delta also issued 100,000 shares of its restricted common stock to an unaffiliated party for its consultation and assistance related to the transaction. The fair value of the shares at the date of issuance is $450,000 and is included as a component of the cost of the properties. The accompanying statements of oil and gas revenue and direct lease operating expenses of the North Dakota Properties were prepared to comply with certain rules and regulations of the Securities and Exchange Commission and include 100% of the property interests acquired in the two transactions. Full historical financial statements including general and administrative expenses and other indirect expenses, have not been presented as management of the North Dakota Properties cannot make a practicable determination of the portion of their general and administrative expenses or other indirect expenses which are attributable to the North Dakota 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 North Dakota Properties and changes therein follows. Such estimates are inherently imprecise and may be subject to substantial revisions. Proved undeveloped reserves attributable to the North Dakota Properties are not significant. Oil and Condensate Natural Gas (Bbls) (Mcf) Balance at July 1, 1998 533,497 250,778 Production (121,885) (60,622) Balance at June 30, 1999 411,612 190,156 Production (120,066) (59,312) Balance at June 30, 2000 291,546 130,844 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, due to available net operating loss carry forwards of the Company. 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 $9,366,613 $6,042,856 Future production and development costs (826,349) (1,057,438) Future net revenue 8,540,264 4,985,418 10% annual discount for estimated timing of cash flows (1,518,845) (597,353) Standardized measure of discounted Future net cash flows $7,021,419 $4,388,065 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 $4,388,065 3,485,232 Changes resulting from: Sales of oil and gas, net of production costs (2,900,090) (1,509,735) Changes in prices and other 5,094,637 2,064,045 Accretion of discount 438,807 348,523 End of year $7,021,419 $4,388,065 DELTA PETROLEUM CORPORATION CONDENSED PRO FORMA FINANCIAL STATEMENTS On July 10, 2000 the Company paid $3,745,000 and issued 90,000 shares of the Company's common stock valued at approximately $280,000 and on September 28, 2000, the Company paid $1,845,000 to acquire interests in producing wells and acreage located in the Eland and Stadium fields in Stark County, North Dakota. The July 10, 2000 and September 28, 2000 payments resulted in the acquisition by the Company of 67% and 33%, respectively, of the ownership interest in each property acquired. The $3,745,000 payment on July 10, 2000 was financed through borrowings from an unrelated entity and personally guaranteed by two of the Company's officers. The payment on September 28, 2000 was primarily paid out of the Company's share of excess revenues over direct lease operating expenses from the effective date of the acquisitions through closing. Delta also issued 100,000 shares of its restricted common stock to an unaffiliated party for its consultation and assistance related to the transaction. The following unaudited condensed pro forma balance sheet assumes that the acquisition of 100% of the property interests of North Dakota 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 balannce 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 year ended June 30, 2000 assumes the acquisition of 100% of the property interests of the North Dakota Properties occurred on July 1, 1999, respectively. No general and administrative or other indirect costs related to the North Dakota Properties have been reflected in the historical results of the North Dakota 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 North Dakota 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 756,109 756,109 Other current assets 571,761 571,761 Total current assets 1,630,284 - 1,630,284 Property and Equipment: Oil and gas properties, at cost, using the successful efforts method of accounting 20,414,206 5,001,394(1) 25,415,600 Less accumulated depreciation and depletion (2,538,030) (2,538,030) Net property and equipment 17,876,176 5,001,394 22,877,570 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 4,721,392 $ 25,778,664 Current Liabilities: Accounts payable $ 1,636,651 $ 1,636,651 Purchase price payable - 526,392(1) 526,392 Other accrued liabilities 213,121 213,121 Current portion of long-term debt 1,765,653 1,765,653 Total current liabilities 3,615,425 526,392 4,141,817 Long-term debt 6,479,115 3,745,000(1) 10,224,115 Stockholders' Equity: Preferred stock, $.10 par value - - Common stock, $.01 par value 84,221 1,000(1) 85,221 Additional paid-in capital 33,746,861 449,000(1) 34,195,861 Accumulated other comprehensive loss 77,059 77,059 Accumulated deficit (22,945,409) (22,945,409) Total stockholders' equity 10,962,732 450,000 11,412,732 Commitments $ 21,057,272 4,721,392 $ 25,778,664
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 North Dakota Adjustments Pro Forma Historical Properties (Note C) Delta Revenue: Oil and gas sales $ 3,355,783 3,133,565 $ 6,489,348 Gain on sale of oil and gas properties 75,000 - 75,000 235,198 - 235,198 Total revenue 3,665,981 3,133,565 - 6,799,546 Operating expenses: Lease operating expenses 2,405,469 233,475 2,638,944 Depreciation and depletion 887,802 - 1,464,908(1) 2,352,710 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 5,655,288 233,475 1,464,908 7,353,671 Income (loss) from operations (1,989,307) 2,900,090 (1,464,908) (554,125) 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) Net income (loss) $ (3,367,050) 2,900,090 (2,026,658) $(2,493,618) Basic and diluted loss per common share $ (0.46) $(0.34) Weighted average number of common shares outstanding 7,271,336 100,000 7,371,336 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 both acquisitions of oil and gas properties from Whiting Petroleum Corporation referred to as ("the North Dakota 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 transactions 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 100% of the property interests of the North Dakota Properties occurred as of July 1, 1999, respectively. No general and administrative or other indirect costs related to the North Dakota Properties have been reflected in the historical results of the North Dakota 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 North Dakota Properties included herein. B) ACQUISITION OF NORTH DAKOTA PROPERTIES - BALANCE SHEET On July 10, 2000 the Company paid $3,745,000 and issued 90,000 shares of the Company's common stock valued at approximately $280,000 and on September 28, 2000, the Company paid $1,845,000 to acquire interests in producing wells and acreage located in the Eland and Stadium fields in Stark County, North Dakota. The July 10, 2000 and September 28, 2000 payments resulted in the acquisition by the Company of 67% and 33%, respectively, of the ownership interest in each property acquired. The $3,745,000 payment on July 10, 2000 was financed through borrowings from an unrelated entity and personally guaranteed by two of the Company's officers. The payment on September 28, 2000 was primarily paid out of the Company's share of excess revenues over direct lease operating expenses from the effective date of the acquisitions of February 1, 2000 through closing. Delta also issued 100,000 shares of its restricted common stock to an unaffiliated party for its consultation and assistance related to the transaction. The accompanying historical balance sheet of Delta at June 30, 2000 has been adjusted to record the purchase price of 100% of the property interests of the North Dakota Properties as follows: (1) To record the assets acquired relating to the North Dakota Properties and the related financing: Oil and gas properties, net of excess revenues over direct expenses between the contract effective date of February 1, 2000 and the assumed acquisition date of June 30, 2000 ($5,001,394), deposit previously paid in common stock ($280,002), common stock issued ($450,000), new borrowings ($3,745,000), and purchase price payable ($526,392). C) ACQUISITION OF NORTH DAKOTA 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 100% of the property interests of the North Dakota Properties. 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 acquisitions of the North Dakota Properties. (2) To record interest expense for interest associated with the debt incurred in connection with the North Dakota 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. 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 November 28, 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 December 6, 2000. s/KPMG LLP KPMG LLP Denver, Colorado December 7, 2000 -----END PRIVACY-ENHANCED MESSAGE-----