-----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, UhHq9IntefdQ8UefzxvAf1C6kxDP4gQBMlANRSrrlZCHGV9CVAtAqHLdlh4QMB4G VrolvXq/x+uzEfq/YMmZ0Q== 0000860713-96-000005.txt : 19960520 0000860713-96-000005.hdr.sgml : 19960520 ACCESSION NUMBER: 0000860713-96-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960502 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960517 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SNYDER OIL CORP CENTRAL INDEX KEY: 0000860713 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 752306158 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10509 FILM NUMBER: 96569189 BUSINESS ADDRESS: STREET 1: 777 MAIN ST STE 2500 CITY: FORT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8173384043 MAIL ADDRESS: STREET 1: 777 MAIN STREET SUITE 2500 CITY: FORT WORTH STATE: TX ZIP: 76102 8-K 1 FORM 8K - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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 reported): May 2, 1996 SNYDER OIL CORPORATION (Exact name of registrant as specified in its charter) Delaware 1-10509 75-2306158 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 777 Main Street Fort Worth, Texas 76102 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (817) 338-4043 - -------------------------------------------------------------------------------- Item 2. Acquisition or Disposition of Assets. As announced on May 2, 1996, the merger (the "Merger") of Gerrity Oil & Gas Corporation ("Gerrity") into a wholly-owned subsidiary of Patina Oil & Gas Corporation ("Patina") occurred on May 2, 1996 following approval of the Merger by Gerrity's common shareholders. As a result of the Merger, Gerrity became a wholly-owned subsidiary of Patina. Simultaneously with the Merger, Snyder Oil Corporation ("SOCO") contributed all its assets and operations, subject to certain limitations, in the Wattenberg Field of Colorado ("Wattenberg") to Patina (the "Contribution"). In connection with the Contribution, Patina assumed $75 million of bank debt from SOCO. With the closing of the transaction, Patina holds interests in over 3,600 Wattenberg wells. As of December 31, 1995, Patina has net proved reserves of 82 million barrels of oil equivalent ("BOE"), over two-thirds of which were natural gas. Patina's production currently exceeds 20,000 BOE per day. SOCO owns an aggregate of 14,000,000 shares of common stock of Patina, of which 12,000,000 are common stock, par value $.01 per share ("Patina Common Stock"), and 2,000,000 shares are Series A Common Stock. The Series A Common Stock is a special series of common stock of Patina having three votes per share, and will convert automatically into ordinary Patina Common Stock (i.e., shares with one vote per share) upon transfer of those shares by SOCO to a non-affiliate or if Patina ceases to be included in the consolidated financial statements of SOCO. Thus, SOCO owns 70% of the outstanding shares of the common stock of Patina and holds 75% of the voting power of Patina's common stock. Pursuant to the terms of the Merger, the shares of common stock of Gerrity issued and outstanding immediately prior to the effective time of the Merger were converted into an aggregate of 6,000,000 shares of Patina Common Stock and 3,000,000 five-year warrants initially to purchase one share of Patina Common Stock at an exercise price of $12.50 per share (the "Patina Warrants"). In addition, pursuant to an exchange offer, approximately 75% of the depositary shares representing Gerrity's $12 convertible preferred stock were accepted by Patina for exchange into approximately 1.2 million shares of Patina's 7 1/8% convertible preferred stock (the "Patina Preferred Stock"). The Patina Preferred Stock has a liquidation preference of $25.00 per share, pays quarterly dividends at the rate of 7 1/8% per year and is convertible into Patina Common Stock at a conversion price of $12.30, which conversion price is subject to downward adjustment after the Merger to equal 123% of the average closing price of the Patina Common stock for the ten trading days immediately following the 60th day after the Merger, subject to a minimum conversion price of $8.61. Patina also issued a five-year warrant for 500,000 shares of Patina Common Stock, at a price equal to the average closing price during the 10-day period following the Merger, to Robert W. Gerrity, who resigned as an officer and director of Gerrity in connection with the transaction. Patina's long-term debt, after all transaction costs, is expected to approximate $215 initially. Patina has entered into a $240 million credit facility. The facility will be used to refinance debt to be assumed in the transaction, including approximately $100 million of bank debt assumed from SOCO and Gerrity and up to $100 million of Gerrity's senior subordinated notes if the holders exercise their right to put the notes to Gerrity. $87 million of the facility may be used only to repurchase Gerrity's senior subordinated notes. The balance of the facility will be available for working capital. Because Patina will be consolidated with SOCO for accounting but not tax purposes, SOCO believes it will be required to recognize a one time non-cash charge in the second quarter of approximately $25 to $28 million of deferred tax expense related to the Merger. The Amended and Restated Agreement and Plan of Merger dated as of January 16, 1996 as amended and restated as of March 20, 1996 (the "Merger Agreement"), which was negotiated between representatives of SOCO and Gerrity, provides that any contracts or transactions (other than transactions contemplated by the Merger Agreement) involving Patina or any of its subsidiaries in which SOCO or any of its subsidiaries has any interest (other than an interest solely as a stockholder of Patina) shall be approved by either (a) a majority of the disinterested directors of Patina or (b) a majority of any committee established by the Patina Board of Directors that consists solely of directors that are disinterested. In addition, in accordance with the Merger Agreement, SOCO and Patina have entered into certain agreements, including a Business Opportunity Agreement, Corporate Services Agreement, Cross-Indemnification Agreement and Registration Rights Agreement, that will govern the relationship between SOCO and Patina following the Merger. The descriptions of the Merger Agreement, Business Opportunity Agreement, Corporate Services Agreement, Cross-Indemnification Agreement and Registration Rights Agreement included in this Report are summaries and are qualified in their entirety by the respective terms of such agreements, which are filed as exhibits to this Report and are incorporated herein by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Businesses Acquired. The following financial statements of Gerrity Oil & Gas Corporation are hereby incorporated by reference from the Amendment No. 2 to the Registration Statement on Form S-4 of Patina Oil & Gas Corporation (Registration No. 333-572): (i) Report of Independent Public Accountants (ii) Report of Independent Accountants (iii) Consolidated Balance Sheets as of December 31, 1994 and 1995 (iv) Consolidated Statements of Operations for the Years Ended December 31, 1993, 1994 and 1995 (v) Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1993, 1994 and 1995 (vi) Consolidated Statements of Cash Flows for the Years Ended December 31, 1993, 1994 and 1995 (vii) Notes to Consolidated Financial Statements The following financial statements of Gerrity Oil & Gas Corporation are hereby incorporated by reference from the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1996 of Gerrity Oil & Gas Corporation (Commission file number 0-18667): (i) Consolidated Balance Sheet as of March 31, 1996 (ii) Consolidated Statements of Operations for the Three Months Ended March 31, 1995 and 1996 (iii) Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1995 and 1996 (iv) Notes to Consolidated Financial Statements (b) Pro Forma Financial Information. The following unaudited pro forma condensed consolidated financial statements of SOCO are hereby incorporated by reference from Exhibit 99.1 filed herewith: (i) Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1996 (ii) Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Year ended December 31, 1995 (iii) Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Three Months ended March 31, 1996 (iv) Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements (c) Exhibits. --------- 2.1 Amended and Restated Agreement and Plan of Merger dated as of January 16, 1996 as amended and restated as of March 20, 1996 -- incorporated by reference to Exhibit 2.1 to Amendment No. 1 to the Registration Statement on Form S-4 of Patina Oil & Gas Corporation Registration No. 333-572) 2.2 Business Opportunity Agreement -- incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K dated May 17, 1996 of Patina Oil & Gas Corporation (Commission File No. 1-14344) 2.3 Corporate Services Agreement -- incorporated by reference to Exhibit 2.3 to the Registration Statement on Form S-4 of Patina Oil & Gas Corporation (Registration No. 333-572) 2.4 Registration Rights Agreement -- incorporated by reference to Exhibit 2.4 to the Current Report on Form 8-K dated May 17, 1996 of Patina Oil & Gas Corporation (Commission File No. 1-14344) 2.5 Cross Indemnification Agreement -- incorporated by reference to Exhibit 2.5 to the Current Report on Form 8-K dated May 17, 1996 of Patina Oil & Gas Corporation (Commission File No. 1-14344) 99.1 Unaudited Pro Forma Condensed Consolidated Financial Statements of SOCO 99.2 Audited Consolidated Financial Statements of Gerrity Oil & Gas Corporation as of December 31, 1994 and 1995 and for the years ended December 31, 1993, 1994 and 1995 -- incorporated by reference to Amendment No. 2 to the Registration Statement on Form S-4 of Patina Oil & Gas Corporation (Registration No. 333-572) 99.3 Unaudited Consolidated Financial Statements of Gerrity Oil & Gas Corporation as of March 31, 1996 and for the three months ended March 31, 1995 and 1996 -- incorporated by reference to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1996 of Gerrity Oil & Gas Corporation (Commission File No. 0-18667) 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 thereunto duly authorized. SNYDER OIL CORPORATION By: /s/Peter E. Lorenzen ---------------------- Peter E. Lorenzen Vice President May 17, 1996 EX-99 2 UNAUDITED PRO FORMAS Exhibit 99.1 PRO FORMA FINANCIAL INFORMATION OF SNYDER OIL CORPORATION The unaudited pro forma condensed consolidated financial statements set forth the financial position of the Company as of March 31, 1996, and the results of operations for the three months ended March 31, 1996, and the year ended December 31, 1995, adjusted for certain significant transactions discussed below. The pro forma financial statements are based upon the assumptions set forth in the accompanying notes to such statements. The pro forma adjustments are based upon available information and assumptions that management believes are reasonable under the circumstances. The pro forma financial statements comprise historical financial data that have been retroactively adjusted or combined to reflect the effect of the transactions discussed below on the historical financial statements of the Company. The pro forma condensed consolidated balance sheet at March 31, 1996, and the related pro forma condensed consolidated statement of operations for the three months then ended and the year ended December 31, 1995, were prepared as if the transactions were consummated on March 31, 1996, January 1, 1996, and January 1, 1995, respectively. The pro forma financial statements should be read in conjunction with the related historical financial statements and are not necessarily indicative of the results that would have actually occurred had the transactions been consummated on the dates or for the periods indicated or the results which may occur in the future. Pro Forma Divested Interests: During 1995, the Company sold the majority of its Wattenberg gas facilities in two separate transactions and sold certain oil and gas properties in West Texas for a total of approximately $96.3 million. In May 1996, the Company sold a 45% interest in the Company's Piceance Project for $22 million and a joint venture to further develop the properties was agreed upon. These transactions have been reflected in the accompanying unaudited pro forma condensed consolidated financial statements as "pro forma divested interests." Pro Forma Acquired Interests: Between September and December 1995, the Company consummated several transactions in which 18,220 additional common shares of DelMar Petroleum, Inc. ("DelMar") were acquired (raising the Company's interest from approximately 50% to 65%) primarily in exchange for the Company's common stock. The Company also purchased additional interests in oil and gas properties operated by DelMar, again primarily in exchange for the Company's common stock. In total, the Company issued 1,083,271 shares of common stock at an average price of $12.03 per share. These transactions have been reflected in the accompanying unaudited pro forma condensed consolidated financial statements as "pro forma acquired interests." Pro Forma GOG Acquisition: On May 2, 1996, SOCO consolidated (the "Merger") its Wattenberg operations with Gerrity Oil & Gas Corporation ("GOG"). As a result, SOCO will own 70% of the common stock and the former GOG shareholders will own 30% of the common stock of a new public company which will be known as Patina Oil & Gas Corporation. The Merger will be accounted for by the Company as a purchase of GOG. The Merger has been reflected in the accompanying unaudited pro forma condensed consolidated financial statements as "pro forma GOG acquisition." UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET March 31, 1996 (In thousands)
Pro Forma Pro Forma GOG Acquisition Divested Interests --------------------------------------- ------------------------ GOG Historical Adjustments Combined(1) Historical Adjustments Combined(2) ---------- ----------- ----------- ---------- ----------- ----------- ASSETS Current assets $ 87,924 $ $ 87,924 $ 15,308 $ 103,232 Investments 34,119 34,119 - 34,119 Oil and gas properties, net 431,285 (17,400)(a) 413,885 293,630 (64,417)(b) 623,033 (20,065)(d) Gas processing and transportation facilities, net 18,362 (2,800)(a) 15,562 - 15,562 Other assets, net - - 6,480 (730)(b) 5,750 ---------- ---------- ----------- ---------- $ 571,690 $ 551,490 $ 315,418 $ 781,696 ========== ========== =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 78,707 $ 78,707 $ 18,689 (7,604)(c) $ 89,792 Long-term debt 240,161 (22,000)(a) 218,161 117,500 15,884 (b) 359,149 7,604 (c) Other noncurrent liabilities 13,947 13,947 19,058 (9,465)(b) 23,540 Minority interest 3,951 3,951 - 88,605 (b) 92,556 Stockholders' equity Preferred stock, $.01 par value 10 10 4 (4)(b) 10 Common stock, $.01 par value 316 316 138 (138)(b) 316 Capital in excess of par value 264,645 264,645 160,524 (160,524)(b) 264,645 Retained earnings (deficit) (28,777) 1,800 (a) (26,977) (495) 495 (b) (47,042) (20,065)(d) Common stock held in treasury (2,715) (2,715) - (2,715) Foreign currency translation adjustment 1,212 1,212 - 1,212 Unrealized gain (loss) on investments 233 233 - 233 ---------- ---------- ---------- ---------- Total stockholders' equity 234,924 236,724 160,171 216,659 ---------- ---------- ---------- ---------- $ 571,690 $ 551,490 $ 315,418 $ 781,696 ========== ========== ========== ========== (1) Combined represents historical plus pro forma divested interests. (2) Combined represents historical plus pro forma divested interests plus pro forma GOG acquisition. The accompanying notes are an integral part of these statements.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Three Months Ended March 31, 1996 (In thousands except per share data)
Pro Forma GOG Acquisition Pro Forma Divested Interests ------------------------------------ ---------------------------- GOG Historical Adjustments Combined(1) Historical Adjustments Combined(2) ---------- ----------- ----------- ---------- ----------- ----------- Revenues Oil and gas sales $ 36,122 $ (529)(e) $ 35,593 $ 12,154 $ 47,747 Gas processing, transportation and marketing 4,451 (129)(e) 4,322 - 4,322 Gains on sales of properties (20) (20) - (20) Other 1,166 1,166 313 1,479 --------- --------- --------- --------- 41,719 41,061 12,467 53,528 --------- --------- --------- --------- Expenses Direct operating 10,759 (197)(e) 10,562 2,030 (125)(i) 12,861 394 (j) Cost of gas and transportation 3,696 (52)(e) 3,644 - 3,644 Exploration 514 514 59 573 General and administrative 3,868 3,868 1,678 (964)(i) 4,188 (394)(j) Interest and other 4,293 (358)(e) 3,935 3,408 (166)(k) 7,177 Litigation settlement - - - - Depletion, depreciation and amortization 16,771 (407)(f) 16,364 6,677 (1,123)(f) 21,918 --------- --------- --------- --------- 39,901 38,887 13,852 50,361 --------- --------- --------- --------- Income (loss) before taxes and minority interest 1,818 2,174 (1,385) 3,167 Provision for (benefit from) income taxes (310) (310) (470) 423 (l) (357) Minority interest (351) (351) - (573)(m) (924) --------- --------- --------- --------- Net income (loss) 1,777 2,133 (915) 2,600 Dividends on preferred stock 1,553 1,553 1,139 (1,139)(m) 1,553 --------- --------- --------- --------- Net income (loss) applicable to common shares $ 224 $ 580 $ (2,054) $ 1,047 ========= ========= ========= ========= Net income per common share $ .01 $ .02 $ .03 =========== ========== ========= Weighted average shares outstanding 31,302 31,302 31,302 =========== ========== ========= (1) Combined represents historical plus pro forma divested interests. (2) Combined represents historical plus pro forma divested interests plus pro forma GOG acquisition. The accompanying notes are an integral part of these statements.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Year Ended December 31, 1995 (In thousands except per share data)
Pro Forma Pro Forma Pro Forma GOG Acquisition Divested Interests Acquired Interests ------------------------------------ ------------------------ ------------------------ GOG Historical Adjustments Combined(1) Adjustments Combined(2) Historical Adjustments Combined(3) ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- Revenues Oil and gas sales $ 144,608 $ (6,449)(e) $ 138,159 $ 4,258(g) $ 142,417 $ 51,513 $ 193,930 Gas processing, transportation and marketing 38,256 (23,463)(e) 14,793 14,793 - 14,793 Gains on sales of properties 12,254 (8,730)(e) 3,524 3,524 - 3,524 Other 7,042 7,042 7,042 2,347 9,389 --------- --------- --------- --------- --------- 202,160 163,518 167,776 53,860 221,636 --------- --------- --------- --------- --------- Expenses Direct operating 52,486 (3,528)(e) 48,958 903(g) 49,861 8,366 (500)(i) 59,302 1,575 (j) Cost of gas and transportation 29,374 19,514)(e) 9,860 9,860 - 9,860 Exploration 8,033 (265)(e) 7,768 7,768 285 8,053 General and administrative 17,680 (1,622)(e) 16,058 16,058 7,731 (4,705)(i) 17,509 (1,575)(j) Interest and other 27,001 (6,321)(e) 20,680 20,680 15,333 (1,877)(k) 34,136 Litigation settlement 4,400 4,400 4,400 - 4,400 Depletion, depreciation and amortization 103,790 (8,880)(f) 94,910 1,975(g) 96,885 30,333 (7,054)(f) 120,164 --------- --------- --------- -------- --------- 242,764 202,634 205,512 62,048 253,424 --------- --------- --------- -------- --------- Income (loss) before taxes and minority interest (40,604) (39,116) (37,736) (8,188) (31,788) Provision for (benefit from) income taxes (1,345) (1,345) (1,345) (215) 879 (l) (681) Minority interest (572) (572) 125(h) (447) - (2,763)(m) (3,210) --------- --------- --------- -------- --------- Net income (loss) (39,831) (38,343) (36,838) (7,973) (34,317) Dividends on preferred stock 6,210 6,210 6,210 4,554 (4,554)(m) 6,210 --------- --------- --------- -------- --------- Net income (loss) applicable to common shares $ (46,041) $ (44,553) $ (43,048) $ (12,527) $ (40,527) ========= ========= ========= ========= ========= Net income (loss) per common share $ (1.53) $ (1.48) $ (1.38) $ (1.30) ========= ========= ========= ========= Weighted average shares outstanding 30,186 30,186 31,269 31,269 ========= ========= ========= ========= (1) Combined represents historical plus pro forma divested interests. (2) Combined represents historical plus pro forma divested interests plus pro forma acquired interests. (3) Combined represents historical plus pro forma divested interests plus pro forma acquired interests plus pro forma GOG acquisition. The accompanying notes are an integral part of these statements.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The unaudited pro forma consolidated financial statements reflect the adjustments described below: BALANCE SHEET (a) To reflect the sale of a 45% interest in the Company's Piceance Project with proceeds being used to reduce long-term debt. (b) To reflect the acquisition of GOG, including the elimination of GOG's capital stock and retained earnings and the recognition of minority interests. (c) To reflect the refinancing of certain current liabilities under Patina's bank credit facility. (d) To reflect the excess of fair market value received over the historical value of minority interest sold of approximately $4.7 million and related non-cash tax effects of approximately $24.8 million recognized as a result of the Merger. STATEMENTS OF OPERATIONS Certain items have been excluded in the accompanying pro forma condensed consolidated statements of operations due to their non-recurring nature. These items are adjustments to reflect the excess of fair market value received over the historical value of minority interest sold of approximately $4.7 million and related non-cash tax effects of approximately $24.8 million recognized as a result of the Merger. (e) To reflect the revenue and expense items attributable to the divested interests. (f) To adjust depletion, depreciation and amortization to the amount which would have been provided. (g) To reflect the revenue, direct operating expenses and depletion, depreciation and amortization attributable to the acquired interest. (h) To reflect the earnings attributable to the purchase of additional common shares of a consolidated subsidiary. (i) To reflect the reduction in direct operating and general and administrative expenses that result from the elimination of redundant personnel, lease space and other corporate services. (j) To conform the financial statement presentation by GOG of various overhead charges and recoveries on a basis consistent with that of SOCO. (k) To adjust interest expense to reflect the refinancing or payment of $33.3 million of GOG's 11.75% Senior Subordinated Notes and certain other obligations. Under the terms of GOG's Senior Subordinated Notes, GOG is obligated to purchase any Notes put to GOG at a price of 101% of the principal amount thereof upon certain asset sales or dispositions. For each $10 million change in the amount of Notes refinanced, pro forma interest expense and income from continuing operations would change by $119,000 and $77,000 for the three months ended March 31, 1996 and by $475,000 and $308,000 for the year ended December 31, 1995, respectively. (l) To record the estimated consolidated provision for income taxes to reflect the anticipated effective income tax rates of both the Company and its subsidiary which will be consolidated for financial reporting purposes but not for tax purposes. (m) To reflect minority interests of Patina's (formerly GOG's) minority shareholders. -----END PRIVACY-ENHANCED MESSAGE-----