Vintage Petroleum 8-K Vintage Petroleum Announces the Sale of Its

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) January 21, 2003

VINTAGE PETROLEUM, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-10578	73-1182669
(State or other	(Commission File	(IRS Employer
jurisdiction of	Number)	Identification No.)
incorporation)

110 West Seventh Street, Tulsa, Oklahoma	74119
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (918) 592-0101

Not applicable

(Former name or former address, if changed since last report)

Item 5. Other Events.

On December 16, 2002, Vintage Petroleum, Inc. (the “Company”) reported it had signed an agreement to sell its interests in Ecuador to a major independent oil and gas company for $141.7 million, subject to certain adjustments. The sale is expected to close January 31, 2003, subject to normal conditions precedent to closing. A copy of the Company’s press release dated December 16, 2002, is attached as an exhibit hereto and incorporated herein by reference. The Company plans to use the proceeds from the sale to reduce its long-term debt.

The following unaudited financial information is included to supplement the Company’s previously issued consolidated financial statements included in the Company’s Form 8-K filed on November 27, 2002, and Form 10-Q for the quarter ended September 30, 2002, and presents the Company’s balance sheets and statements of operations as if the Company’s Ecuador interests were discontinued operations. Consistent with the Company’s previously issued consolidated financial statements, the Company’s Trinidad interests are also presented as discontinued operations. The unaudited financial information does not reflect any gain or loss related to the Ecuador sale.

For comparative purposes, income from continuing operations before cumulative change in accounting principle as reported in the Company’s Form 8-K was $134.1 million, $197.4 million and $73.4 million for the years ended December 31, 2001, 2000 and 1999, respectively. Income from continuing operations before cumulative change in accounting principle reported in the Company’s Form 10-Q for the nine months ended September 30, 2002 was $34.0 million. Additionally, the reported loss from discontinued operations was $0.6 million and $0.1 million for the years ended December 31, 2001 and 2000, respectively. The reported income from discontinued operations for the nine months ended September 30, 2002 was $14.5 million.

The unaudited financial information should be read in conjunction with the 2001 audited financial statements and related notes included in the Company’s Form 8-K filed on November 27, 2002, and the unaudited financial statements included in the Company’s Form 10-Q for the quarter ended September 30, 2002.

The following financial information of the Company is included as part of this Form 8-K:

VINTAGE PETROLEUM, INC. AND SUBSIDIARIES:	Page
Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001 and 2000	3
as if the Company’s Ecuador interests were discontinued operations (Unaudited)
Consolidated Statements of Operations for the nine months ended September 30, 2002
and the years ended December 31, 2001, 2000, and 1999 as if
the Company’s Ecuador interests were discontinued operations (Unaudited)	4-5
Note to Financial Information (Unaudited)	6-7

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VINTAGE PETROLEUM, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except shares and per share amounts)

(Unaudited) 

A S S E T S

	September 30, 2002			December 31, 2001			December 31, 2000
CURRENT ASSETS:
Cash and cash equivalents	$	4,868		$	6,359		$	1,370
Accounts receivable—
Oil and gas sales		93,140			73,246			136,187
Joint operations		11,836			12,041			14,049
Derivative financial instruments receivable		—			4,701			—
Prepaids and other current assets		23,512			34,382			10,552
Assets of discontinued operations		84,753			86,511			84,559
Total current assets		218,109			217,240			246,717
PROPERTY, PLANT AND EQUIPMENT, at cost:
Oil and gas properties, successful efforts method		2,476,102			2,434,592			1,686,598
Oil and gas gathering systems and plants		22,368			20,508			19,252
Other		26,220			25,367			19,548
		2,524,690			2,480,467			1,725,398
Less accumulated depreciation, depletion and amortization		914,828			803,135			664,410
		1,609,862			1,677,332			1,060,988
GOODWILL, net of amortization		96,861			156,990			—
OTHER ASSETS, net		51,784			56,340			44,297
	$	1,976,616		$	2,107,902		$	1,352,002
L I A B I L I T I E S   A N D   S T O C K H O L D E R S’   E Q U I T Y
CURRENT LIABILITIES:
Revenue payable	$	27,500		$	25,625		$	59,872
Accounts payable—trade		34,567			57,613			42,096
Current income taxes payable		17,218			21,638			43,187
Short-term debt		5,455			17,320			3,400
Derivative financial instruments payable		11,491			—			—
Other payables and accrued liabilities		56,908			42,471			57,761
Liabilities of discontinued operations		8,712			7,134			5,976
Total current liabilities		161,851			171,801			212,292
LONG-TERM DEBT		924,215			1,010,673			464,229
DEFERRED INCOME TAXES		180,610			177,777			46,857
OTHER LONG-TERM LIABILITIES		6,100			18,208			3,767
STOCKHOLDERS’ EQUITY, per accompanying statements:
Preferred stock, $.01 par, 5,000,000 shares authorized, zero shares issued and outstanding		—			—			—
Common stock, $.005 par, 160,000,000 shares authorized, 63,404,972, 63,081,322 and 62,801,416 shares issued     and 63,328,972, 63,081,322 and 62,801,416 outstanding		317			315			314
Capital in excess of par value		326,163			324,077			319,893
Retained earnings		409,451			428,443			303,449
Accumulated other comprehensive income (loss)		(29,426	)		(21,632	)		1,201
		706,505			731,203			624,857
Less unamortized cost of restricted stock awards		2,665			1,760			—
		703,840			729,443			624,857
	$	1,976,616		$	2,107,902		$	1,352,002

See note to financial information.

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VINTAGE PETROLEUM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	For the Nine Months Ended September 30,			For the Years Ended December 31,
	2002			2001			2000			1999
REVENUES:
Oil and gas sales	$	422,644		$	707,090		$	649,736		$	367,571
Gas marketing		45,215			130,209			128,836			60,275
Oil and gas gathering		4,524			17,032			19,998			6,955
Gain (loss) on disposition of assets		17,259			26,871			(1,731	)		54,991
Foreign currency exchange gain (loss)		3,408			1,825			(79	)		—
Other income (expense)		592			1,940			(21,380	)		3,733
		493,642			884,967			775,380			493,525
COSTS AND EXPENSES:
Lease operating, including production taxes		151,005			204,650			153,522			120,348
Exploration costs		21,594			21,587			22,677			14,674
Gas marketing		43,937			126,373			123,787			57,550
Oil and gas gathering		5,077			17,759			17,052			5,153
General and administrative		36,852			48,130			39,757			35,465
Depreciation, depletion and amortization		138,525			165,984			98,042			106,485
Impairment of oil and gas properties		—			29,050			225			3,306
Amortization of goodwill		—			11,940			—			—
Interest		58,226			64,720			48,437			58,634
Loss on early extinguishment of debt		8,154			—			—			—
		463,370			690,193			503,499			401,615
Income from continuing operations before income taxes and cumulative effect of change in accounting principle		30,272			194,774			271,881			91,910
PROVISION (BENEFIT) FOR INCOME TAXES:
Current		19,004			80,535			68,858			5,876
Deferred		(17,996	)		(12,210	)		31,537			18,375
		1,008			68,325			100,395			24,251
Income from continuing operations before cumulative effect of change in accounting principle		29,264			126,449			171,486			67,659
INCOME FROM DISCONTINUED OPERATIONS, net of income tax expense (benefit) of $18,280, $2,148, $(7,435) and $78, respectively		19,241			7,058			25,421			5,712
Income before cumulative effect of change in accounting principle		48,505			133,507			196,907			73,371
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, net of income tax benefit of zero, zero, $407 and zero, respectively		(60,547	)		—			(1,014	)		—
NET INCOME (LOSS)	$	(12,042	)	$	133,507		$	195,893		$	73,371

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VINTAGE PETROLEUM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	For the Nine Months Ended September 30,		For the Years Ended December 31,
	2002		2001	2000		1999
BASIC INCOME (LOSS) PER SHARE:
Income from continuing operations before cumulative effect of change in accounting principle	.46		2.01	2.74		1.17
Income from discontinued operations	.31		.11	.41		.10
Income before cumulative effect of change in accounting principle	.77		2.12	3.15		1.27
Cumulative effect of change in accounting principle	(.96	)	—	(.02	)	—
Net income (loss)	(.19	)	2.12	3.13		1.27
DILUTED INCOME (LOSS) PER SHARE:
Income from continuing operations before cumulative effect of change in accounting principle	.46		1.98	2.68		1.14
Income from discontinued operations	.30		.11	.40		.10
Income before cumulative effect of change in accounting principle	.76		2.09	3.08		1.24
Cumulative effect of change in accounting principle	(.95	)	—	(.02	)	—
Net income (loss)	(.19	)	2.09	3.06		1.24
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic	63,181		63,023	62,644		57,989
Diluted	63,661		64,027	63,963		59,315

See note to financial information.

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VINTAGE PETROLEUM, INC. AND SUBSIDIARIES

NOTE TO FINANCIAL INFORMATION

For the Nine Months Ended September 30, 2002 and the Years Ended December 31, 2001, 2000 and 1999

(Unaudited)

1. DISCONTINUED OPERATIONS

On July 30, 2002, Vintage Petroleum, Inc. (the “Company”) completed the sale of its operations in Trinidad. The Company received $40 million in cash and recorded a gain of approximately $31.9 million ($14.9 million after income taxes), subject to post-closing adjustments.

On December 16, 2002, the Company reported it had signed an agreement to sell its interests in Ecuador to a major independent oil and gas company for $141.7 million, subject to certain adjustments. In the agreement, Vintage commits to sell for cash all of the stock of its indirect wholly-owned subsidiary, Vintage Oil Ecuador, S.A. The transaction is scheduled to close January 31, 2003, subject to normal conditions precedent to closing.

In accordance with the rules established by SFAS No. 144, the Company’s Trinidad operations, along with the gain on the sale, and the Company’s Ecuador operations are accounted for as discontinued operations in the accompanying consolidated financial information.

Following is summarized financial information for the Company’s Trinidad operations (in thousands):

	Nine Months Ended September 30,			Years Ended December 31,
	2002			2001			2000			1999
Loss from discontinued operations	$	(711	)	$	(980	)	$	(104	)	$	—
Deferred tax expense (benefit)		(253	)		(343	)		—			—
Net operating loss from discontinued operations		(458	)		(637	)		(104	)		—
Gain on sale of Trinidad operations, net of $16,939 income tax expense		14,943			—			—			—
Income (loss) from discontinued operations, net of tax	$	14,485		$	(637	)	$	(104	)	$	—

	September 30, 2002		December 31, 2001		December 31, 2000
Current assets	$	—	$	1,274	$	389
Property, plant and equipment, net		—		7,898		2,321
Assets of discontinued operations	$	—	$	9,172	$	2,710
Current liabilities	$	—	$	972	$	20
Liabilities of discontinued operations	$	—	$	972	$	20

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VINTAGE PETROLEUM, INC. AND SUBSIDIARIES

NOTE TO FINANCIAL INFORMATION

For the Nine Months Ended September 30, 2002 and the Years Ended December 31, 2001, 2000 and 1999

Following is summarized financial information for the Company’s Ecuador operations (in thousands):

	Nine Months Ended September 30,		Years Ended December 31,
	2002		2001		2000			1999
Income from discontinued operations	$	6,350	$	10,186	$	18,497		$	5,790
Current tax expense		—		—		—			78
Deferred tax expense (benefit)		1,595		2,491		(7,435	)		—
Income from discontinued operations, net of tax	$	4,755	$	7,695	$	25,932		$	5,712

	September 30, 2002		December 31, 2001		December 31, 2000
Current assets	$	17,486	$	12,650	$	23,941
Property, plant and equipment, net		54,293		49,814		41,745
Other assets		3,454		3,761		2,558
Deferred income taxes		9,520		11,114		13,605
Assets of discontinued operations	$	84,753	$	77,339	$	81,849
Current liabilities	$	8,712	$	6,162	$	5,956
Liabilities of discontinued operations	$	8,712	$	6,162	$	5,956

In accordance with Statement of Financial Accounting Standards No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets, the assets of the Company’s Trinidad and Ecuador operations were reclassified as “Assets of discontinued operations” and the liabilities were reclassified as “Liabilities of discontinued operations” in the accompanying consolidated balance sheets as of September 30, 2002, December 31, 2001 and December 31, 2000.

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Item 7. Financial Statements and Exhibits

(c) Exhibits

99. Press release dated December 16, 2002, issued by the Company.

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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.

VINTAGE PETROLEUM, INC.
By:	/s/    Michael F. Meimerstorf
	Michael F. Meimerstorf Vice President and Controller

Date: January 21, 2003

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EXHIBIT INDEX

EXHIBIT
NUMBER	DESCRIPTION
99.	Press release dated December 16, 2002, issued by the Company.

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