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): May 24, 2002
TIPPERARY CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS
(State or other jurisdiction of incorporation)
1-7796 | | 75-1236955 |
(Commission File Number) | | (IRS Employer Identification No.) |
633 Seventeenth Street, Suite 1550 Denver, Colorado | | 80202 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (303) 293-9379
Not Applicable
(Former name or former address, if changed since last report)
EXPLANATORY NOTE
This Form 8-K(A) is being filed to reflect Tipperary Corporation’s revision of its Pro Forma analysis and Note 2 to the Consolidated Pro Forma Financial Statements in the Form 8-K filed on June 10, 2002. Based on additional information obtained subsequent to the 8-K filing, the Company has revised its estimate of the fair market value of the unproved properties retained after the West Buna transaction. As a result, the Company has recorded a $766,000 gain on the West Buna transaction during the quarter ended June 30, 2002. The pro forma analysis has been revised to reflect the $766,000 gain, rather than the estimated loss of $1,297,000 that was previously reported. Other disclosures within the previously filed 8-K including “Item 2. Acquisition or Disposition of Assets” and all exhibits were not amended and have not been included in this filing.
Item 2. Acquisition or Disposition of Assets.
See Explanatory Note.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
The accompanying unaudited consolidated pro forma financial information has been prepared to give effect to the disposition of the West Buna properties to Delta Petroleum Corporation (“Delta”) and the purchase of the interest in ATP 526 from Delta. The accompanying unaudited consolidated balance sheet as of March 31, 2002 is prepared as if the transactions occurred on March 31, 2002. The accompanying unaudited consolidated statements of operations for the year ended December 31, 2001 and the three months ended March 31, 2002 have been prepared to give effect to the disposition of the West Buna properties to Delta and the purchase of the interest in ATP 526 from Delta. These consolidated statements of operations are prepared as if the transactions occurred on January 1, 2001.
The following pro forma statements are subject to risks and uncertainties. Although the Company believes that its estimates are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. The operations of the Company, both domestically and internationally, are subject to risks including, but not limited to, all of the risks that are encountered in the drilling and completing of wells, along with standard risks of oil and gas operations, uninsured hazards, volatile oil and gas prices, foreign exchange rate risk and uncertain markets and governmental regulation. For a discussion of these and other risks which relate to the forward-looking statements contained herein, please see “Risk Factors” in the Company’s Registration Statement on Form S-3, SEC File No. 333-59052, which discussion is incorporated herein by reference, along with other cautionary statements in this report.
1
Tipperary Corporation and Subsidiaries
Consolidated Balance Sheet
Pro Forma Analysis
(in thousands)
(unaudited)
| | | Historical as of March 31 2002
| | | Pro Forma West Buna Disposition 2002
| | | Pro Forma After Disposition 2002
| | | Pro Forma Comet Ridge Interest Acquisition 2002
| | | Pro Forma as of March 31 2002
| |
ASSETS | | | | | | | | | | | | | | | | | | | | |
| Current assets: | | | | | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 4,350 | | | $ | 4,100 | (1) | | $ | 8,450 | | | $ | (4,800 | )(1) | | $ | 3,650 | |
| Restricted cash | | | 1,964 | | | | — | | | | 1,964 | | | | — | | | | 1,964 | |
| Receivables | | | 1,645 | | | | — | | | | 1,645 | | | | — | | | | 1,645 | |
| Prepaid drilling costs | | | 358 | | | | — | | | | 358 | | | | — | | | | 358 | |
| Other current assets | | | 226 | | | | — | | | | 226 | | | | — | | | | 226 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Total current assets | | | 8,543 | | | | 4,100 | | | | 12,643 | | | | (4,800 | ) | | | 7,843 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Property, plant and equipment, at cost: | | | | | | | | | | | | | | | | | | | | |
| Oil and gas properties, full cost method | | | 77,652 | | | | (3,334 | )(2) | | | 74,318 | | | | 5,550 | (2) | | | 79,868 | |
| Other property and equipment | | | 3,953 | | | | — | | | | 3,953 | | | | — | | | | 3,953 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | 81,605 | | | | (3,334 | ) | | | 78,271 | | | | 5,550 | | | | 83,821 | |
|
| Less accumulated depreciation and amortization | | | (23,911 | ) | | | — | | | | (23,911 | ) | | | — | | | | (23,911 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Property plant and equipment, net | | | 57,694 | | | | (3,334 | ) | | | 54,360 | | | | 5,550 | | | | 59,910 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Deferred loan costs | | | 6,339 | | | | — | | | | 6,339 | | | | — | | | | 6,339 | |
| Other noncurrent assets | | | 20 | | | | — | | | | 20 | | | | — | | | | 20 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | $ | 72,596 | | | $ | 766 | | | $ | 73,362 | | | $ | 750 | | | $ | 74,112 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | |
| Current liabilities | | | | | | | | | | | | | | | | | | | | |
| Current portion of long-term debt | | | 2,473 | | | | — | | | | 2,473 | | | | — | | | | 2,473 | |
| Accounts payable | | | 959 | | | | — | | | | 959 | | | | 300 | | | | 1,259 | |
| Accrued liabilities | | | 1,011 | | | | — | | | | 1,011 | | | | — | | | | 1,011 | |
| Royalties payable | | | 170 | | | | — | | | | 170 | | | | — | | | | 170 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Total current liabilities | | | 4,613 | | | | — | | | | 4,613 | | | | 300 | | | | 4,913 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
| Long-term debt, net of current portion | | | 11,861 | | | | — | | | | 11,861 | | | | — | | | | 11,861 | |
|
| Minority interest | | | 583 | | | | — | | | | 583 | | | | — | | | | 583 | |
|
| Stockholders’ equity | | | | | | | | | | | | | | | | | | | | |
| Common stock | | | 780 | | | | — | | | | 780 | | | | 5 | (2) | | | 785 | |
| Capital in excess of par value | | | 149,502 | | | | — | | | | 149,502 | | | | 445 | (2) | | | 149,947 | |
| Accumulated deficit | | | (94,718 | ) | | | 766 | (2) | | | (93,952 | ) | | | — | | | | (93,952 | ) |
| Treasury stock, at cost | | | (25 | ) | | | — | | | | (25 | ) | | | — | | | | (25 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Total stockholders’ equity | | | 55,539 | | | | 766 | | | | 56,305 | | | | 450 | | | | 56,755 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | $ | 72,596 | | | $ | 766 | | | $ | 73,362 | | | $ | 750 | | | $ | 74,112 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
See accompanying notes to unaudited pro forma consolidated financial statements
2
Tipperary Corporation and Subsidiaries
Consolidated Statements of Operations
Pro Forma Analysis
(in thousands except per share amounts)
(unaudited)
| | | Historical Year Ended December 31 2001
| | | Pro Forma West Buna Disposition 2001
| | | Pro Forma After Disposition 2001
| | | Pro Forma Comet Ridge Interest Acquisition 2001
| | | Pro Forma Year Ended December 31 2001
| |
| Revenues | | $ | 3,557 | | | $ | (925 | )(3) | | $ | 2,632 | | | $ | 117 | (3) | | $ | 2,749 | |
|
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | |
| Operating | | | 2,218 | | | | (463 | )(4) | | | 1,755 | | | | 114 | (4) | | | 1,869 | |
| General and administrative | | | 4,257 | | | | — | | | | 4,257 | | | | — | | | | 4,257 | |
| Depreciation, depletion and amortization | | | 1,017 | | | | (203 | )(5) | | | 814 | | | | 86 | (5) | | | 900 | |
| Impairment of prepaid drilling costs | | | 900 | | | | — | | | | 900 | | | | — | | | | 900 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Total costs and expenses | | | 8,392 | | | | (666 | ) | | | 7,726 | | | | 200 | | | | 7,926 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Operating income | | | (4,835 | ) | | | (259 | ) | | | (5,094 | ) | | | (83 | ) | | | (5,177 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
| Other income (expense): | | | | | | | | | | | | | | | | | | | | |
| Interest income | | | 129 | | | | — | | | | 129 | | | | — | | | | 129 | |
| Interest expense | | | (2,848 | ) | | | — | | | | (2,848 | ) | | | — | | | | (2,848 | ) |
| Foreign currency exchange gain (loss) | | | (5 | ) | | | — | | | | (5 | ) | | | — | | | | (5 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Total other expense | | | (2,724 | ) | | | — | | | | (2,724 | ) | | | — | | | | (2,724 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
| Loss before income taxes | | | (7,559 | ) | | | (259 | ) | | | (7,818 | ) | | | (83 | ) | | | (7,901 | ) |
|
| Income tax benefit | | | (1 | ) | | | — | | | | (1 | ) | | | — | | | | (1 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
| Loss before minority interest | | | (7,558 | ) | | | (259 | ) | | | (7,817 | ) | | | (83 | ) | | | (7,900 | ) |
|
| Minority interest in loss of subsidiary | | | 382 | | | | — | | | | 382 | | | | — | | | | 382 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
| Net loss | | $ | (7,176 | ) | | $ | (259 | ) | | $ | (7,435 | ) | | $ | (83 | ) | | $ | (7,518 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Net loss (per share basic and diluted) | | $ | (0.28 | ) | | | | | | $ | (0.29 | ) | | | | | | $ | (0.29 | ) |
| | |
|
|
| | | | | |
|
|
| | | | | |
|
|
|
| Weighted average shares outstanding—basic and diluted | | | 25,842 | | | | | | | | 25,842 | | | | | | | | 26,092 | |
See accompanying notes to unaudited pro forma consolidated financial statements
3
Tipperary Corporation and Subsidiaries
Consolidated Statements of Operations
Pro Forma Analysis
(in thousands except per share amounts)
(unaudited)
| | | Historical Quarter Ended March 31 2002
| | | Pro Forma West Buna Disposition 2002
| | | Pro Forma After Disposition 2002
| | | Pro Forma Comet Ridge Interest Acquisition 2002
| | | Pro Forma Quarter Ended March 31 2002
| |
| Revenues | | $ | 1,352 | | | $ | (393 | )(3) | | $ | 959 | | | $ | 16 | (3) | | $ | 975 | |
|
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | |
| Operating | | | 592 | | | | (63 | )(4) | | | 529 | | | | 36 | (4) | | | 565 | |
| General and administrative | | | 1,547 | | | | — | | | | 1,547 | | | | — | | | | 1,547 | |
| Depreciation, depletion and amortization | | | 423 | | | | (116 | )(5) | | | 307 | | | | 42 | (5) | | | 349 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Total costs and expenses | | | 2,562 | | | | (179 | ) | | | 2,383 | | | | 78 | | | | 2,461 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Operating income | | | (1,210 | ) | | | (214 | ) | | | (1,424 | ) | | | (62 | ) | | | (1,486 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
| Other income (expense): | | | | | | | | | | | | | | | | | | | | |
| Other income | | | 70 | | | | — | | | | 70 | | | | — | | | | 70 | |
| Interest income | | | 16 | | | | — | | | | 16 | | | | — | | | | 16 | |
| Interest expense | | | (632 | ) | | | — | | | | (632 | ) | | | — | | | | (632 | ) |
| Foreign currency exchange gain (loss) | | | 23 | | | | — | | | | 23 | | | | — | | | | 23 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Total other expense | | | (523 | ) | | | — | | | | (523 | ) | | | — | | | | (523 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
| Loss before income taxes | | | (1,733 | ) | | | (214 | ) | | | (1,947 | ) | | | (62 | ) | | | (2,009 | ) |
|
| Income tax benefit | | | — | | | | — | | | | — | | | | — | | | | — | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
| Loss before minority interest | | | (1,733 | ) | | | (214 | ) | | | (1,947 | ) | | | (62 | ) | | | (2,009 | ) |
|
| Minority interest in loss of subsidiary | | | 150 | | | | — | | | | 150 | | | | — | | | | 150 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
| Net loss | | $ | (1,583 | ) | | $ | (214 | ) | | $ | (1,797 | ) | | $ | (62 | ) | | $ | (1,859 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
| Net loss (per share basic and diluted) | | $ | (0.04 | ) | | | | | | $ | (0.05 | ) | | | | | | $ | (0.05 | ) |
| | |
|
|
| | | | | |
|
|
| | | | | |
|
|
|
| Weighted average shares outstanding—basic and diluted | | | 38,971 | | | | | | | | 38,971 | | | | | | | | 39,221 | |
See accompanying notes to unaudited pro forma consolidated financial statements
4
Tipperary Corporation and Subsidiaries
Notes to Consolidated Pro Forma Financial Statements
Note 1. Pro Forma adjustment to cash
Amounts shown for disposition and acquisition represent negotiated cash paid out and received as a result of the transactions.
Note 2. Pro Forma adjustments to oil and gas properties and stockholder’s equity
Under the full cost method of accounting for oil and gas exploration and production, sales of oil and gas properties are accounted for as adjustments of capitalized costs, with no gain or loss recognized unless such adjustments would significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center. If a gain or loss is to be recognized, the cost of the property sold is an allocation of the cost center’s total costs based on the relative fair market value of the property sold compared to the estimated fair market value of the properties retained. On May 24, 2002, the Company sold its remaining U.S. proved producing property, retaining only unproved properties in the U.S. cost center, and it recognized a gain of $766,000 on the sale.
The acquisition will increase the Australian full cost pool by $5,550,000 as the transaction required Tipperary to pay $4,800,000 in cash, and issue 250,000 shares of Tipperary common stock valued at $450,000, and assume estimated liabilities of $300,000.
Note 3. Pro Forma adjustments to revenue
During the first quarter of 2002 and during 2001, the Company recorded $393,000 and $925,000, respectively, in revenue related to its West Buna properties. The Company would have recorded revenue of $16,000 and $117,000, respectively, in the first quarter of 2002 and during 2001, associated with its Comet Ridge acquisition.
Note 4. Pro Forma adjustments to operating expense
During the first quarter of 2002 and during 2001, the Company recorded $63,000 and $463,000, respectively, in operating expenses related to its West Buna properties. The Company’s proportionate increase in operating expenses relating to its Comet Ridge acquisition is estimated to be $36,000 for the first quarter of 2002 and $114,000 for 2001.
5
Note 5. Pro Forma adjustments to depreciation, depletion and amortization
During the first quarter of 2002 and during 2001 the Company recorded $116,000 and $203,000, respectively, in depreciation, depletion and amortization related to its West Buna properties. The increase in depreciation, depletion and amortization for both the first quarter of 2002 and for 2001 relating to its Comet Ridge acquisition is due to increases in the full cost pool, reserve volumes, future development costs and production volumes relating to the Company’s proportionate ownership increase in the Comet Ridge project.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 13, 2002.
TIPPERARY CORPORATION |
|
| By: | | /s/ DAVID L. BRADSHAW
|
| | | David L. Bradshaw, President, Chief Executive Officer and Chairman of the Board of Directors |
6
