SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 1999
FORTUNE NATURAL RESOURCES CORPORATION
-------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 1-12334 95-4114732
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
515 W. Greens Road, Suite 720, Houston, Texas 77067
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (281) 872-1170
Registrant's telecopier number, including area code: (281) 872-1213
N/A
------------------------------------------------------------
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
Fortune's press release of November 2, 1999 follows:
NOVEMBER 2, 1999 - HOUSTON, TEXAS - FORTUNE NATURAL RESOURCES CORPORATION
(OTC BB: FPXA) announced today its financial results for the quarter ended
September 30, 1999.
Third quarter 1999 vs. 1998
---------------------------
Fortune incurred a net loss for the third quarter of 1999 of $316,000, or
$0.03 per share, compared to a net loss of $1,165,000, or $0.10 per share, for
the third quarter of 1998. The lower 1999 loss is due to a combination of higher
oil and gas prices, a reduction in most costs as a result of our cost reduction
plan implemented in January 1999 and the absence of an impairment to oil and gas
properties in 1999. Fortune's third quarter 1999 loss of $316,000 is also an
improvement over its $393,000 loss reported during the second quarter of 1999,
and it is the lowest loss reported by Fortune since the fourth quarter of 1996.
Furthermore, this is the fourth consecutive quarter in which the reported loss
has declined.
Fortune's oil and gas revenues continue to improve as a result of higher
oil and gas prices. Furthermore, successful drilling results are partially
offsetting production declines from depletion. New production from three
successful year-end 1998 exploratory wells, at South Timbalier Block 86 and two
at Espiritu Santo Bay, began contributing revenues during the quarter ended June
30, 1999. Two other successful exploratory wells, one at Bay Marchand Block 5
and one at Bacon prospect in Mississippi, began contributing revenues during the
third quarter of 1999. Consequently, Fortune's revenues from sales of oil and
gas for the third quarter ended September 30, 1999 ($460,000) were higher than
the third quarter ended September 30, 1998 ($388,000) and were the highest
quarterly oil and gas revenues since Fortune sold its interest in East Bayou
Sorrel on March 31, 1998.
Gas prices increased to $2.60 per MCF (24%) during the third quarter of
1999 versus $2.09 per MCF for the same 1998 period. Oil prices increased to
$18.98 per Bbl (62%) versus $11.75 per Bbl for 1998. In addition to increased
oil and gas revenues, Fortune experienced decreases in general and
administrative expense of 5%; depreciation, depletion and amortization of 14%;
and interest expense of 63% for the third quarter of 1999 versus 1998.
Furthermore, Fortune did not incur an impairment to oil and gas properties in
1999 compared to a $600,000 impairment in the third quarter of 1998.
Year-to-date 1999 vs. 1998
--------------------------
Fortune incurred a net loss for the first nine months of 1999 of
$1,261,000, or $0.10 per share, compared to a net loss of $2,629,000, or $0.22
per share, for the first nine months of 1998.
Primarily as a result of Fortune's sale of its East Bayou Sorrel field on
March 31, 1998 for $4.7 million and lower gas prices earlier this year, oil and
gas revenues for the first nine months of 1999 decreased 25% to $1,136,000,
compared to $1,511,000 reported for the first nine months of 1998. Oil prices
increased 22% while gas prices increased 1% for the first nine months of 1999
versus 1998. The sale of East Bayou Sorrel was the primary contributor to the
decrease in oil production of 64% and gas production of 11% for the first nine
months of 1999 versus 1998. Offsetting the decreased oil and gas revenues were
decreases in production and operating expense of 31%; depreciation, depletion
and amortization of 38%; general and administrative expense of 16%; and interest
expense of 41% for the first nine months of 1999 versus 1998. Furthermore,
Fortune did not incur any impairments to oil and gas properties thus far in 1999
versus $860,000 incurred during the first nine months of 1998.
2
FORTUNE NATURAL RESOURCES CORPORATION is an independent oil and gas
exploration and production company with its principal properties located onshore
and offshore Louisiana and Texas. Certain statements in this news release
regarding future expectations and plans may be regarded as "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. They are subject to various
risks, such as operating hazards, drilling risks, and other uncertainties
inherent in the business of exploring for, developing and producing oil and gas
which may be beyond Fortune's control. For a discussion of the contingencies and
uncertainties affecting future events and forward-looking statements, see
Fortune's most recent Annual Report on Form 10-K, as well as its other filings
with the Securities and Exchange Commission. There can be no assurance that
Fortune will be successful in meeting its expectations.
************
Company Contact: J. Michael Urban
Vice President and CFO
(281) 872-1170
3
FORTUNE NATURAL RESOURCES CORPORATION
Consolidated Statements of Operations
($ in thousands, except per share figures)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- -------------------------
1999 1998 1999 1998
----------- ----------- ---------- ----------
(Unaudited)
REVENUES
Sales of oil and gas, net of royalties $ 460 $ 388 $ 1,136 $ 1,511
Other income 9 42 33 118
----------- ----------- ---------- ----------
Total Revenues 469 430 1,169 1,629
----------- ----------- ---------- ----------
COSTS AND EXPENSES
Production and operating 128 118 330 477
Provision for depletion, depreciation and amortization 249 290 689 1,120
Impairment to oil and gas properties - 600 - 860
General and administrative 311 328 960 1,142
Note restructuring cost - - 61 -
Interest paid in cash 97 97 291 306
Interest - amortization of deferred financing cost - 162 99 353
----------- ----------- ---------- ----------
785 1,595 2,430 4,258
----------- ----------- ---------- ----------
Loss before income taxes (316) (1,165) (1,261) (2,629)
Provision for income taxes - - - -
----------- ----------- ---------- ----------
Net loss $ (316) $ (1,165) $ (1,261) $ (2,629)
=========== =========== ========== ===========
Weighted average common shares
outstanding (thousands) 12,234 12,134 12,189 12,130
----------- ----------- ---------- ----------
Net loss per common share $ (0.03) $ (0.10) $ (0.10) $ (0.22)
=========== =========== ========== ==========
Net cash used in operating activities $ (594) $ (324)
========== ==========
Net cash provided by (used in) investing activities $ (302) $ 1,680
========== ==========
Net cash used in financing activities $ - $ (638)
========== ==========
Summary of Balance Sheets
September 30, 1999 December 31, 1998
------------------ -----------------
Total current assets $ 896 $ 1,887
Current liabilities 224 563
Long-term debt 3,225 3,225
Total net stockholders' equity 3,567 4,704
Production Data
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- -------------------------
1999 1998 1999 1998
----------- ----------- ---------- ----------
Net production:
Oil (BBL) 5,400 7,500 12,900 35,600
Gas (MCF) 137,000 142,800 412,400 462,700
Average sales prices for period:
Oil (BBL) $ 18.98 $ 11.75 $ 16.27 $ 13.38
Gas (MCF) $ 2.60 $ 2.09 $ 2.25 $ 2.23
4
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
None.
5
SIGNATURE
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.
FORTUNE NATURAL RESOURCES CORPORATION
By: /s/ J. Michael Urban
------------------------------------------
J. Michael Urban
Vice President and Chief Financial Officer
Date: November 2, 1999
6