SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Commission
Date of Report (Date of earliest event reported)
June 1, 1998
HOWELL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-8704 74-1223027
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1111 Fannin, Suite 1500, Houston, Texas 77002
(Address of principal office) (Zip Code)
Registrant's telephone number, including area code: (713) 658-4000
Item 5. Other Events.
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On June 1, 1998, Howell Petroleum Corporation (the "Buyer"), a wholly
owned subsidiary of Howell Corporation (the "Company"), amended its existing
credit facility with Bank of Montreal (as amended, the "Credit Facility"),
which had been entered into in December 1997 in connection with Howell's
acquisition (the "Acquisition") of certain oil and gas properties from Amoco
Production Company. For information with respect to the Acquisition,
reference is made to the Company's Current Report on Form 8-K dated December
17, 1997, as amended by Form 8-K/A filed March 3, 1998 and Form 8-K/A filed
June 5, 1998.
The Credit Facility comprises two tranches. Tranche A is a
$130,000,000 five-year revolving credit facility with a current borrowing
base of $110,000,000 which is subject to semi-annual borrowing base
redeterminations based on the Company's oil and natural gas properties. The
Company is required to pay commitment fees on the unused portion of Tranche A
at a rate of .25% per annum, if 50% or less of the borrowing base is used, or
.30% per annum, if more than 50% of the borrowing base is used. The lesser
of $5,000,000 or available credit under Tranche A may also be used for
letters of credit on the Company's behalf. Tranche B is a $30,000,000 single
pay term loan facility that was used to finance the Acquisition, and which is
due May 30, 1999. The Credit Facility contains an overall limitation on
total loans under the facility to $150,000,000.
Outstanding amounts under the Credit Facility bear interest, at the
Company's option, at either (i) the higher of the federal funds rate plus .5%
or Bank of Montreal's prime rate, plus, in either case, the applicable margin
or (ii) LIBOR plus the applicable margin.
The Credit Facility is currently unsecured. The Credit Facility
contains customary affirmative and negative covenants, including limitations
on the ability of the Company to incur additional debt, sell assets, merge or
consolidate with other persons or pay dividends on its capital stock in
excess of historical levels and a prohibition on change of control or
management. In addition, the Company must raise at least $50 million in
equity or subordinated debt by May 30, 1999 and, if Tranche B is not repaid
by December 1, 1998, grant a first lien on the oil and natural gas properties
of the Buyer representing 80% of the value thereof as reflected in the
applicable reserve reports. The Credit Facility requires the Company to
maintain, at each quarter end, tangible net worth of at least $40,000,000
plus (i) 75% of the proceeds received by the Company from equity capital
offerings after December 1997, and (ii) 75% of the Company's consolidated net
income for each fiscal year (or quarter, for each quarter test) in which net
income is positive beginning with the year ended December 31, 1998. In
addition, the Credit Facility requires the Company to maintain a ratio of
current assets plus Tranche A borrowing capacity to current liabilities of at
least 1.0 to 1.0 and an interest coverage ratio of not less than 2.0 to 1.0
until the end of 1998 and 2.5 to 1.0 thereafter.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
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99.1 Credit Agreement dated December 17, 1997 between Howell
Petroleum Corporation and Bank of Montreal. (Incorporated
by reference to Exhibit 99.1 to the Registrant's Current
Report on Form 8-K dated December 17, 1997, as amended by
Form 8-K/A filed March 3, 1998 and Form 8-K/A filed June 5,
1998.)
99.2 Guaranty Agreement dated December 17, 1997 between Howell
Corporation and Bank of Montreal. (Incorporated by
reference to Exhibit 99.1 to the Registrant's Current
Report on Form 8-K dated December 17, 1997, as amended by
Form 8-K/A filed March 3, 1998 and Form 8-K/A filed June 5,
1998.)
99.3 First Amendment to Credit Agreement dated June 1, 1998
between Howell Petroleum Corporation and Bank of Montreal
and Ratification by Howell Corporation. (filed herewith)
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.
HOWELL CORPORATION
Date: June 12, 1998 By: /s/ ROBERT T. MOFFETT
Robert T. Moffett
Vice President
EXHIBIT INDEX
Exhibit
Number Description
99.1 Credit Agreement dated December 17, 1997 between Howell
Petroleum Corporation and Bank of Montreal. (Incorporated by
reference to Exhibit 99.1 to the Registrant's Current Report on
Form 8-K dated December 17, 1997, as amended by Form 8-K/A filed
March 3, 1998 and Form 8-K/A filed June 5, 1998.)
99.2 Guaranty Agreement dated December 17, 1997 between Howell
Corporation and Bank of Montreal. (Incorporated by reference to
Exhibit 99.1 to the Registrant's Current Report on Form 8-K dated
December 17, 1997, as amended by Form 8-K/A filed March 3, 1998
and Form 8-K/A filed June 5, 1998.)
99.3 First Amendment to Credit Agreement dated June 1, 1998
between Howell Petroleum Corporation and Bank of Montreal and
Ratification by Howell Corporation. (filed herewith)