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): December 30, 2004
PARALLEL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-13305 75-1971716
(Commission file number) (IRS employer identification number)
1004 N. Big Spring, Suite 400, Midland, Texas 79701
(Address of principal executive offices) (Zip code)
(432) 684-3727
(Registrant's telephone number including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
In our Form 8-K Reports filed with the Securities and Exchange
Commission on September 22, 2004 and October 20, 2004, we reported that
Parallel, L.P., a wholly owned subsidiary of Parallel Petroleum Corporation
(collectively, "Parallel"), had entered into purchase and sale agreements with,
and acquired working and net revenue interests in, producing oil and gas
properties from Caprock Oil & Gas, L.P. and Bradley W. Bunn. As reported, all
of the properties are located in Andrews and Gaines Counties, Texas in the
Permian Basin of west Texas.
After Parallel entered into agreements with Caprock Oil & Gas, L.P. and
Bradley W. Bunn to acquire their interests in the properties, Parallel then
offered to purchase all of the remaining working and net revenue interests in
the same properties from all of the other working interest owners. In response
to Parallel's offer, and as further reported in our Form 8-K Report dated
November 30, 2004, Parallel, L.P. entered into separate Purchase and Sale
Agreements on November 30, 2004 with twenty-seven other unaffiliated working
interests owners.
On December 30, 2004 and December 31, 2004, Parallel completed the
acquisition of additional working and net revenue interests under seventeen of
the twenty-seven Purchase and Sale Agreements. Under the seventeen Purchase and
Sale Agreements that were closed on December 30, 2004 and December 31, 2004,
Parallel, L.P. purchased an aggregate additional 13.2% average working interest
and 10.0% average net revenue interest owned by the Sellers. The purchase price
amounts paid by Parallel, L.P. under these seventeen agreements ranged from
$5,548 to $828,397. The total gross purchase price, excluding adjustments, for
all of the additional interests in the properties was $3.49 million. The total
net purchase price, including adjustments, was $2.85 million. The effective date
of these acquisitions is October 1, 2004.
After giving effect to these purchases, Parallel's average working
interest in these properties increased from approximately 56.6% to approximately
69.8%, and its average net revenue interest increased from approximately 43.8%
to approximately 53.8%.
Under these Purchase and Sale Agreements, Parallel acquired
approximately 5,360 gross (707 net) acres and 67 gross (10.3 net) producing
oil and gas wells. The properties consist of 25 oil and gas leases and produce
from the Queen and San Andres formations at depths of approximately 4,200 to
4,900 feet. The additional interests that were acquired under these agreements
represent an estimated 500,000 equivalent barrels of proved oil and gas
reserves, with current production of approximately 50 equivalent barrels of oil
per day.
On December 15, 2004 Parallel entered into the twenty-eighth Purchase
and Sale Agreement with another unaffiliated party which also covers interests
in the same properties. The acquisition transactions contemplated by the eleven
remaining Purchase and Sale Agreements are scheduled to close on or before
January 31, 2005. Completion of the remaining transactions is in each case
subject to customary closing conditions, including the absence of title defects,
environmental review and approval by Parallel, the accuracy of the
representations and warranties of the parties and the absence of any legal
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proceedings affecting the transactions contemplated by each respective Purchase
and Sale Agreement.
Parallel has no relationship with the sellers, other than in respect of
the Purchase and Sale Agreements.
The purchase price was financed with loan proceeds drawn under
Parallel's revolving credit facility provided by First American Bank, SSB, BNP
Paribas, Citibank, F.S.B. and Western National Bank.
The oil and gas properties acquired by Parallel under the Purchase and
Sale Agreements will be pledged as additional collateral to further secure the
payment and performance of Parallel's indebtedness and obligations under its
revolving credit facility.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
----------- -----------------------
10.1 Purchase and Sale Agreement, dated as
of September 21, 2004, between
Parallel, L.P. and Eastland Oil Co.,
which agreement is substantially
identical to the twenty-seven other
purchase and sale agreements entered
into between Parallel, L.P. and the
other sellers parties thereto,
except as described in Schedule A
hereto (Incorporated by reference to
Exhibit 10.1 of the Registrant's
Form 8-K Report dated November 30,
2004 and filed with the Securities
and Exchange Commission on December 6,
2004).
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Schedule A
Parallel, L.P. has entered into twenty-eight separate Purchase and Sale
Agreements with unaffiliated third parties. Incorporated by reference as Exhibit
10.1 to this Current Report on Form 8-K is the Purchase and Sale Agreement
entered into between Parallel, L.P. and Eastland Oil Company. All of the
Purchase and Sale Agreements are substantially identical, except for (1) the
name of each seller, (2) immaterial differences in certain representations,
warranties and exhibits in or to the Purchase and Sale Agreements, (3) the size
of the working interest being sold by each respective seller, (4) the purchase
price payable to each respective seller and (5) the descriptions of the specific
oil and gas leases in which each seller owns an interest.
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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.
Dated: January 4, 2005
PARALLEL PETROLEUM CORPORATION
By: /s/ Larry C. Oldham
---------------------------------
Larry C. Oldham, President
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EXHIBIT INDEX
Exhibit No. Description
----------- --------------------
10.1 Purchase and Sale Agreement, dated as
of September 21, 2004, between
Parallel, L.P. and Eastland Oil Co.,
which agreement is substantially
identical to the twenty-seven other
purchase and sale agreements entered
into between Parallel, L.P. and the
other sellers parties thereto,
except as described in Schedule A
hereto (Incorporated by reference to
Exhibit 10.1 of the Registrant's
Form 8-K Report dated November 30,
2004 and filed with the Securities
and Exchange Commission on December 6,
2004).