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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): July 30, 1999
SOUTHERN MINERAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
NEVADA 0-8043 36-2068676
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
1201 LOUISIANA STREET, SUITE 3350 77002-5609
Houston, Texas (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (713) 658-9444
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 30, 1999, the Registrant sold its Brushy Creek and Texan Gardens
Fields to ANR Production Company for $15.9 million in cash.
The foregoing summary is qualified in its entirety by (i) the terms and
conditions of the sale of the Registrant's Brushy Creek Field and Texan Gardens
Field interest to ANR Production Company as more fully described in the Purchase
and Sale Agreement, dated July 9, 1999, by and between the Registrant and ANR
Production Company, copy of which is included as Exhibit 10.34 to the
Registrant's Form S-4 (Commission File No. 333-83345) and is incorporated herein
by this reference and (ii) the Registrant's press release, dated August 2, 1999,
a copy of which is included as Exhibit 99.1 to Form 8-K filed on July 27, 1999
and is incorporated herein by this reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Acquired Business. Not applicable.
(b) Pro Forma Financial Information. The pro forma financial statements
required pursuant to Article 11 of Regulation S-X in connection with the
July 30, 1999 sale of the Company's interest in the Brushy Creek Field and
Texan Gardens Field to ANR Production Co.
INDEX TO PRO FORMA FINANCIAL STATEMENTS
Page
Number
------
Unaudited Pro Forma Consolidated Statement of Operations
for the Three Months Ended March 31,
1999.............................................................. 3
Unaudited Pro Forma Consolidated Statement of Operations
for the Year Ended December 31, 1998.............................. 4
Unaudited Pro Forma Consolidated Balance Sheet as of
March 31, 1999.................................................... 5
Notes to Unaudited Pro Forma Consolidated Financial
Statements........................................................ 6
(c) Exhibits. - None
SOUTHERN MINERAL CORPORATION
GIVING EFFECT TO THE PROPERTY SALES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999
(in thousands, except per share data)
Sale of
Consolidated Property Pro Forma
Historical Adjustments Consolidated
------------ ----------- ------------
Revenues
Oil and gas................................................. $ 5,621 $ (467)(a) $ 5,154
Gains on sales of properties and other assets............... 5,073 -- 5,073
------- ------ -------
10,694 (467) 10,227
Expenses
Production.................................................. 2,081 (106)(a) 1,975
Exploration................................................. 47 -- 47
Depreciation, depletion and amortization.................... 3,081 (149)(a) 2,932
General and administrative.................................. 1,040 -- 1,040
Impairment of proved oil and gas properties................. -- -- --
------- ------ -------
6,249 (255) 5,994
------- ------ -------
Income from operations............................................. 4,445 (212) 4,233
Other income, expenses and deductions..............................
Interest and other income....................................... 27 -- 27
Interest and debt expense....................................... (1,774) 299(a) (1,475)
------- ------ -------
Income before income taxes......................................... 2,698 87 2,785
Provision for income tax benefit................................... (230) -- (230)
------- ------ -------
Net income......................................................... $ 2,928 $ 87 $ 3,015
======= ====== =======
Net income per share - basic....................................... $ 0.23 $ 0.24
======= =======
Net income per share - diluted..................................... $ 0.16 $ 0.17
======= =======
Weighted average number of shares
outstanding - basic............................................ 12,800 12,800
======= =======
Weighted average number of shares
outstanding - diluted.......................................... 17,812 17,812
======= =======
See accompanying notes to the unaudited pro forma consolidated financial statements.
3
SOUTHERN MINERAL CORPORATION
GIVING EFFECT TO THE PROPERTY SALES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998
(in thousands, except per share data)
Sale of
Consolidated Property Pro Forma
Historical Adjustments Consolidated
----------- ----------- ------------
Revenues
Oil and gas................................................. $ 21,722 $(1,867)(a) $ 19,855
Gains on sales of properties and other assets............... (250) -- (250)
-------- ------- --------
21,472 (1,867) 19,605
Expenses
Production.................................................. 8,518 (407)(a) 8,111
Exploration................................................. 3,635 -- 3,635
Depreciation, depletion and amortization.................... 10,505 (393)(a) 10,112
General and administrative.................................. 3,622 -- 3,622
Impairment of proved oil and gas properties................. 9,344 -- 9,344
-------- ------- --------
35,624 (800) 34,824
-------- ------- --------
Loss from operations........................................... (14,152) (1,067) (15,219)
Other income, expenses and deductions..........................
Interest and other income................................... 330 -- 330
Interest and debt expense................................... (5,362) 1,254(a) (4,108)
-------- ------- --------
Loss before income taxes....................................... (19,184) 187 (18,997)
Provision for income tax benefit............................... (2,775) -- (2,775)
-------- ------- --------
Net loss....................................................... $(16,409) $ 187 $(16,222)
======== ======= ========
Net loss per share - basic and diluted......................... $ (1.32) $ (1.31)
======== ========
Weighted average number of shares outstanding-
basic and diluted.......................................... 12,422 12,422
======== ========
See accompanying notes to the unaudited pro forma consolidated financial statements.
4
SOUTHERN MINERAL CORPORATION
GIVING EFFECT TO THE PROPERTY SALES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1999
(in thousands)
Consolidated Sale of Property Pro Forma
Historical Adjustments Consolidated
---------- ----------- ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents............................ $ 677 $ 545(a) $ 1,222
Receivables.......................................... 4,810 -- 4,810
Other................................................ 680 -- 680
-------- ------- --------
Total current assets.......................... 6,167 545 6,712
PROPERTY AND EQUIPMENT, AT COST USING
SUCCESSFUL EFFORTS METHOD FOR OIL AND GAS
ACTIVITIES
Oil and gas producing properties....................... 138,339 (9,588)(a) 128,751
Unproven properties.................................... 3,673 -- 3,673
Office equipment....................................... 547 -- 547
Accumulated, depreciation, depletion and
amortization....................................... (30,149) 747(a) (29,402)
-------- ------- --------
112,410 (8,841) 103,569
PROPERTIES HELD FOR SALE AND OTHER.......................... 6,543 -- 6,543
-------- ------- --------
Total assets.................................. $125,120 $ (8,296) $116,824
======== ======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable..................................... $ 7,455 $ -- $ 7,455
Canadian bank loan................................... 18,590 -- 18,590
Current portion of long-term debt.................... 13,169 (4,235) 8,934
-------- ------- --------
Total current liabilities..................... 39,214 (4,235) 34,979
LONG - TERM DEBT (LESS CURRENT PORTION)..................... 60,273 (11,200)(A) 49,073
DEFERRED INCOME TAXES....................................... 7,204 -- 7,204
STOCKHOLDERS' EQUITY
Preferred stock...................................... -- -- --
Common stock......................................... 129 -- 129
Additional paid-in capital........................... 30,852 -- 30,852
Accumulated other comprehensive loss................. (1,535) -- (1,535)
Retained deficit .................................... (10,965) 7,139(a) (3,826)
Less: Treasury stock................................ (52) -- (52)
-------- ------- --------
Total stockholders' equity.................... 18,429 7,139 25,568
-------- ------- --------
Total liabilities and stockholders' equity.... $125,120 $ (8,296) $116,824
======== ======== ========
See accompanying notes to the unaudited pro forma consolidated financial statements.
5
SOUTHERN MINERAL CORPORATION
GIVING EFFECT TO THE PROPERTY SALES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except share data)
Note 1 - Basis of Presentation
The unaudited pro forma consolidated financial statements give effect to:
(1) the sale of the Brushy Creek Field and Texan Gardens Field interests to
ANR for $15,980.
(2) the use of proceeds from the sale of Brushy Creek Field and Texan
Gardens Field interests.
These unaudited pro forma consolidated financial statements are not
necessarily indicative of the results which would have actually been obtained
had all the transactions referred to above occurred on such dates. They should
be read in conjunction with the consolidated financial statements and related
notes contained in the Quarterly Report on Form 10-Q for the period ended March
31, 1999 and the Annual Report on Form 10-K/A for the year ended December 31,
1998.
The unaudited pro forma consolidated financial information has been prepared
in accordance with published guidelines of the SEC regarding pro forma financial
information. Neither KPMG LLP, our independent auditors, nor any other
independent accountant or financial advisor, examined or performed any
procedures with respect to the unaudited pro forma consolidated financial
information, and they (1) express no opinion or any other form of assurances
with respect to such information and (2) assume no responsibility for, and
disclaim any association with, the unaudited pro forma consolidated financial
information.
Note 2 - Adjustments
The unaudited pro forma consolidated balance sheet presents the consolidated
balance sheet of Southern Mineral as if the above transactions were consummated
on March 31, 1999. The unaudited pro forma consolidated statements of operations
present the consolidated statements of operations of Southern Mineral for the
three-months ended March 31, 1999 and the year ended December 31, 1998, as if
the above transactions had occurred on January 1, 1998. The unaudited pro forma
consolidated statements of operations detail the elimination of revenues and
costs related to sale and disposal of the Brushy Creek Field and Texan Gardens
Field interests and the reduction in interest expense attributable to the sale
of the Brushy Creek Field and Texan Gardens Field interests.
SOUTHERN MINERAL CORPORATION
GIVING EFFECT TO THE PROPERTY SALES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except share data)
(a) Cash consideration received from ANR for the sale of Brushy Creek Field and Texan
Gardens Field interests......................................................................... $ 15,980
Payment of debt................................................................................... (15,435)
--------
Cash retained by Southern Mineral................................................................. $ 545
========
Book value of properties sold..................................................................... $ (9,588)
--------
Accumulated depreciation, depletion and amortization of properties sold........................... $ 747
--------
Payment of current portion of long-term debt...................................................... $ (4,235)
--------
Payment of long-term debt......................................................................... $(11,200)
--------
Gain on sale of Brushy Creek Field and Texan Gardens Field interests, as follows:
Cash consideration received from the ANR.......................................................... $ 15,980
Book value of properties sold..................................................................... $ (9,588)
Accumulated depreciation, depletion and amortization of properties sold........................... $ 747
--------
Gain on sale properties........................................................................... $ 7,139
========
Elimination of revenues related to properties sold for the year ended December 31, 1998........... $ (467)
--------
Elimination of production expenses related to properties sold for the year ended
December 31, 1998............................................................................... $ (407)
--------
Elimination of depreciation, depletion and amortization related to properties sold for the year
ended December 31, 1998......................................................................... $ (393)
--------
Reduction in historical interest expense relating to the payment of debt for the year ended
December 31, 1998............................................................................... $ 1,254
--------
Elimination of revenues related to properties sold for the three-months ended
March 31, 1999................................................................................... $ (467)
--------
Elimination of production expenses related to properties sold for the three-months ended
March 31, 1999................................................................................... $ (106)
--------
Elimination of depreciation, depletion and amortization related to properties sold for the
three - months ended March 31, 1999............................................................. $ (149)
--------
Reduction in historical interest expense relating to the payment of debt for three - months
ended March 31, 1999............................................................................ $ 299
--------
(b) No adjustments for provision for income tax effects, as any current tax effect is offset by the change in the deferred
tax asset valuation allowance recorded by Southern Mineral.
7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SOUTHERN MINERAL CORPORATION
Date: May 15, 2000 By: /s/ MICHAEL E. LUTTRELL
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Michael E. Luttrell
Vice President-Finance and
Chief Financial Officer