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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
November 25, 1996
NUEVO ENERGY COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 0-10537 76-0304436
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification Number)
1331 LAMAR, SUITE 1650
HOUSTON, TEXAS 77010
(Address of principal executive offices)
(713) 652-0706
(Registrant's telephone number, including area code)
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Item 5. Other Information
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
The unaudited pro forma condensed consolidated financial information reflects
the following:
. The acquisition of the Unocal Properties by Nuevo during April 1996 was for
a net adjusted purchase price of $503.1 million in cash (including $22.5
million of acquisition costs) plus a contingent payment pursuant to a purchase
agreement dated February 16, 1996. The Unocal Properties are located in
central, coastal and offshore California. The cash purchase price was
financed through proceeds, net of offering costs, of $136.8 million and $155.6
million related to Nuevo's issuances of common stock and 9.5% senior
subordinated notes (the Notes) during April 1996, respectively, the incurrence
of $199.1 million of bank debt, the issuance of 150,000 common stock warrants
with a fair value of $1.6 million and a $10.0 million non-interest-bearing
payable to Torch Energy Advisors Incorporated (Torch). The contingent payment
is not included in the cash purchase price.
. The contingent payment requires a cash payment to the seller in the years
1998 through 2004 if crude oil prices exceed certain escalating threshold
prices. Although the contingent payment is not effective until 1998, if it
had been in effect as of January 1, 1995, the impact on the unaudited pro
forma condensed consolidated financial information would have been a reduction
in income of $500,000 ($300,000 net of tax) and $10.8 million ($6.4 million
net of tax) during the year ended December 31, 1995 and the nine-month period
ended September 30, 1996, respectively.
. The acquisition of the Point Pedernales Properties from Torch was for a net
adjusted price of $35.7 million in common stock pursuant to a letter agreement
dated February 16, 1996, less a receivable of $1.3 million for a revenue
earnout on oil production which was acquired from Unocal and Torch in
conjunction with the acquisitions of the Unocal and Point Pedernales
Properties. The purchase price represents Torch's net book value of the
properties; the Point Pedernales Properties are primarily located offshore
California.
. The acquisition of the East Texas Properties during July 1996 was from a
major independent oil company. The net adjusted purchase price was $9.3
million and was financed through the incurrence of bank debt.
These acquisitions are presented using the purchase method of accounting.
Nuevo, along with a third party, acquired all of the capital stock of Amoco
Congo Petroleum Company and Amoco Congo Exploration Company (collectively, the
Congo Companies) on February 24, 1995. Through an interpurchaser agreement,
Nuevo and the third party have agreed to share the combined net operating
revenues and expenses of the Congo Companies evenly. The results of operations
related to Nuevo's share of the Congo Companies is reflected in the unaudited
pro forma statement of operations for the period January 1, 1995 through
January 31, 1995. Nuevo's share of the results of operations of the Congo
Companies for the period February 1, 1995 through December 31, 1995 and the
nine-month period ended September 30, 1996 is reflected in the respective
historical statements of operations.
The unaudited pro forma condensed consolidated balance sheet as of December 31,
1995 gives effect to the acquisition of the Unocal Properties, the Point
Pedernales Properties and the East Texas Properties as if such events had
occurred on December 31, 1995. The unaudited pro forma condensed consolidated
statements of operations for the year ended December 31, 1995 and for the nine-
month period ended September 30, 1996 give effect to the acquisition of the
Unocal Properties, the Point Pedernales Properties, the East Texas Properties
and the Congo Companies by Nuevo as if such events had occurred at January 1,
1995. Appropriate interim financial amounts have been added to and subtracted
from the audited revenues and direct operating expenses of the Unocal Properties
and the Point Pedernales Properties to reflect the historical revenues and
direct operating expenses of the properties for the year ended
December 31, 1995.
The following unaudited pro forma information has been included by the rules of
the Securities and Exchange Commission and is provided for comparative purposes
only. The unaudited pro forma information presented is based upon the
historical consolidated financial statements of Nuevo, the historical revenues
and direct operating expenses of the Unocal Properties and the Point Pedernales
Properties, and it should be read in conjunction with such financial statements
and the related notes thereto. The unaudited pro forma information related to
the East Texas Properties and the Congo Companies is based upon unaudited
historical financial information.
The pro forma data are based on assumptions and include adjustments as explained
in the notes to the unaudited pro forma condensed consolidated financial
statements. The unaudited pro forma data are not necessarily indicative of the
financial results that would have occurred had the transactions been effective
on and as of the dates referred to above and should not be viewed as indicative
of operations in future periods.
NUEVO ENERGY COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET--UNAUDITED
DECEMBER 31, 1995
(IN THOUSANDS)
California Properties
Nuevo --------------------------- East
Energy Point Texas Pro
ASSETS: Company Unocal Pedernales Properties Forma
----------- ----------- ---------- ----------- -------
Current Assets:
Cash and cash equivalents $ 5,765 $ 5,765
Accounts and other receivables 21,195 $1,302 (b) 22,497
Other 2,760 2,760
--------- ------------ -------- ---------- --------
Total current assets 29,720 1,302 31,022
--------- ------------ -------- ---------- --------
Oil and gas properties (full cost method) 460,800 438,243 (a) 34,422 (b) 9,310 (c) 942,775
Other property and equipment 76,631 16,590 (a) 93,221
Land and buildings 0 50,000 (a) 50,000
--------- ------------ -------- ---------- --------
537,431 504,833 34,422 9,310 1,085,996
Accumulated depreciation, depletion and
amortization (269,989) (269,989)
--------- ------------ -------- ---------- --------
267,442 504,833 34,422 9,310 816,007
Other 9,382 7,144 (a) 16,526
--------- ------------ -------- ---------- --------
Total assets $ 306,544 $ 511,977 $ 35,724 $ 9,310 $ 863,555
========= ============ ======== ========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable and accrued liabilities $ 10,286 $ 10,000 (a) $ 20,286
Current maturities of long-term debt 3,677 3,677
--------- ------------ -------- ---------- --------
Total current liabilities 13,963 10,000 0 0 23,963
--------- ------------ -------- ---------- --------
Long-term debt 113,032 361,799 (a) 9,310 (c) 484,141
Other noncurrent liabilities 12,015 12,015
Deferred income taxes 12,926 1,779 (a) 49 (b) 14,754
Stockholders' equity 154,608 138,399 (a) 35,675 (b) 328,682
--------- ------------ -------- ---------- --------
Total liabilities and stockholders' equity $ 306,544 $ 511,977 $ 35,724 $ 9,310 $863,555
========= ============ ======== ========== ========
NUEVO ENERGY COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS--UNAUDITED
YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
California Properties
Nuevo ----------------------- East
Energy Point Texas Congo Conforming Pro
Company Unocal Pedernal Properties Companies Adjustments Forma
-------- ----------- ---------- ---------- ---------- ----------- --------
Revenues:
Oil and gas revenues $103,216 $173,124 $30,347 $ 8,158 $ 2,167 $ 2,154 (d) $ 319,166
Other revenues 35,511 49 35,560
--------- -------- ------- ------- ------- -------- ---------
Total revenues 138,727 173,124 30,347 8,158 2,216 2,154 354,726
--------- -------- ------- ------- ------- -------- ---------
Costs and expenses:
Lease operating costs 29,634 88,220 14,417 2,255 488 (17,807) (e) 117,207
Other operating expense 27,393 27,393
General and administrative expense 10,165 339 12,539 (f) 23,043
Depreciation, depletion and
amortization 41,866 87 58,574 (g) 100,527
Interest expense 15,389 30,903 (h) 46,292
Other 61 61
--------- -------- ------- ------- ------- -------- ---------
Total costs and expenses 124,508 88,220 14,417 2,255 914 84,209 314,523
--------- -------- ------- ------- ------- -------- ---------
Income before income tax expense 14,219 84,904 15,930 5,903 1,302 (82,055) 40,203
Income tax expense 5,209 11,073 (i) 16,282
--------- -------- ------- ------- ------- -------- ---------
Net income 9,010 84,904 15,930 5,903 1,302 (93,128) 23,921
Dividends on preferred stock 1,472 1,472
--------- -------- ------- ------- ------- -------- ---------
Net income attributable to
common stockholders $ 7,538 $ 84,904 $15,930 $ 5,903 $ 1,302 ($93,128) $ 22,449
========= ======== ======= ======= ======= ======== =========
Weighted average common shares 11,355 6,384 ( j) 17,739
========= ======== =========
Earnings per common share $0.66 $ 1.27
========= =========
NUEVO ENERGY COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPREATIONS--UNAUDITED
NINE MONTHS ENDED SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
California Properties
Nuevo -------------------------- East
Energy Point Texas Conforming Pro
Company Unocal Pedernales Properties Adjustments Forma
-------- ---------- ---------- ---------- ---------------- --------
Revenues:
Oil and gas revenues $188,364 $44,643 $ 5,779 $ 4,907 $ 507 (d) $ 244,200
Other revenues 30,487 30,487
--------- -------- --------- ------- --------- ---------
Total revenues 218,851 44,643 5,779 4,907 507 274,687
--------- -------- --------- ------- --------- ---------
Costs and expenses:
Lease operating costs 66,463 19,887 2,634 1,590 (4,404) (e) 86,170
Other operating expense 24,544 24,544
General and administrative expense 14,941 2,758 (f) 17,699
Depreciation, depletion and
amortization 54,495 15,129 (g) 69,624
Interest expense 25,825 7,726 (h) 33,551
Other 13 13
--------- -------- --------- ------- --------- ---------
Total costs and expenses 186,281 19,887 2,634 1,590 21,209 231,601
--------- -------- --------- ------- --------- ---------
Income before income tax expense 32,570 24,756 3,145 3,317 (20,702) 43,086
Income tax expense 13,173 4,277 (i) 17,450
--------- -------- --------- ------- --------- ---------
Net income 19,397 24,756 3,145 3,317 (24,979) 25,636
Dividends on preferred stock 766 766
--------- -------- --------- ------- --------- ---------
Net income attributable to
common stockholders $ 18,631 $24,756 $ 3,145 $ 3,317 ($24,979) $ 24,870
========= ======== ========= ======= ========= =========
Weighted average common shares 16,662 2,493 (j) 19,155
========= ========= =========
Earnings per common share $1.12 $ 1.30
========= =========
NUEVO ENERGY COMPANY
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENT
Pro forma adjustments to record the closing of the acquisitions of the Unocal
Properties, the Point Pedernales Properties and the East Texas Properties are
summarized below:
(a) To record the purchase of the Unocal Properties, the related financing and
the impact of the acquisition on deferred taxes as follows (in thousands):
The adjusted cost of the Unocal Properties was calculated as follows:
Purchase Price $ 492,000
Purchase price adjustments, including net revenues from the
acquired properties from the effective date to the closing
date of April 1996 ( 11,413)
--------
480,587
Acquisition fees (Torch and third parties, $10 million and
$7.6 million, respectively):
Payable to Torch 10,000
Cash and Warrants 7,575
Legal and other acquisition costs 4,892
---------
Total purchase price $ 503,054
=========
Purchase allocation:
Land and buildings $ 50,000
Gas plants 15,000
Other property and equipment 1,590
Acquisition costs allocated to oil and gas properties 438,243
Deferred income taxes ( 1,779)
---------
Total purchase allocation $ 503,054
=========
Acquisition of the Unocal Properties was financed through net proceeds
of $136.8 million from a common stock offering, net proceeds of $155.6
million from the Notes offering (net of issuance costs of $4.4 million),
the incurrence of $199.1 million of long-term bank financing (net of
financing costs of $2.7 million), the issuance of 150,000 common stock
warrants with a fair value of $1.6 million and a non-interest-bearing
payable to Torch of $10 million.
Deferred income taxes represent the adjustment to historical deferred
income taxes due to the impact of California state income taxes.
(b) To record the purchase of the Point Pedernales Properties as follows (in
thousands):
Purchase price $ 42,000
Purchase price adjustments, including net revenues from the
acquired properties from the effective date to the closing
date of April 1996 ( 6,325)
--------
Total purchase price $ 35,675
========
Purchase allocation:
Oil and gas properties $ 34,422
Revenue earnout receivable 1,302
Deferred income taxes (49)
--------
Total purchase price $ 35,675
========
The acquisition of the Point Pedernales Properties were paid for by
the issuance of 1.28 million shares of common stock at $28 per share. The
purchase price approximates Torch's net historical book value for such
properties. The revenue earnout receivable represents the additional oil
revenues acquired from Unocal and Torch for production from the Point
Pedernales Properties from the effective date to the closing date.
(c) To record the purchase of the East Texas Properties and the related
financing as follows:
The adjusted cost of the East Texas Properties was calculated as
follows (in thousands):
Purchase price $ 13,200
Purchase price adjustments, including net revenues from the
acquired properties from the effective date to the closing
date of July 1996 ( 3,890)
-------
Total purchase price $ 9,310
=======
The acquisition of the East Texas Properties was financed through the
incurrence of $9.3 million of long-term bank financing.
(d) To record additional revenues related to the earnout acquired from Unocal
and Torch on oil production from the Point Pedernales Properties.
(e) To eliminate $12.7 million of salary costs for the year ended December 31,
1995 of personnel directly related to the operations of the Unocal
properties that were replaced by individuals under an administrative
agreement with Torch (the Torch Agreement), $2 million of gas
transportation costs related to a gas swap contract with Texaco, $2
million of housing and transportation charges for operating personnel that
will be eliminated under the Torch Agreement and $1.1 million of
operator's overhead on the Point Pedernales properties that will be
reimbursed under the Torch Agreement.
(f) To adjust general and administrative expenses and management fees to give
effect to the increase in management fees payable to Torch due to the
acquisition of the Unocal Properties, the Point Pedernales Properties and
the East Texas properties. Administrative overhead and direct general and
administrative expenses will increase $5.9 million and $1.5 million on an
annual basis and quarterly basis, respectively. Pursuant to the terms of
the Torch Agreement, pro forma management fees for the year ended December
31, 1995 and the nine-month period ended September 30, 1996 were $6.6
million and $1.3 million, respectively.
(g) To adjust depreciation, depletion and amortization to give effect to the
acquisition of the Unocal Properties, the Point Pedernales Properties and
the East Texas Properties under the full cost method of accounting and to
adjust the historical depletion on the Congo Properties for the month
ended January 31, 1995. The Unocal, Point Pedernales and East Texas
Properties are all located in the United States full cost center.
(h) To adjust interest expense to give effect to the portion of the
acquisition of the Unocal Properties and East Texas Properties financed
under the bank debt and through the issuance of the Notes.
The pro forma interest expense related to the Notes was $15.2 million
and $3.8 million for the year ended December 31, 1995 and the nine-month
period ended September 30, 1996, respectively, with an annual interest
rate of 9.5%. The pro forma interest expense related to the bank debt
was $14.7 million and $3.7 million for the year ended December 31, 1995
and the nine-month period ended September 30, 1996, respectively, with an
average annual interest rate of the London Interbank Offered Rate plus 1%
(6.97%).
Nuevo also obtained a commitment for a bridge loan facility in
conjunction with the purchase of the Unocal Properties. However, the
financing of the acquisition of such properties did not require the use of
proceeds from the bridge loan facility. Although Nuevo incurred bridge
loan financing fees, such fees represent nonrecurring expenses directly
related to the financing of the Unocal purchase transaction and are
excluded from the pro forma presentation. Such costs were expensed in the
1996 statement of operations and were $1.7 million ($1.0 million, net of
tax).
Amortization of deferred debt financing costs for the Notes is
estimated to be $440,000 and $110,000 during the year ended December 31,
1995 and the nine-month period ended September 30, 1996 and amortization
of the deferred debt financing costs for the bank debt is estimated to be
$549,000 and $138,000 during the respective periods. The repayment terms
of the Notes and the bank debt are ten years and five years, respectively.
(i) To adjust federal and state income taxes for the acquisition of the
Unocal, Point Pedernales and East Texas Properties at an effective rate of
40.5% due to the impact of California state income taxes.
(j) To increase the weighted average common shares outstanding for 6.38
million shares of common stock issued in connection with the acquisition
of the Unocal Properties and the Point Pedernales Properties during April
1996.