UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(AMENDMENT NO.1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
July 15, 1999
Date of Report (Date of Earliest Event Reported)
GLADSTONE ENERGY, INC.
State of Delaware 1-1525 91-0234563
(State or other (Commission File (IRS Employer
Jurisdiction Number) Identification No.)
of Incorporation)
3500 Oak Lawn Avenue
Suite 590, LB 49
Dallas, Texas 75219
(Address of Principal Executive Offices) (Zip Code)
214.528.9710
(Registrant's Telephone Number, Including Area Code)
The undersigned registrant hereby amends the following "Item
7. Financial Statements and Exhibits" of its Current Report on
Form 8-K filed on July 30, 1999, dated July 15, 1999,
to include the following:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired
Unaudited Statement of Operating Revenues and
Direct Operating Expenses for the Right Hand Creek
Properties for the six months ended June 30, 1999.
(b) Pro forma financial information
Pro Forma Combined Condensed Financial Statements
of Gladstone Energy, Inc. for the six months ended
June 30, 1999.
(c) Exhibits
10.1 Purchase and Sale Agreement between Gladstone Energy, Inc.
(formerly known as Gladstone Resources, Inc.) and
Humphrey Oil Interests, L. P. dated July 8, 1999,
previously filed as an exhibit to Gladstone's Form
8-K filed July 30, 1999 and incorporated by reference
herein.
10.2 Credit Agreement between Gladstone Energy, Inc. (formerly
known as Gladstone Resources, Inc.), as borrower, and
Compass Bank, as Lender dated July 15, 1999, previously
filed as an exhibit to Gladstone's Form 8-K filed
July 30, 1999 and incorporated by reference herein.
10.3 Mortgage and Security Agreement from Gladstone Energy, Inc.
(formerly known as Gladstone Resources, Inc.), as
Mortgagee, in favor of Compass Bank as Lender dated
July 15, 1999, previously filed as an exhibit to
Gladstone's Form 8-K filed July 30, 1999 and
incorporated by reference herein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly
authorized.
GLADSTONE ENERGY, INC.
By: /s/ SHEILA IRONS
--------------------------
Sheila Irons
Vice President
Dated September 28, 1999
Item 7(a)
RIGHT HAND CREEK PROPERTIES
STATEMENT OF OPERATING REVENUES
AND DIRECT OPERATING EXPENSES
SIX MONTHS ENDED
JUNE 30, 1999
---------------------
(Unaudited)
Oil and natural gas sales $88,318
Direct operating expenses 30,890
-------
Excess of revenues over direct operating $57,428
expenses =======
See accompanying notes.
RIGHT HAND CREEK PROPERTIES
NOTES TO STATEMENT OF OPERATING REVENUES
AND DIRECT OPERATING EXPENSES
On July 15, 1999, with an effective date of May 1, 1999,
Gladstone acquired from Humphrey Oil Interests, L.P., a Texas
limited partnership ("Humphrey"), certain oil and natural gas
working interests in the Right Hand Creek Field located in Allen
and Beauregard Parishes, Louisiana (collectively, the "Right Hand
Creek Properties"), being 50% of the interest acquired by
Humphrey from EXCO Resources, Inc. ("EXCO") effective May 1,
1999. The aggregate purchase price for the Right Hand Creek
Properties was $349,125. As disclosed in Gladstone's Form 8-K
filed July 30, 1999, the Right Hand Creek Properties include 6
gross productive wells (.735 net productive wells) with current
net production of approximately 55 barrels of oil and no cubic
feet of natural gas per day, and 2 gross (.245 net) non-producing
wells that will require recompletions and/or workovers. The Right
Hand Creek Properties include 725.3 gross (88.85 net) developed
acres and 234.22 gross (28.69 net) undeveloped acres. The
acquisition was funded with a $230,000 draw under a new credit
facility established by Gladstone with Compass Bank, and $119,125
drawn from working capital.
Direct operating expenses include the actual costs of
maintaining the producing properties and their production, but do
not include charges for depletion, depreciation, and
amortization; federal and state income taxes; interest; or
general and administrative expenses. The operating revenues and
direct operating expenses for the period presented may not be
representative of future operations. Presentation of complete
historical financial statements for the two most recent fiscal
years is not practicable because the Right Hand Creek Properties
were not separately accounted for by the entity then owning such
properties; and therefore, such statements are not available.
Revenues in the accompanying statements of operating
revenues and direct operating expenses are recognized on the
sales method. Direct operating expenses are recognized on an
accrual basis.
In management's opinion, the accompanying interim statements
contain all adjustments (consisting solely of normal recurring
accruals) necessary to present fairly the consolidated interest
acquired by Gladstone in the operating revenues and direct
operating expenses of the Right Hand Creek Properties for the six
month period ended June 30, 1999.
The results of operations for the six months ended June 30,
1999 are not necessarily indicative of the results expected for
the full year.
Item 7(b)
GLADSTONE ENERGY, INC.
PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
As discussed in Item 2. Acquisition or Disposition of
Assets, of Gladstone's Form 8-K filed on July 30, 1999, dated
July 15, 1999, Gladstone acquired from Humphrey Oil Interests,
L.P. on July 15, 1999, with an effective date of May 1, 1999,
certain oil and natural gas working interests in the Right Hand
Creek Field located in Allen and Beauregard Parishes, Louisiana
(collectively, the "Right Hand Creek Properties"), being 50% of
the interest acquired by Humphrey Oil Interests, L.P. from EXCO
Resources, Inc. effective May 1, 1999.
The Pro Forma Combined Condensed Balance Sheet as of
June 30, 1999 assumes the acquisition of the Right Hand Creek
Properties had been consummated on that date. The Pro Forma
Combined Condensed Statement of Operations for the six months
ended June 30, 1999 has been prepared assuming the acquisition of
the Right Hand Creek Properties had been consummated on
January 1, 1999.
The pro forma adjustments are based upon available
information and assumptions that management of Gladstone believes
are reasonable. The pro forma combined condensed financial
statement does not purport to represent the financial position or
results of operations of Gladstone which would have occurred had
such transactions been consummated on the dates indicated or
Gladstone's financial position or results of operations for any
future date or period.
GLADSTONE ENERGY, INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
JUNE 30, 1999
(Unaudited)
ASSETS
PRO FORMA
RIGHTHAND ADJUSTMENTS
GLADSTONE CREEK FOR THE PROFOMA
HISTORICAL HISTORICAL ACQUISITION COMBINED
----------- ----------- ------------ -----------
Current assets:
Cash $ 840,322 $ 43,402 $(128,667)(1) $ 755,057
Accounts receivable 42,732 16,892(2) - 59,624
---------- ---------- --------- ----------
Total current assets 883,054 60,294 (128,667) 814,681
---------- ---------- --------- ----------
Net property and equipment 621,476 - 337,625(3) 959,101
Other assets 39,393 - - 39,393
---------- ---------- --------- ----------
$1,543,923 $ 60,294 $ 208,958 $1,813,175
========== =========== ========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable
to bank $ - $ - $ 230,000(4) $ 230,000
Accounts payable
and accrued liabilities 538,220 2,866(5) 10,560(6) 551,646
Working interest owners
drilling prepayments 467,154 - - 467,154
---------- ---------- --------- ----------
Total current liabilities 1,005,374 2,866 240,560 1,248,800
Stockholders' equity:
Common stock 150,000 - - 150,000
Capital in excess of
stated value 1,230,134 - - 1,230,134
Retained earnings
(deficit) (841,585) 57,428 (31,602) (815,759)
---------- ----------- --------- ----------
Total stockholders'
equity 538,549 57,428 (31,602) 564,375
---------- ----------- --------- ----------
$1,543,923 $ 60,294 $ 208,958 $1,813,175
========== =========== ========= ==========
(1) To record the payment of a portion of the consideration
for the Right Hand Creek Properties and loan origination fees.
(2) Net production for June, 1999.
(3) To record the acquisition of the Right Hand Creek
Properties, as adjusted for depletion for six months.
(4) To record the draw under the new credit facility used to
pay a portion of the consideration for the Right Hand
Creek Properties.
(5) Well expenses for June, 1999.
(6) To record interest at $1,760 per month for 6 months on
the note payable to bank under the new credit facility.
GLADSTONE ENERGY, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(Unaudited)
PRO FORMA
RIGHTHAND ADJUSTMENTS
GLADSTONE CREEK FOR THE PROFOMA
HISTORICAL HISTORICAL ACQUISITION COMBINED
----------- ------------ ------------ ----------
Sales:
Gas and Oil, net $ 54,010 $ 88,318 $ - $ 142,328
Other 5,087 - - 5,087
---------- ----------- ---------- ---------
59,097 88,318 - 147,415
Expenses:
Oil and natural gas
production 14,273 30,890 - 45,163
Abandonment costs (5,032) - - (5,032)
Depletion, depreciation and
amortization 23,254 - 21,042(1) 44,296
General and administrative 26,499 - 10,560(2) 37,059
Other expenses 60,275 - - 60,275
---------- ----------- ---------- ---------
119,269 30,890 31,602 181,761
---------- ----------- ---------- ---------
Income (loss) before income
taxes (60,172) 57,428 (31,602) (34,346)
Income taxes (benefit)-
deferred - - - -
---------- ----------- ---------- ---------
Net income (loss)
applicable to common
stock $ (60,172) $ 57,428 $ (31,602) $ (34,346)
========== =========== ========== =========
Basic and diluted earnings
(loss) per share $ (.01) $ .01 $ (.01) $ (.01)
========== =========== ========== =========
(1) Depletion calculated: 5,010 BBL sold of 85,396 BBL Reserves
at a cost of $358,667.
(2) Interest at $1,760 per month for 6 months on the note
payable to bank under the new credit facility.