SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K / A1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 13, 1997 (April 1, 1997)
-----------------------------
VINTAGE PETROLEUM, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-10578 73-1182669
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
4200 One Williams Center, Tulsa, Oklahoma 74172
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (918) 592-0101
--------------
Not applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events.
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Under its Credit Agreement dated August 29, 1996, as amended (the
"Credit Agreement") certain banks have provided to the Registrant an
unsecured revolving credit facility. The current borrowing base under
the Credit Agreement of $385 million exceeds the $375 million facility
amount and is determined by the banks' evaluation of the Registrant's
U.S. and certain Argentina oil and gas reserves. The unused portion of
the revolving credit facility was approximately $193 million at June 10,
1997.
Item 7. Financial Statements and Exhibits.
---------------------------------
(a) Financial statements of business acquired.
BURLINGTON PROPERTIES:
Report of Independent Accountants
Historical Statements of Revenues and Direct Operating Expenses
for the year ended December 31, 1996, and the three months ended
March 31, 1997
Notes to Historical Statements of Revenues and Direct Operating
Expenses
(b) Pro forma financial information.
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES:
Pro Forma Combined Statement of Income for the year ended
December 31, 1996 (Unaudited)
Pro Forma Combined Statement of Income for the three months ended
March 31, 1997 (Unaudited)
Pro Forma Combined Balance Sheet at March 31, 1997 (Unaudited)
Notes to Pro Forma Combined Financial Statements (Unaudited)
-2-
(c) Exhibits.
The following is a list of all exhibits filed as a part of this
Form 8-K.
2.* Purchase and Sale Agreement dated as of February 12, 1997,
among the Registrant, Burlington Resources Oil & Gas Company
and Glacier Park Company, and amendments thereto dated
March 11, 1997, and March 20, 1997.
23.1** Consent of Coopers & Lybrand L.L.P.
23.2** Consent of Netherland, Sewell & Associates, Inc.
_____________________________
* Previously filed with this Form 8-K on April 16, 1997.
** Filed herewith.
-3-
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.
VINTAGE PETROLEUM, INC.
By: /s/ Michael F. Meimerstorf
--------------------------
Michael F. Meimerstorf
Vice President and Controller
Date: June 13, 1997
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Vintage Petroleum, Inc.
We have audited the accompanying historical statement of revenues and direct
operating expenses of the Burlington Properties, as described in Note 1, for the
year ended December 31, 1996. This financial statement is the responsibility of
management of Vintage Petroleum, Inc. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
statement of revenues and direct operating expenses. We believe that our audit
provides a reasonable basis for our opinion.
The accompanying historical statement of revenues and direct operating expenses
for the year ended December 31, 1996, reflects the revenues and direct operating
expenses attributable to the Burlington Properties, as described in Note 1, and
is not intended to be a complete financial presentation of the results of
operations of the Burlington Properties.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenues and direct operating expenses of the
Burlington Properties, as described in Note 1, for the year ended December 31,
1996, in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Fort Worth, Texas
May 29, 1997
-5-
BURLINGTON PROPERTIES
HISTORICAL STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1996
AND THE THREE MONTHS ENDED MARCH 31, 1997
(IN THOUSANDS)
Three Months
Year Ended Ended
December 31, March 31,
1996 1997
----------------------------
(Unaudited)
OIL AND GAS REVENUES $64,060 $14,718
DIRECT OPERATING EXPENSES 25,083 5,554
------- -------
REVENUES IN EXCESS OF
DIRECT OPERATING EXPENSES $38,977 $ 9,164
======= =======
The accompanying notes are an integral part of these statements.
-6-
BURLINGTON PROPERTIES
NOTES TO HISTORICAL STATEMENTS OF REVENUES
AND DIRECT OPERATING EXPENSES
(1) GENERAL
BASIS OF PRESENTATION
On April 1, 1997, Vintage Petroleum, Inc. ("Vintage") acquired certain
oil and gas properties located in the Gulf Coast of Texas and Louisiana (the
"Burlington Properties") for approximately $101.4 million, in cash from
Burlington Resources Oil & Gas Company, Glacier Park Company and Burlington
Resources Offshore Inc., subsidiaries of Burlington Resources Inc.
(collectively, "Burlington"). The accompanying statements of revenues and direct
operating expenses for the year ended December 31, 1996, and the three months
ended March 31, 1997, do not include general and administrative expenses,
interest income or expense, a provision for depreciation, depletion and
amortization, or any provision for income taxes because the property interests
acquired represent only a portion of Burlington's business and the costs
incurred by Burlington are not necessarily indicative of the costs to be
incurred by Vintage. The accompanying financial statements were derived from the
historical accounting records of Burlington and represent Vintage's interest in
the acquired properties. Management believes that all material adjustments
(consisting of only normal recurring adjustments) necessary for a fair
presentation have been made.
Historical financial information reflecting financial position, results
of operations and cash flows of the Burlington Properties are not presented
because the entire acquisition cost was assigned to the oil and gas property
interests. Accordingly, the statements of revenues and direct operating expenses
have been presented in lieu of the financial statements required under Rule 3-05
of the Securities and Exchange Commission Regulation S-X.
REVENUE RECOGNITION
Revenues are recognized when oil and gas production is sold. Direct
operating expenses are accrued when services are provided.
USE OF ESTIMATES
Management has made a number of estimates and assumptions relating to
the reporting of the revenues and direct operating expenses to prepare these
financial statements. Actual results could differ from those estimates.
-7-
BURLINGTON PROPERTIES
NOTES TO HISTORICAL STATEMENTS OF REVENUES
AND DIRECT OPERATING EXPENSES (CONTINUED)
(2) SUPPLEMENTARY FINANCIAL INFORMATION FOR OIL AND GAS PRODUCING ACTIVITIES
(UNAUDITED)
ESTIMATED QUANTITIES OF PROVED OIL AND GAS RESERVES
Reserve information presented below is based on a report prepared by
Netherland, Sewell & Associates, Inc., independent petroleum consultants for
Vintage, using prices, adjusted for fixed and determinable escalations, and
costs in effect at December 31, 1996. Reserve estimates for December 31, 1995,
were derived by adjusting the 1996 year-end quantities for historical
production.
Proved reserves are estimated quantities of crude oil, natural gas and
natural gas liquids which geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known reservoirs
under existing economic and operating conditions. Proved developed reserves are
those which are expected to be recovered through existing wells with existing
equipment and operating methods. Below are the net quantities of proved
reserves and proved developed reserves for the Burlington Properties:
Oil Gas
(MBbls) (MMcf)
------- ------
Proved reserves at December 31, 1995.. 30,628 37,043
Production............................ (2,168) (8,890)
------ ------
Proved reserves at December 31, 1996.. 28,460 28,153
====== ======
Proved developed reserves at:
December 31, 1995.................. 23,555 36,894
====== ======
December 31, 1996.................. 21,387 28,004
====== ======
STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS RELATING TO PROVED
OIL AND GAS RESERVES
The "Standardized Measure of Discounted Future Net Cash Flows Relating to
Proved Oil and Gas Reserves" ("Standardized Measure") is a disclosure
requirement under Statement of Financial Accounting Standards No. 69. The
Standardized Measure does not purport to present the fair market value of the
proved oil and gas reserves. This would require consideration of expected
future economic and operating conditions, which are not taken into account in
calculating the Standardized Measure.
-8-
BURLINGTON PROPERTIES
NOTES TO HISTORICAL STATEMENTS OF REVENUES
AND DIRECT OPERATING EXPENSES (CONTINUED)
(2) SUPPLEMENTARY FINANCIAL INFORMATION FOR OIL AND GAS PRODUCING ACTIVITIES
(UNAUDITED) (CONTINUED)
Under the Standardized Measure, future cash inflows were estimated by
applying December 31, 1996 prices, adjusted for fixed and determinable
escalations, to the estimated future production of proved reserves. Future cash
inflows were reduced by estimated future production, development and abandonment
costs based on year-end costs to determine pre-tax cash inflows. Future net cash
inflows were discounted using a 10% annual discount rate to arrive at the
Standardized Measure. Future income tax estimates are not included, as the
historical tax basis of the properties is not relevant. The following
Standardized Measure and changes in the Standardized Measure are based on the
December 31, 1996 reserve estimate performed by Netherland, Sewell & Associates,
Inc.
Set forth below is the Standardized Measure (before income taxes) relating
to proved oil and gas reserves of the Burlington Properties at December 31,
1996:
1996
-----------
(In thousands)
Future cash inflows....................................... $783,787
Future production, development and abandonment costs...... 399,224
--------
Future net cash inflows................................... 384,563
10% annual discount for estimated timing of cash flows.... 154,781
--------
Standardized Measure of discounted future net cash flows.. $229,782
========
The following is an analysis of the changes in the Standardized Measure
(before income taxes) of the Burlington Properties during 1996:
1996
-----------
(In thousands)
Standardized Measure - Beginning of year................... $244,326
Increases (decreases):
Sales, net of production costs.......................... (38,977)
Accretion of discount................................... 24,433
--------
Standardized Measure - End of year......................... $229,782
========
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VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
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VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Historical
--------------------------- Company
Company Burlington Pro Forma Pro Forma
Consolidated Properties Adjustments Combined
-------------- ---------- ----------- ------------
(Note 1) (Note 2) (Note 3)
Revenues:
Oil and gas sales $258,368 $64,060 $ - $322,428
Oil and gas gathering 20,508 - - 20,508
Gas marketing 31,920 - - 31,920
Other income 886 - - 886
-------- ------- ---------- --------
311,682 64,060 - 375,742
-------- ------- ---------- --------
Costs and expenses:
Lease operating, including
production taxes 91,916 25,083 (920) (a) 116,079
Oil and gas gathering 16,985 - - 16,985
Gas marketing 29,537 - - 29,537
General and administrative 16,441 - 1,200 (b) 17,641
Depreciation, depletion and amortization 70,057 - 14,308 (c) 84,365
Interest 30,109 - 6,765 (d) 36,874
-------- ------- -------- --------
255,045 25,083 21,353 301,481
-------- ------- -------- --------
Income before income taxes
and minority interest 56,637 38,977 (21,353) 74,261
Provision for income taxes 14,938 - 6,856 (e) 21,794
Minority interest in income
of subsidiary (507) - - (507)
-------- ------- -------- --------
Net income $ 41,192 $38,977 $(28,209) $ 51,960
======== ======= ======== ========
Earnings per share $1.68 $2.12
======== ========
Weighted average common
shares outstanding 24,537 24,537
======== ========
See notes to pro forma combined financial statements
-11-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Historical
------------------------- Company
Company Burlington Pro Forma Pro Forma
Consolidated Properties Adjustments Combined
------------ ---------- ----------- ---------
(Note 1) (Note 2) (Note 3)
Revenues:
Oil and gas sales $83,997 $14,718 $ - $ 98,715
Oil and gas gathering 4,847 - - 4,847
Gas marketing 10,271 - - 10,271
Other income 119 - - 119
------- ------- --------- --------
99,234 14,718 - 113,952
------- ------- --------- --------
Costs and expenses:
Lease operating, including
production taxes 24,514 5,554 (230) (a) 29,838
Oil and gas gathering 4,324 - - 4,324
Gas marketing 9,852 - - 9,852
General and administrative 4,391 - 300 (b) 4,691
Depreciation, depletion and amortization 20,000 - 2,932 (c) 22,932
Interest 8,178 - 1,663 (d) 9,841
------- ------- -------- ---------
71,259 5,554 4,665 81,478
------- ------- -------- --------
Income before income taxes
and minority interest 27,975 9,164 (4,665) 32,474
Provision for income taxes 6,869 - 1,750 (e) 8,619
Minority interest in income
of subsidiary (117) - - (117)
------- ------- ------- --------
Net income $20,989 $ 9,164 $(6,415) $ 23,738
======= ======= ======= ========
Earnings per share $.82 $.92
======= ========
Weighted average common
shares outstanding 25,699 25,699
======= ========
See notes to pro forma combined financial statements
-12-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
PRO FORMA COMBINED BALANCE SHEET
MARCH 31, 1997
(IN THOUSANDS)
(UNAUDITED)
ASSETS
Historical Company
Company Burlington Pro Forma
Consolidated Properties Combined
------------ ---------- ---------
(Note 1) (Note 2)
CURRENT ASSETS:
Cash and cash equivalents $ 3,858 $ - $ 3,858
Accounts receivable -
Oil and gas sales 48,412 - 48,412
Joint operations 5,024 - 5,024
Other current assets 10,020 - 10,020
---------- ---------- ----------
Total current assets 67,314 - 67,314
---------- ---------- ----------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Oil and gas properties, full-cost method 1,003,438 101,381 1,104,819
Oil and gas gathering systems 13,348 - 13,348
Other 8,737 - 8,737
---------- -------- ----------
1,025,523 101,381 1,126,904
Less - accumulated depreciation,
depletion and amortization 295,392 - 295,392
---------- -------- ----------
730,131 101,381 831,512
---------- -------- ----------
OTHER ASSETS, net 32,121 (11,410) 20,711
---------- -------- ----------
$ 829,566 $ 89,971 $ 919,537
========== ======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revenue payable $ 21,470 $ - $ 21,470
Accounts payable 19,518 - 19,518
Accrued liabilities 24,214 - 24,214
Current portion of long-term debt 5,328 - 5,328
---------- -------- ----------
Total current liabilities 70,530 - 70,530
---------- -------- ----------
LONG-TERM DEBT, less current portion above 357,156 89,971 447,127
---------- -------- ----------
DEFERRED INCOME TAXES 62,722 - 62,722
---------- -------- ----------
OTHER LONG-TERM LIABILITIES 3,124 - 3,124
---------- -------- ----------
MINORITY INTEREST IN SUBSIDIARY 1,945 - 1,945
---------- -------- ----------
STOCKHOLDERS' EQUITY:
Common stock 129 - 129
Capital in excess of par value 201,078 - 201,078
Retained earnings 132,882 - 132,882
---------- -------- ----------
334,089 - 334,089
---------- -------- ----------
$ 829,566 $ 89,971 $ 919,537
========== ======== ==========
See notes to pro forma combined financial statements
-13-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
The pro forma combined statements of income for the year ended December 31,
1996, and the three months ended March 31, 1997, have been prepared assuming the
Company consummated the acquisition of the Burlington Properties (as defined
below) on January 1, 1996, with funds provided by advances under the Company's
revolving credit facility. The pro forma combined balance sheet of the Company
at March 31, 1997, has been prepared assuming the Company consummated the
acquisition of the Burlington Properties on March 31, 1997, with funds provided
by advances under the Company's revolving credit facility.
The Historical Company Consolidated results of operations for the year
ended December 31, 1996, are derived from the Company's 1996 audited financial
statements. The Historical Company Consolidated results of operations for the
three months ended March 31, 1997, are derived from the unaudited consolidated
financial statements of the Company.
The pro forma adjustments are based upon available information and certain
assumptions that management of the Company believes are reasonable. The pro
forma combined financial statements do not purport to represent what the
Company's financial position or results of operations actually would have been
had such transactions in fact occurred on the dates indicated or to project the
Company's financial position or results of operations for any future date or
period. These pro forma combined financial statements and the notes thereto
should be read in conjunction with the Company's 1996 audited consolidated
financial statements and the notes thereto.
(2) ACQUISITION OF BURLINGTON PROPERTIES
On April 1, 1997, the Company acquired certain oil and gas properties
located in the Gulf Coast of Texas and Louisiana (the "Burlington Properties")
for approximately $101.4 million in cash, after (a) adjustments for estimated
revenues and expenses associated with such properties from January 1, 1997,
through March 31, 1997, and (b) certain other adjustments. The funds used for
this acquisition were obtained through advances under the Company's revolving
credit facility. As of March 31, 1997, approximately $11.4 million of the
purchase price had been paid to Burlington and is included in other assets on
the Company's historical balance sheet. The historical results of operations of
the Burlington Properties for the year ended December 31, 1996, are based on the
audited statement of revenues and direct operating expenses for the Burlington
Properties. The historical results of operations of the Burlington Properties
for the three months ended March 31, 1997, are based on the unaudited statement
of revenues and direct operating expenses.
-14-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (CONTINUED)
(3) PRO FORMA ADJUSTMENTS
The following describe the adjustments made to reflect the foregoing
transaction as of the dates indicated above:
(a) The pro forma lease operating expenses have been adjusted to reflect the
estimated reduction in lease operating expenses on the Burlington
Properties that would have resulted had the Company operated such
properties during such period. The Company estimates that certain costs of
personnel and certain other costs incurred by the sellers in their
operation of the properties would have been significantly reduced had such
properties been operated by the Company due to a reduction in personnel and
different operating methods being utilized by the Company. The lower lease
operating expenses as estimated by the Company are consistent with the
Company's actual costs incurred in similar operations.
(b) The pro forma general and administrative expenses have been adjusted to
reflect the estimated increase in administrative personnel as a result of
the acquisition of the Burlington Properties.
(c) The pro forma depreciation, depletion and amortization expense has been
adjusted by computing the Company's pro forma cost of proved oil and gas
properties subject to amortization and estimated future costs to develop
such properties, pro forma production and pro forma proved reserves, giving
effect to the purchase of the Burlington Properties and comparing such
computation with historical amounts. The Company's U.S. pro forma
depreciation, depletion and amortization per equivalent barrel of oil is
$3.81 for the year ended December 31, 1996, and $3.92 for the three months
ended March 31, 1997.
(d) The pro forma interest expense has been adjusted to reflect the additional
interest resulting from the purchase of the Burlington Properties as of
January 1, 1996, with funds provided by advances under the Company's
revolving credit facility.
(e) The pro forma provision for income taxes has been adjusted to reflect the
Company's U.S. statutory income tax rate of 38.9 percent.
-15-
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
2.* Purchase and Sale Agreement dated as of February 12, 1997, among the
Registrant, Burlington Resources Oil & Gas Company and Glacier Park
Company, and amendments thereto dated March 11, 1997, and March 20,
1997.
23.1** Consent of Coopers & Lybrand L.L.P.
23.2** Consent of Netherland, Sewell & Associates, Inc.
________________________________________
* Previously filed with this Form 8-K on April 16, 1997.
** Filed herewith.