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 12, 1997
TITAN EXPLORATION, INC.
(Exact name of registrant as specified in is charter)
Delaware 000-21843 75-2671582
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
500 West Texas, Suite 500, Midland, Texas 79701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(915) 682-6612
Item 2. Acquisition or Disposition of Assets.
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(a) ACQUISITION OF OFFSHORE ENERGY DEVELOPMENT CORPORATION
On December 12, 1997, Titan Offshore, Inc. ("Titan Offshore"), a Delaware
corporation and a wholly-owned subsidiary of Titan Exploration, Inc. ("Titan"),
a Delaware corporation, merged (the "OEDC Merger") with and into Offshore Energy
Development Corporation ("OEDC"), a Delaware corporation, pursuant to the terms
of the Amended and Restated Agreement and Plan of Merger dated November 6, 1997
(the "OEDC Merger Agreement") among Titan, Titan Offshore and OEDC. The OEDC
Merger was consummated by filing with the Secretary of State of Delaware on
December 12, 1997 a certificate of merger under the General Corporation Law of
the State of Delaware, which certificate of merger specified that the effective
time of the merger was 11:59 p.m., Eastern Time.
Pursuant to the OEDC Merger Agreement and as a result of the OEDC Merger:
(i) the separate corporate existence of Titan Offshore ceased, and all of the
properties, rights, privileges, powers and franchises of Titan Offshore vested
in OEDC, which is the surviving corporation in the OEDC Merger, and all of the
debts, liabilities and duties of Titan Offshore attached to OEDC; and (ii) each
share of Common Stock of OEDC, par value $.01 per share ("OEDC Common Stock"),
outstanding immediately prior to the effective time of the OEDC Merger was
converted into the right to receive 0.630 shares of Common Stock of Titan, par
value $.01 per share ("Titan Common Stock"). The exchange ratio was determined
pursuant to arms'-length negotiations between Titan and OEDC.
Pursuant to the OEDC Merger Agreement, Titan will issue in exchange for
shares of OEDC Common Stock up to approximately 5,482,187 shares of Titan Common
Stock (plus cash in lieu of fractional shares).
As of September 30, 1997, Natural Gas Partners, L.P. ("NGP") owned
4,767,407 shares (14.0%) of the outstanding Titan Common Stock and 2,209,460
shares (25.4%) of the outstanding OEDC Common Stock. R. Gamble Baldwin, a
director of OEDC, is the general partner of G.F.W. Energy, L.P. ("GFW"), the
general partner of NGP. David R. Albin, a director of Titan and OEDC, and
Kenneth A. Hersh, a director of Titan, own limited partnership interests in GFW.
Messrs. Albin, Baldwin and Hersh are three of the four managing members of the
general partner of Natural Gas Partners II, L.P. ("NGP II") and also own limited
partnership interests in NGP II's general partner. As of September 30, 1997,
NGP II owned 5,000,777 shares (14.7%) of the outstanding Titan Common Stock. In
addition to the shares of Titan Common Stock and OEDC Common Stock owned by NGP,
as of September 30, 1997, Mr. Baldwin directly owned 9,100 shares and 35,041 of
Titan Common Stock and OEDC Common Stock, respectively. Messrs. Albin and
Hersh, who disclaim beneficial ownership of Titan Common Stock owned by NGP II,
beneficially owned 115,772 shares and 67,381 shares, respectively, of Titan
Common Stock and 52,596 shares and 49,012 shares, respectively, of OEDC Common
Stock. Although OEDC
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informed Messrs. Albin and Baldwin from time to time on a limited basis of the
general status of negotiations with Titan and, likewise, Titan informed Mr.
Hersh of the general status of negotiations with OEDC, none of these individuals
participated in such negotiations or the deliberations of the Board of either
company in reviewing and approving the OEDC Merger.
OEDC is an energy company that focuses on the acquisition, exploration,
development and production of natural gas and on natural gas gathering and
marketing activities. Pursuant to the OEDC Merger, Titan acquired proved
reserves as of December 31, 1996 of 5.5 million barrels of oil equivalent.
For additional information regarding the OEDC Merger, see the sections
captioned: (i) "The Merger -- Effects of the Merger," (ii) "The Merger --
Interests of Certain Persons in the Merger," and (iii) "Certain Provisions of
the Merger Agreement -- Conversion of Shares; Procedure for Exchange of
Certificates; Fractional Shares," which appear on pages 25-26, 37-38, and 43-44,
respectively, of the Joint Proxy Statement/Prospectus of Titan dated November
14, 1997 (the "Joint Proxy Statement/Prospectus"), and which sections are
incorporated herein by reference.
(b) ACQUISITION OF PROPERTIES FROM PIONEER NATURAL RESOURCES COMPANY
On December 16, 1997, Titan completed the acquisition (the "Pioneer
Acquisition") of certain oil and gas producing properties from Pioneer Natural
Resources USA, Inc., a wholly-owned subsidiary of Pioneer Natural Resources
Company ("Pioneer"). The properties, 87% of which were operated by Pioneer, are
located in 46 fields in the Permian Basin of West Texas and Southeastern New
Mexico and currently produce approximately 2,500 barrels of oil equivalent per
day. Of the reserves, 81% are oil. Pursuant to the terms and conditions of the
acquisition agreement, Titan will pay approximately $54.4 million for the
properties. Titan was one of several companies submitting bids for the
properties. As of September 30, 1997, NGP II owned an approximate 6.0% limited
partnership interest in DNR-MESA Holdings, L.P. ("DNR"), a Texas limited
partnership that currently owns approximately 15.3% of the outstanding common
stock of Pioneer. Natural Gas Partners III, L.P., a fund that is under common
management with NGP II and in which Messrs. Albin, Baldwin and Hersh own
indirect partnership interests, also owns an approximate 8% limited partnership
in DNR. Mr. Hersh, a director of Titan, is also a director of Pioneer and
currently owns 4,480 shares of the Common Stock of Pioneer. Mr. Hersh did not
participate in any of the negotiations of the terms of the Acquisition Agreement
between Titan and Pioneer or in any of the deliberations of the Boards of either
Titan or Pioneer concerning the acquisition.
Item 5. Other Events.
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On December 12, 1997, Titan Bayou Bengal Holdings, Inc. ("Titan Sub"), a
Delaware corporation and a wholly-owned subsidiary of Titan, merged (the
"Carrollton Merger") with and
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into Carrollton Resources, L.L.C. ("Carrollton"), a Louisiana limited liability
company, pursuant to the terms of the Agreement and Plan of Merger dated
November 4, 1997 (the "Carrollton Merger Agreement") among Titan, Titan Sub and
Carrollton. The Carrollton Merger was consummated by filing with the Secretary
of State of Louisiana on December 12, 1997 a certificate of merger under the
Louisiana Limited Liability Company Act, which certificate of merger specified
that the effective time of the merger was 11:59 p.m., local time.
Pursuant to the Carrollton Merger Agreement and as a result of the
Carrollton Merger: (i) the separate corporate existence of Titan Sub ceased, and
all of the properties, rights, privileges, powers and franchises of Titan Sub
vested in Carrollton, which is the surviving entity in the Merger, and all of
the debts, liabilities and duties of Titan Sub attached to Carrollton; and (ii)
each membership unit of Carrollton ("Carrollton Units"), outstanding immediately
prior to the effective time of the Carrollton Merger was converted into the
right to receive .54997910 shares of Titan Common Stock. The exchange ratio was
determined pursuant to arms'-length negotiations between Titan and Carrollton.
Pursuant to the Carrollton Merger Agreement, Titan will issue in exchange
for Carrollton Membership Units up to approximately 900,000 shares of Titan
Common Stock (plus cash in lieu of fractional shares).
NGP-Louisiana Partners, L.P. ("NGP-Louisiana"), an affiliate of NGP, owns
39.7207% of Carrollton's outstanding membership units. NGP is the sole limited
partner of NGP-Louisiana, and owns a 95.07% economic interest in NGP-Louisiana.
The corporation serves as the general partner and owns the remaining 4.93% of
NGP-Louisiana. Messrs. Albin, Baldwin and Hersh collectively own a majority of
the common stock of the corporate general partner. These individuals were only
informed from time to time on a limited basis of the general status of
negotiations between Titan and Carrollton and did not participate in
negotiations of the terms of the acquisition agreement or in the deliberations
concerning the agreement of the Titan Board or the Carrollton management
committee.
Carrollton is an energy company that focuses on the exploration,
development and acquisition of onshore oil and gas properties located primarily
in the Gulf Coast region. Pursuant to the Carrollton Merger, Titan acquired
proved reserves as of June 30, 1997 of 2.8 million barrels of oil equivalent.
Item 7. Financial Statements and Exhibits.
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(a) Financial Statements of Businesses Acquired.
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The financial statements relating to the OEDC Merger required by this
item of Form 8-K have been previously reported (within the meaning thereof as
defined in Rule 12b-2)
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by Titan in the Joint Proxy Statement/Prospectus and are accordingly not
included herein in reliance on General Instruction B.3 to Form 8-K.
It is impracticable to provide at this time the financial statements
relating to the Pioneer Acquisition required by this item of Form 8-K. Pursuant
to Rule 7(a)(4) of Form 8-K, such financial statements will be filed as soon as
they are available and on or before March 1, 1998.
(b) Pro Forma Financial Information.
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The pro forma financial information relating to the OEDC Merger
required by this item of Form 8-K has been previously reported (within the
meaning thereof as defined in Rule 12b-2) by Titan in the Joint Proxy
Statement/Prospectus and is accordingly not included herein in reliance on
General Instruction B.3 to Form 8-K.
It is impracticable to provide at this time the pro forma financial
information relating to the Pioneer Acquisition required by this item of Form 8-
K. Pursuant to Rule 7(b)(4) of Form 8-K, such financial statements will be
filed as soon as they are available and on or before March 1, 1998.
(c) Exhibits.
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Exhibit 2.1 - Amended and Restated Agreement and Plan of Merger
dated November 6, 1997 among Titan, Titan Offshore
and OEDC (filed as Appendix I to the Joint Proxy
Statement/Prospectus and incorporated herein by
reference).
Exhibit 2.2 - Agreement and Plan of Merger dated November 4, 1997
among Titan, Titan Sub and Carrollton (filed as
Exhibit 2.3 to Titan's Registration Statement on
Form S-4, Registration No. 333-40215, and
incorporated herein by reference).
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Exhibit 99.1 - Sections captioned (i) "The Merger -- Effects of the
Merger," (ii) "The Merger -- Interests of Certain
Persons in the Merger," and (iii) "Certain
Provisions of the Merger Agreement -- Conversion of
Shares; Procedure for Exchange of Certificates;
Fractional Shares," which appear on pages 25-26, 37-
38, and 43-44, respectively, of the Joint Proxy
Statement/Prospectus.
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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.
Date: December 23, 1997 TITAN EXPLORATION, INC.
By: /s/ Jack Hightower
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Jack Hightower, President and
Chief Executive Officer
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INDEX TO EXHIBITS
Exhibit
Number Exhibit
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2.1 - Amended and Restated Agreement and Plan of Merger dated
November 6, 1997 among Titan, Titan Offshore and OEDC
(filed as Appendix I to the Joint Proxy
Statement/Prospectus and incorporated herein by
reference).
2.2 - Agreement and Plan of Merger dated November 4, 1997
among Titan, Titan Sub and Carrollton (filed as Exhibit
2.3 to Titan's Registration Statement on Form S-4,
Registration No. 333-40215, and incorporated herein by
reference).
99.1 - Sections captioned (i) "The Merger --Effects of the
Merger," (ii) "The Merger -- Interests of Certain
Persons in the Merger," and (iii) "Certain Provisions of
the Merger Agreement --Conversion of Shares; Procedure
for Exchange of Certificates; Fractional Shares," which
appear on pages 25-26, 37-38, and 43-44, respectively,
of the Joint Proxy Statement/Prospectus.