AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 7, 2004
REGISTRATION NUMBER 333-116240
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE MERIDIAN RESOURCE CORPORATION
and Co-Registrants (see Table of Co-Registrants below)
(Exact name of registrant as specified in its charter)
<Table>
TEXAS 76-0319553
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</Table>
1401 ENCLAVE PARKWAY, SUITE 300
HOUSTON, TEXAS 77077
(281) 597-7000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
MR. JOSEPH A. REEVES, JR.
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
THE MERIDIAN RESOURCE CORPORATION
1401 ENCLAVE PARKWAY, SUITE 300
HOUSTON, TEXAS 77077
(281) 597-7000
(Name, address, including zip code, and telephone number including area code, of
agent for service)
Copies to:
CHARLES L. STRAUSS
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
(713) 651-5151
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement becomes effective, subject to market
conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
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If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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TABLE OF CO-REGISTRANTS
<Table>
<Caption>
EXACT NAME OF REGISTRANT STATE OR OTHER JURISDICTION OF PRIMARY STANDARD INDUSTRIAL I.R.S. EMPLOYER
AS SPECIFIED IN ITS CHARTER INCORPORATION OR ORGANIZATION CLASSIFICATION CODE NUMBER IDENTIFICATION NUMBER
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The Meridian Resource Corporation...... Delaware 6199 76-0424671
Cairn Energy USA, Inc.................. Delaware 1311 23-2169839
The Meridian Resource & Exploration
LLC.................................. Delaware 1311 76-0348919
Louisiana Onshore Properties LLC....... Delaware 1311 76-0548803
</Table>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SEC IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS
NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JULY 7, 2004
PROSPECTUS
(MERIDIAN RESOURCE CORP. LOGO)
$350,000,000
DEBT SECURITIES, PREFERRED STOCK AND COMMON STOCK
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SUBSIDIARY GUARANTORS
(AS DEFINED HEREIN)
GUARANTEES OF DEBT SECURITIES
This prospectus relates to the following securities of The Meridian
Resource Corporation (the "Securities"):
- debt securities, which may be senior or subordinated debt securities (the
Subsidiary Guarantors may from time to time fully and unconditionally
guarantee the debt securities);
- preferred stock; and
- common stock.
We will provide the specific terms of the Securities in supplements to this
prospectus. This prospectus may not be used to sell Securities unless it is
accompanied by a prospectus supplement.
Our common stock is listed on the New York Stock Exchange (the "NYSE")
under the trading symbol "TMR". Any common stock sold pursuant to a prospectus
supplement will be listed on that exchange, subject to official notice of
issuance. On July 2, 2004 the last reported sales price for our common stock was
$7.02 per share.
Our address is 1401 Enclave Parkway, Suite 300, Houston, Texas, 77077, and
our telephone number is (281)597-7000.
YOU SHOULD CAREFULLY REVIEW AND CONSIDER THE INFORMATION UNDER THE HEADING
"RISK FACTORS" BEGINNING ON PAGE 2 OF THIS PROSPECTUS AND UNDER THE SAME HEADING
IN THE APPLICABLE PROSPECTUS SUPPLEMENT BEFORE INVESTING IN THE SECURITIES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
, 2004
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
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ABOUT THIS PROSPECTUS....................................... i
ABOUT THE MERIDIAN RESOURCE CORPORATION..................... 1
THE SUBSIDIARY GUARANTORS................................... 1
RISK FACTORS................................................ 2
FORWARD-LOOKING STATEMENTS.................................. 7
USE OF PROCEEDS............................................. 8
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS..................... 8
DESCRIPTION OF DEBT SECURITIES.............................. 9
DESCRIPTION OF COMMON AND PREFERRED STOCK OF MERIDIAN....... 17
PLAN OF DISTRIBUTION........................................ 20
LEGAL MATTERS............................................... 21
EXPERTS..................................................... 21
RESERVE ENGINEERS........................................... 21
WHERE YOU CAN FIND MORE INFORMATION......................... 22
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............. 22
</Table>
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with
the Securities and Exchange Commission using a "shelf" registration process.
Under the shelf registration process, we may offer any combination of the
Securities described in this prospectus in one or more offerings with a total
initial offering price of up to $350,000,000 as we may designate in prospectus
supplements. We will offer the Securities described in this prospectus in one or
more offerings with an aggregate offering price of up to $350,000,000.
This prospectus provides you with a general description of the debt
securities, preferred stock and common stock that we may offer. When we use this
prospectus to offer Securities, we will provide a prospectus supplement that
will contain specific information about the terms of that offering. The
prospectus supplement may add, update or change the information contained in
this prospectus.
We may offer the Securities in amounts, at prices, and on terms determined
at the time of offering. We may sell the Securities directly to you or through
underwriters we select. If we use underwriters to sell the Securities, we will
name them and describe their compensation in a prospectus supplement.
Please carefully read this prospectus and the prospectus supplement
together with the additional information described under the heading "Where You
Can Find More Information".
i
ABOUT THE MERIDIAN RESOURCE CORPORATION
We are an independent oil and natural gas company that explores for,
acquires and develops oil and natural gas properties utilizing 3-D seismic
technology. Our operations are focused on the onshore oil and gas regions in
south Louisiana, the Texas Gulf Coast and offshore in the Gulf of Mexico. As of
December 31, 2003, we had proved reserves of approximately 146 Bcfe with a
present value of future net cash flows before income taxes of approximately $507
million. Approximately 68% of our proved reserves were natural gas and
approximately 77% were classified as proved developed.
We believe we are among the leaders in the use of 3-D seismic technology by
independent oil and natural gas companies. We also believe we have a competitive
advantage in the areas where we operate because of our large inventory of lease
acreage, seismic data coverage and experienced geotechnical, land and
operational staff.
Historically, our experienced technical team has internally generated the
majority of our exploration projects. In addition, we generally serve as the
operator through all phases of drilling, completing and producing our
exploration and development projects. During the course of the prior eleven
years, we have generated and participated in the discovery of approximately 800
Bcfe of new reserves. Recently, we have developed several shallower, low-risk
exploration projects that we believe provide us with a higher level of
confidence for success as well as better control of risks and costs than the
deep exploration plays we have traditionally developed and drilled. Examples of
this strategy include our Thornwell and Biloxi Marshlands fields. While this
strategy has proven to be successful and will be the focus of our efforts to
develop new oil and gas reserves in our producing region, it does not replace
entirely our continued efforts to explore for deep reserves where the
probability of success and the level of costs justify the risks associated with
such opportunities.
As of December 31, 2003, we had interests in leases and options to lease
acreage in approximately 280,000 gross acres in Louisiana, Texas and the Gulf of
Mexico. We also had rights or access to approximately 7,800 square miles of 3-D
seismic data, which we believe to be one of the largest positions held by a
company of our size operating in our core areas of operation.
The Meridian Resource Corporation was incorporated in Texas in 1990, with
headquarters located at 1401 Enclave Parkway, Suite 300, Houston, Texas 77077.
THE SUBSIDIARY GUARANTORS
The Subsidiary Guarantors are The Meridian Resource & Exploration LLC, The
Meridian Resource Corporation (Delaware), Louisiana Onshore Properties LLC and
Cairn Energy USA, Inc. Each or all Subsidiary Guarantors may jointly and
severally guarantee our payment obligations under any series of debt securities
offered by this prospectus, as set forth in a related prospectus supplement.
1
RISK FACTORS
In addition to the information contained in this prospectus, in the
prospectus supplements, and in the documents incorporated by reference into this
prospectus, you should carefully consider the following information before
making an investment decision. If any of the following risks actually occur, our
financial condition and our results of operations could be materially and
adversely affected. Additional risks and uncertainties not presently known to us
may also impair our business operations.
This prospectus also contains forward-looking statements that involve risks
and uncertainties. Our actual results may differ from those anticipated in these
forward-looking statements as a result of both the risks described below and
factors described elsewhere in this prospectus. You should read the section
below entitled "Forward-Looking Statements" for further discussion of these
matters.
RISKS RELATED TO OUR DEBT
OUR HIGH LEVEL OF INDEBTEDNESS MAY ADVERSELY AFFECT OPERATIONS AND LIMIT OUR
GROWTH.
As of March 31, 2004, we had long-term indebtedness of approximately $127.0
million (including approximately $10.0 million of current maturities of
long-term indebtedness) compared to approximately $216.1 million of
stockholders' equity, and we had a working capital deficit of approximately
$14.1 million (including approximately $10.0 million of current maturities of
long-term indebtedness). If we are unable to generate sufficient cash flows from
operations in the future to service our debt, we may need to refinance all or a
portion of our existing debt or to obtain additional financing. Such refinancing
or additional financing may not be possible. Our ability to meet our debt
service obligations and to reduce our total indebtedness will depend on our
future performance and our ability to maintain or increase cash flows from our
operations. These outcomes are subject to general economic conditions and to
financial, business and other factors affecting our operations, many of which we
do not control, including the prevailing market prices for oil and natural gas.
Our business may not continue to generate cash flows at or above current levels.
BORROWING LIMITS UNDER OUR CREDIT FACILITY ARE SUBJECT TO REDETERMINATION.
As of May 31, 2004, we have outstanding indebtedness of $117.0 million
under our revolving credit facility, which is only $10.5 million less than the
current limit to our borrowings under that facility. The borrowing base under
that facility is subject to quarterly redeterminations by our lenders. Our
borrowing base is determined primarily by our oil and gas reserve amounts. Our
lenders can redetermine the borrowing base to a lower level than the current
borrowing base if they determine that our oil and gas reserves at the time of
redetermination are inadequate to support the borrowing base then in effect. In
the event our then-redetermined borrowing base is less than our outstanding
borrowings under the facility, we will be required to repay the deficit over a
90-day period. If we are required to repay debt under our credit facility as a
result of a downward borrowing base redetermination, we may not be able to
obtain alternate borrowing sources at commercially reasonable rates.
OUR LENDERS IMPOSE RESTRICTIONS ON US THAT LIMIT OUR ABILITY TO CONDUCT
BUSINESS AND COULD ADVERSELY AFFECT OPERATIONS.
Our credit facility contains restrictive covenants. The restrictive
covenants impose significant operating and financial restraints that could
impair our ability to obtain future financing, to make capital expenditures, to
pay dividends, to engage in mergers or acquisitions, to withstand future
downturns in our business or in the general economy or to otherwise conduct
necessary corporate activities. Furthermore, we have pledged substantially all
of our oil and natural gas properties and the stock of all of our principal
operating subsidiaries as collateral for the indebtedness under our credit
facility. If we are in material default of our obligations under that credit
facility, the lenders are entitled to liens on additional oil and natural gas
properties. This pledge of collateral to our credit facility lenders could
impair our ability to obtain additional financing on favorable terms.
2
A default under a restrictive covenant could result in a lender
accelerating the payment of all borrowed funds, together with accrued and unpaid
interest. We may not be able to remit such an accelerated payment or to access
sufficient funds from alternative sources to remit any such payment. Even if we
could obtain additional financing, the terms of that financing may not be
favorable or acceptable to us.
RISKS OF OUR BUSINESS
THE OIL AND NATURAL GAS MARKET IS VOLATILE AND EXPOSES US TO FINANCIAL RISKS.
Our profitability, cash flow and the carrying value of our oil and gas
properties are highly dependent on the market prices of oil and natural gas.
Historically, the oil and natural gas markets have proven cyclical and volatile
as a result of factors that are beyond our control. These factors include
changes in tax laws, the level of consumer product demand, weather conditions,
the price and availability of alternative fuels, the price and level of imports
and exports of oil and natural gas, worldwide economic, political and regulatory
conditions, and action taken by the Organization of Petroleum Exporting
Countries.
Any significant decline in oil and natural gas prices or any other
unfavorable market conditions could have a material adverse effect on our
financial condition and on the carrying value of our proved reserves.
Consequently, we may not be able to generate sufficient cash flows from
operations to meet our obligations and to make planned capital expenditures.
Price declines may also affect the measure of discounted future net cash flows
of our reserves, a result that could adversely impact the borrowing base under
our credit facility and may increase the likelihood that we will incur
additional impairment charges on our oil and natural gas properties for
financial accounting purposes.
OUR HEDGING TRANSACTIONS MAY NOT ADEQUATELY PREVENT LOSSES.
We cannot predict future oil and natural gas prices with certainty. To
manage our exposure to the risks inherent in such a volatile market, from time
to time, we have entered into commodities futures, swap or option contracts to
hedge a portion of our oil and natural gas production against market price
changes. Hedging transactions are intended to limit the negative effect of
further price declines, but may also prevent us from realizing the benefits of
price increases above the levels reflected in the hedges.
OUR RESERVE ESTIMATES MAY PROVE TO BE INACCURATE AND FUTURE NET CASH FLOWS ARE
UNCERTAIN.
Our estimates of the quantities of proved reserves and our projections of
both future production rates and the timing of development expenditures are
uncertain and may prove to be inaccurate. You should not construe these reserve
estimates as the current market value of our oil and natural gas reserves. Any
downward revisions of these estimates could adversely affect our financial
condition and our borrowing base under the credit facility.
Our reserve estimates must be reviewed by our reserve engineers, T.J. Smith
& Company, Inc. The accuracy of our reserve estimates depends in large part on
the quality of available data and on the engineering and geological
interpretation of our engineers. Our engineers may calculate estimates that vary
widely from estimates calculated by another team of independent engineers.
Our engineers may even make material changes to reserve estimates based on
the results of actual drilling, testing and production. Consequently, our
reserve estimates often differ from the quantities of oil and natural gas we
ultimately recover.
We also make certain assumptions regarding future oil and natural gas
prices, production levels, and operating and development costs that may prove
incorrect when judged against our actual experience. Any significant variance
from these assumptions could greatly affect our estimates of reserves, future
net cash flows and our ability to borrow under our credit facility.
3
WE DEPEND ON KEY PERSONNEL TO EXECUTE OUR BUSINESS PLANS.
The loss of any key executives or any other key personnel could have a
material adverse effect on our operations. We depend on the efforts and skills
of our key executives, including Joseph A. Reeves, Jr., Chairman of the Board
and Chief Executive Officer, and Michael J. Mayell, President and Chief
Operating Officer. Moreover, as we continue to grow our asset base and the scope
of our operations, our future profitability will depend on our ability to
attract and retain qualified personnel.
WE COMPETE AGAINST SIGNIFICANT PLAYERS IN THE OIL AND NATURAL GAS INDUSTRY,
AND OUR FAILURE IN THE LONG-TERM TO COMPLETE FUTURE ACQUISITIONS SUCCESSFULLY
COULD REDUCE OUR EARNINGS AND CAUSE REVENUES TO DECLINE.
The oil and natural gas industry is highly competitive. Our ability to
acquire additional properties and to discover additional reserves depends on our
ability to consummate transactions in this highly competitive environment. We
compete with major oil companies, other independent oil and natural gas
companies, and individual producers and operators. Many of these competitors
have access to greater financial and personnel resources than those to which we
have access. Moreover, the oil and natural gas industry competes with other
industries in supplying the energy and fuel needs of industrial, commercial and
other consumers. Increased competition causing oversupply or depressed prices
could materially adversely affect our revenues.
THE OIL AND NATURAL GAS MARKET IS HEAVILY REGULATED.
We are subject to various federal, state and local laws and regulations.
These laws and regulations govern safety, exploration, development, taxation and
environmental matters that are related to the oil and natural gas industry. To
conserve oil and natural gas supplies, regulatory agencies may impose price
controls and may limit our production. Certain laws and regulations require
drilling permits, govern the spacing of wells and the prevention of waste, and
limit the total number of wells drilled or the total allowable production from
successful wells. Other laws and regulations govern the handling, storage,
transportation and disposal of oil and natural gas and any byproducts produced
in oil and natural gas operations. These laws and regulations could materially
adversely impact our operations and our revenues.
Laws and regulations that affect us may change from time to time in
response to economic or political conditions. Thus, we must also consider the
impact of future laws and regulations that may be passed in the jurisdictions
where we operate. We anticipate that future laws and regulations related to the
oil and natural gas industry will become increasingly stringent and cause us to
incur substantial compliance costs.
THE NATURE OF OUR OPERATIONS EXPOSES US TO ENVIRONMENTAL LIABILITIES.
Our operations create the risk of environmental liabilities. We may incur
liability to governments or to third parties for any unlawful discharge of oil,
gas or other pollutants into the air, soil or water. We could potentially
discharge oil or natural gas into the environment in any of the following ways:
- from a well or drilling equipment at a drill site,
- from a leak in storage tanks, pipelines or other gathering and
transportation facilities,
- from damage to oil or natural gas wells resulting from accidents during
normal operations, or
- from blowouts, cratering or explosions.
Environmental discharges may move through the soil to water supplies or
adjoining properties, giving rise to additional liabilities. Some laws and
regulations could impose liability for failure to obtain the proper permits for,
to control the use of, or to notify the proper authorities of a hazardous
discharge. Such liability could have a material adverse effect on our financial
condition and our results of operations and could possibly cause our operations
to be suspended or terminated on such property.
4
We may also be liable for any environmental hazards created either by the
previous owners of properties that we purchase or lease or by acquired companies
prior to the date we acquire them. Such liability would affect the costs of our
acquisition of those properties. In connection with any of these environmental
violations, we may also be charged with remedial costs. Pollution and similar
environmental risks generally are not fully insurable.
Although we do not believe that our environmental risks are materially
different from those of comparable companies in the oil and natural gas
industry, we cannot assure you that environmental laws will not result in
decreased production, substantially increased costs of operations or other
adverse effects to our combined operations and financial condition.
WE REQUIRE SUBSTANTIAL CAPITAL REQUIREMENTS TO FINANCE OUR OPERATIONS.
We have substantial anticipated capital requirements. Our ongoing capital
requirements consist primarily of the need to fund our 2004 capital and
exploration budget and the acquisition, development, exploration, production and
abandonment of oil and natural gas reserves.
We plan to finance anticipated ongoing expenses and capital requirements
with funds generated from the following sources:
- cash provided by operating activities;
- available cash and cash investments;
- capital raised through debt and equity offerings; and
- funds received under our bank line of credit.
Although we believe the funds provided by these sources will be sufficient
to meet our 2004 cash requirements, the uncertainties and risks associated with
future performance and revenues will ultimately determine our liquidity and our
ability to meet anticipated capital requirements. If declining prices cause our
revenues to decrease, we may be limited in our ability to replace our reserves,
to maintain current production levels and to undertake or complete future
drilling and acquisition activities. As a result, our production and revenues
would decrease over time and may not be sufficient to satisfy our projected
capital expenditures. We may not be able to obtain additional debt or equity
financing in such a circumstance.
OUR OPERATIONS ENTAIL INHERENT CASUALTY RISKS FOR WHICH WE MAY NOT HAVE
ADEQUATE INSURANCE.
We must continually acquire, explore and develop new oil and natural gas
reserves to replace those produced and sold. Our hydrocarbon reserves and our
revenues will decline if we are not successful in our drilling, acquisition or
exploration activities. Although we have historically maintained our reserve
base primarily through successful exploration and development operations, future
efforts may not be similarly successful. Casualty risks and other operating
risks could cause reserves and revenues to decline.
Our onshore and offshore operations are subject to inherent casualty risks
such as fires, blowouts, cratering and explosions. Other risks include
pollution, the uncontrollable flows of oil, natural gas, brine or well fluids,
and the hazards of marine and helicopter operations such as capsizing, collision
and adverse weather and sea conditions. These risks may result in injury or loss
of life, suspension of operations, environmental damage or property and
equipment damage, all of which would cause us to experience substantial
financial losses.
Our drilling operations involve risks from high pressures and from
mechanical difficulties such as stuck pipes, collapsed casings and separated
cables. Our offshore properties involve higher exploration and drilling risks
such as the cost of constructing exploration and production platforms and
pipeline interconnections as well as weather delays and other risks. Although we
carry insurance that we believe is in accordance with customary industry
practices, we are not fully insured against all casualty risks incident to our
business. We do not carry business interruption insurance. Should an event occur
against which we are not insured, that event could have a material adverse
effect on our financial position and our results from operations.
5
OUR OPERATIONS ALSO ENTAIL SIGNIFICANT OPERATING RISKS.
Our drilling activities involve risks, such as drilling non-productive
wells or dry holes, which are beyond our control. The cost of drilling and
operating wells and of installing production facilities and pipelines is
uncertain. Cost overruns are common risks that often make a project
uneconomical. The decision to purchase and to exploit a property depends on the
evaluations made by our reserve engineers, the results of which are often
inconclusive or subject to multiple interpretations. We may also decide to
reduce or cease our drilling operations due to title problems, weather
conditions, noncompliance with governmental requirements or shortages and delays
in the delivery or availability of equipment or fabrication yards.
WE MAY NOT BE ABLE TO MARKET EFFECTIVELY OUR OIL AND NATURAL GAS PRODUCTION.
We may encounter difficulties in the marketing of our oil and natural gas
production. Effective marketing depends on factors such as the existing market
supply and demand for oil and natural gas and the limitations imposed by
governmental regulations. The proximity of our reserves to pipelines and the
available capacity of such pipelines and other transportation, processing and
refining facilities also affect our marketing efforts. Even if we discover
hydrocarbons in commercial quantities, a substantial period of time may elapse
before we begin commercial production. If pipeline facilities in an area are
insufficient, we may have to wait for the construction or expansion of pipeline
capacity before we can market production from that area. Another risk lies in
our ability to negotiate commercially satisfactory arrangements with the owners
and operators of production platforms in close proximity to our wells. Also,
natural gas wells may be shut in for lack of market demand or because of the
inadequate capacity or unavailability of natural gas pipelines or gathering
systems.
WE ARE DEPENDENT ON OTHER OPERATORS WHO INFLUENCE OUR PRODUCTIVITY.
We have limited influence over the nature and timing of exploration and
development on oil and natural gas properties we do not operate, including
limited control over the maintenance of both safety and environmental standards.
The operators of those properties may:
- refuse to initiate exploration or development projects (in which case we
may propose desired exploration or development activities);
- initiate exploration or development projects on a slower schedule than we
prefer; or
- drill more wells or build more facilities on a project than we can
adequately finance, which may limit our participation in those projects
or limit our percentage of the revenues from those projects.
The occurrence of any of the foregoing events could have a material adverse
effect on our anticipated exploration and development activities.
OUR WORKING INTEREST OWNERS FACE CASH FLOW AND LIQUIDITY CONCERNS.
If oil and natural gas prices decline, many of our working interest owners
may experience liquidity and cash flow problems. These problems may lead to
their attempting to delay the pace of drilling or project development in order
to conserve cash. Any such delay may be detrimental to our projects. In most
cases, we can influence the pace of development by enforcing our joint operating
agreements. Some working interest owners, however, may be unwilling or unable to
pay their share of the project costs as they become due. A working interest
owner may declare bankruptcy and refuse or be unable to pay its share of the
project costs and we would be obligated to pay that working interest owner's
share of the project costs.
OUR INABILITY TO ACQUIRE OR INTEGRATE ACQUIRED COMPANIES OR TO DEVELOP NEW
EXPLORATION PROSPECTS MAY INHIBIT OUR GROWTH.
From time to time and under certain circumstances, our business strategy
may include acquisitions of businesses that complement or expand our current
business and acquisition and development of new
6
exploration prospects that complement or expand our prospect inventory. We may
not be able to identify attractive acquisition or prospect opportunities. Even
if we do identify attractive opportunities, we may not be able to complete the
acquisition of the business or prospect or to do so on commercially acceptable
terms. If we do complete an acquisition, we must anticipate difficulties in
integrating its operations, systems, technology, management and other personnel
with our own. These difficulties may disrupt our ongoing operations, distract
our management and employees and increase our expenses. Even if we are able to
overcome such difficulties, we may not realize the anticipated benefits of any
acquisition. Furthermore, we may incur additional debt or issue additional
equity securities to finance any future acquisitions. Any issuance of additional
securities may dilute the value of shares currently outstanding.
TERRORIST ATTACKS AND THREATS OR ACTUAL WAR MAY NEGATIVELY AFFECT OUR
BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Our business is affected by general economic conditions and fluctuations in
consumer confidence and spending, which can decline as a result of numerous
factors outside of our control, such as terrorist attacks and acts of war.
Recent terrorist attacks in the United States, as well as events occurring in
response to or in connection with them, including future terrorist attacks
against U.S. targets, rumors or threats of war, actual conflicts involving the
United States or its allies, or military or trade disruptions impacting our
suppliers or our customers, may adversely impact our operations. Strategic
targets such as energy-related assets may be at greater risk of future terrorist
attacks than other targets in the United States. These occurrences could have an
adverse impact on energy prices, including prices for our natural gas and crude
oil production. In addition, disruption or significant increases in energy
prices could result in government-imposed price controls. It is possible that
any or a combination of these occurrences could have a material adverse effect
on our business, financial condition and results of operations.
ADDITIONAL RISK FACTORS
Please see the prospectus supplement and our filings with the Securities
and Exchange Commission incorporated herein for additional risk factors that may
be applicable to a particular class or issuance of Securities or to us in the
future.
FORWARD-LOOKING STATEMENTS
We believe that some statements contained in this prospectus or in the
documents incorporated by reference into this prospectus relate to results or
developments that we anticipate will or may occur in the future and are not
statements of historical fact. Those statements are "forward-looking statements"
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934 (the "Exchange Act"). Words such as
"anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan",
"predict", "project", "will" and similar expressions identify forward-looking
statements. Examples of forward looking statements include statements about the
following:
- our future operating results,
- our repayment of debt,
- our future capital expenditures,
- our expansion and growth of operations, and
- our future investments in and acquisitions of oil and natural gas
properties.
We have based these forward-looking statements on assumptions and analyses
made in light of our experience and our perception of historical trends, current
conditions, and expected future developments. However, you should be aware that
these forward-looking statements are only our predictions and we cannot
guarantee any such outcomes. Future events and actual results may differ
materially from the
7
results set forth in or implied in the forward-looking statements. Factors that
might cause such a difference include:
- general economic and business conditions,
- exposure to market risks in our financial instruments,
- fluctuations in worldwide prices and demand for oil and natural gas,
- fluctuations in the levels of our oil and natural gas exploration and
development activities,
- risks associated with oil and natural gas exploration and development
activities,
- competition for raw materials and customers in the oil and natural gas
industry,
- technological changes and developments in the oil and natural gas
industry,
- regulatory uncertainties and potential environmental liabilities,
- potential for and uncertainty of the outcome of pending or threatened
litigation, and
- additional matters discussed under "Risk Factors".
USE OF PROCEEDS
Unless we set forth other uses of proceeds in a prospectus supplement, we
will use the net proceeds of the sale of Securities by us described in this
prospectus and in any prospectus supplement for retirement of existing debt,
repurchase of common or preferred stock, future acquisitions and other general
corporate purposes.
The exact amounts to be used and when the net proceeds will be applied to
corporate purposes will depend on a number of factors, including our funding
requirements and the availability of alternative funding sources. We will
disclose in a prospectus supplement any future proposal to use net proceeds from
an offering of our Securities to finance a specific purpose, if applicable.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED
CHARGES PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS
We have computed the following ratios for each of the following periods on
a consolidated basis. You should read the ratios in conjunction with our
consolidated financial statements (including the notes thereto) incorporated by
reference to our most recent Annual Report on Form 10-K and Quarterly Report on
Form 10-Q as filed with the SEC.
<Table>
<Caption>
THREE MONTHS
ENDING
FISCAL YEAR MARCH 31, 2004
------------------------------------ --------------
1999 2000 2001 2002 2003
----- ----- ----- ---- -----
Ratio of earnings to fixed charges......... 1.72x 4.08x 2.74x * 2.56x 5.39x
Ratio of earnings to combined fixed charges
plus preferred stock dividend
requirements............................. 1.21x 3.21x 2.67x * 1.33x 3.14x
</Table>
- ---------------
* For the year ended December 31, 2002, fixed charges exceeded earnings by
approximately $69.7 million, and combined fixed changes plus preferred stock
dividend requirements exceeded earnings by approximately $78.2 million.
For purposes of computing these ratios, "earnings" consist of pretax income
from continuing operations plus fixed charges (excluding capitalized interest).
"Fixed charges" represent interest incurred (whether expensed or capitalized)
and financing costs, amortization of debt expense and that portion of rental
expense on operating leases deemed to be the equivalent of interest. "Preferred
stock dividend requirements" represent the amount of pretax earnings required to
pay dividends on preferred stock.
8
DESCRIPTION OF DEBT SECURITIES
We will issue our debt securities under a senior indenture or a
subordinated indenture among us, as issuer, any of our subsidiaries, as
subsidiary guarantors, and a trustee to be named in the applicable prospectus
supplement. The debt securities will be governed by the provisions of the
indenture and those made part of the indenture by reference to the Trust
Indenture Act of 1939, as amended (the "TIA"). We, the subsidiary guarantors and
the trustee may enter into supplements to the indenture from time to time. If we
decide to issue subordinated debt securities, we will issue them under a
separate indenture containing subordination provisions.
This description is a summary of the material provisions of the debt
securities and the indentures. The form of senior debt securities indenture and
form of subordinated debt securities indenture are filed with the SEC as
exhibits to the registration statement of which this prospectus forms a part. In
connection with an offering of our debt securities, we will file the definitive
indenture and, if applicable, a supplemental indenture relating to each series
of debt securities as an exhibit to the registration statement of which this
prospectus forms a part (or as an exhibit to a Current Report on Form 8-K or
other SEC filing) before we sell those debt securities. No indenture will be
restated in its entirety in a prospectus supplement. We urge you to read that
indenture and, if applicable, indenture supplement, because they, and not this
description, will control the rights of holders of the applicable debt
securities. References in this prospectus to an "indenture" refer to the
particular indenture under which we issue a series of debt securities.
In this section, the words "Company", "our", "we" and "us" refer only to
The Meridian Resource Corporation, the issuer of the debt securities, and not
our subsidiaries. Capitalized terms used in but not defined in this "Description
of Debt Securities" will have the meanings specified in the applicable
indenture, and any related supplemental indenture, and in an applicable
prospectus supplement.
GENERAL
The debt securities will be:
- senior debt securities; or
- subordinated debt securities.
Any series of debt securities that we issue:
- will be our general obligations;
- will be general obligations of our subsidiaries that execute subsidiary
guarantees; and
- may be subordinated to our Senior Indebtedness.
The indentures do not limit the total amount of debt securities that we may
issue. We may issue debt securities under an indenture from time to time in
separate series, up to the aggregate amount authorized for each such series.
We will prepare a prospectus supplement and either a supplemental indenture
or resolution of our board of directors and accompanying officers' certificate
relating to any series of debt securities that we offer, which will include
specific terms relating to some or all of the following:
- the form and title of the debt securities and whether the debt securities
are senior debt securities or subordinated debt securities;
- the aggregate principal amount of the debt securities being issued and
any limit on the aggregate principal amount that may be issued
thereafter;
- the date or dates on or during which the debt securities may be issued;
- the date or dates on which the principal of and premium, if any, on the
debt securities will be payable;
9
- the rate or rates (fixed or variable) at which the debt securities shall
bear interest, if any, and the date or dates from which the interest will
accrue;
- the dates on which interest, if any, will be payable and the record dates
for the interest payment dates;
- the place or places where the principal of and premium, if any, and
interest, if any, on the debt securities of the series will be payable;
- the period or periods, if any, within which, the price or prices at
which, and the terms and conditions upon which, we may have the option to
redeem the debt securities;
- any optional or mandatory redemption or repurchase or any sinking fund or
analogous provisions;
- whether the debt securities will be defeasible;
- if other than denominations of $1,000 and integral multiples thereof, the
denominations in which the debt securities of the series will be
issuable;
- if other than the principal amount thereof, the portion of the principal
amount of the debt securities which will be payable upon declaration of
the acceleration of the maturity thereof in accordance with the
provisions of the applicable indenture;
- whether payment of the principal of and premium, if any, and interest, if
any, on the debt securities will be without deduction for taxes,
assessments, or governmental charges paid by the holders;
- the currency or currencies, or currency unit or currency units, in which
the principal of and premium, if any, and interest, if any, on the debt
securities will be denominated, payable, redeemable or purchasable, as
the case may be;
- any changes to or additional Events of Default, covenants or
subordination provisions;
- whether the debt securities will be convertible or exchangeable and, if
so, upon what terms, and other provisions regarding the convertability or
exchangeability of the debt securities;
- whether the debt securities of the series will be issued as a global
certificate or certificates and, in that case, the identity of the
depositary for that series;
- whether the debt securities of such series will be entitled to the
benefit of any subsidiary guarantee provided in the indenture and, if so,
changes, additions or other modifications to those provisions and which
of our subsidiaries will guarantee those debt securities; and
- any other terms of the debt securities.
Unless otherwise indicated in any applicable prospectus supplement, the
debt securities of any series will be issued only in fully registered form in
denominations of $1,000 or any integral multiple thereof. The debt securities of
a series may be issuable in the form of one or more global certificates, which
will be denominated in an amount equal to all or a portion of the aggregate
principal amount of those debt securities. See "-- Global Debt Securities".
Each indenture will provide that the debt securities may be issued in one
or more series, in each case as established from time to time in, or pursuant to
authority granted by, a resolution of our board of directors or as established
in one or more indentures supplemental to such indenture. To the extent
specified in an applicable prospectus supplement, all debt securities of any one
series need not be issued at the same time and, unless otherwise provided, a
series may be reopened, without the consent of the holders of the debt
securities of that series, for issuances of additional debt securities of that
series.
Subject to the terms of the applicable indenture and the limitations
applicable to global debt securities, debt securities may be transferred or
exchanged at the corporate trust office of the applicable trustee or at any
other office or agency we maintain for that purpose, without the payment of any
service charge except for any tax or governmental charge.
10
GLOBAL DEBT SECURITIES
The debt securities of any series may be issued, in whole or in part, in
the form of one or more global certificates that will be deposited with the
depositary identified in the applicable prospectus supplement.
No global debt security may be exchanged in whole or in part for the debt
securities registered in the name of any person other than the depositary for
that global debt security or any nominee of that depositary unless:
- the depositary is unwilling or unable to continue as depositary;
- we, at any time and in our sole discretion, determine that the debt
securities issued in the form of one more global certificates shall no
longer be represented by such global certificate or certificates;
- an Event of Default has occurred and is continuing; or
- as otherwise provided in the applicable prospectus supplement.
Unless otherwise stated in any applicable prospectus supplement, The
Depository Trust Company ("DTC") will act as depositary. Beneficial interests in
global certificates will be shown on, and transfers of global certificates will
be affected only through, records maintained by DTC and its participants.
PAYMENT
Unless otherwise indicated in the applicable prospectus supplement, payment
of interest on a debt security on any interest payment date will be made to the
person in whose name that debt security is registered at the close of business
on the regular record date for that interest payment.
Unless otherwise indicated in the applicable prospectus supplement,
principal of, and interest and any premium on, our debt securities will be paid
at designated places. However, at our option, payment may be made by check
mailed to the persons in whose names our debt securities are registered on days
specified in the applicable indenture or any prospectus supplement.
ORIGINAL ISSUE DISCOUNT
One or more series of debt securities offered by this prospectus may be
sold at a substantial discount below their stated principal amount, bearing no
interest or interest at a rate that at the time of issuance is below market
rates. The federal income tax consequences and special considerations applicable
to any series of debt securities generally will be described in the applicable
prospectus supplement.
SUBSIDIARY GUARANTEES
Our payment obligations under any series of the debt securities may be
jointly and severally guaranteed by certain of our subsidiaries. If a series of
debt securities are so guaranteed by any of our subsidiaries, such subsidiaries
will execute a notation of guarantee as further evidence of their guarantee.
Each indenture provides the terms of any guarantee by our subsidiaries, and the
applicable prospectus supplement will describe any changes, additions or
modifications to those terms and will identify our subsidiaries that will
guarantee those debt securities.
The obligations of each subsidiary under its subsidiary guarantee will be
limited to the maximum amount that will not result in such guarantee obligations
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law, after giving effect to all other contingent and fixed liabilities of
that subsidiary and any collections from or payments made by or on behalf of any
other subsidiary guarantor in respect to its obligations under its subsidiary
guarantee.
Each indenture will provide for the release of a subsidiary from a
subsidiary guarantee and may restrict the consolidation or merger with or into a
subsidiary guarantor, as set forth in a related prospectus supplement and the
applicable indenture, and applicable related supplemental indenture.
11
If a series of debt securities is guaranteed by our subsidiaries and is
designated as subordinate to our Senior Indebtedness, then the guarantee by such
subsidiaries will be subordinated to the Senior Indebtedness of such
subsidiaries to substantially the same effect as the series is subordinated to
our Senior Indebtedness. See "-- Subordination".
MERGER OR CONSOLIDATION
Each indenture provides that we may not consolidate with or merge with or
into or wind up into, whether or not we are the surviving corporation, or sell,
assign, convey, transfer or lease our properties and assets substantially as an
entirety to any person, unless:
- the corporation formed by the consolidation or into which we are merged
or the person that acquires by conveyance or transfer, or that leases our
properties and assets substantially as an entirety (the "successor
corporation") is a corporation organized and existing under the laws of
the United States or any State or territory thereof or the District of
Columbia and expressly assumes by a supplemental indenture the due and
punctual payment of the principal of, and premium, if any, and interest
on, all our debt securities issued under the applicable indenture, and
related supplemental indenture, and the performance of every covenant in
the applicable indenture, and related supplemental indenture, on our part
to be performed or observed;
- immediately after giving effect to such transaction, no Event of Default
under the applicable indenture, and related supplemental indenture, and
no event that, after notice or lapse of time, or both, would become an
Event of Default, has happened and is continuing; and
- any other conditions as may be specified in the applicable prospectus
supplement are satisfied.
COVENANTS
The additional covenants, if any, applicable to us and our subsidiaries and
relating to any series of debt securities will be described in the prospectus
supplement relating to that series. If any of these covenants is described, the
prospectus supplement also will state whether the "covenant defeasance"
provisions described below also apply.
EVENTS OF DEFAULT
Unless otherwise specified in a supplemental indenture (see
"-- Modification and Waiver") or otherwise specified in the applicable
prospectus supplement, each of the following events will be an Event of Default
under an indenture with respect to a series of debt securities:
- failure to pay any interest on any debt security of the series when due,
continued for 30 days;
- failure to pay principal of (or premium, if any, on) any debt security of
the series when due;
- failure to perform or comply with any covenant contained in the debt
securities of the series or in the applicable indenture or related
supplemental indenture, continued for 60 days after written notice as
provided in the indenture (other than a default otherwise specifically
dealt with in the applicable indenture or in any supplemental indenture);
- failure to deposit a sinking fund or any other such analogous required
payment, if any, when and as due by the terms of a debt security of the
series;
- if the debt security is guaranteed by any one of our subsidiaries, except
as permitted by the applicable indenture or related supplemental
indenture, any subsidiary guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any guarantor, or any person acting on
behalf of any guarantor, shall deny or disaffirm its obligations under
its subsidiary guarantee (other than by reason of the termination of the
indenture or the release of any subsidiary guarantee in accordance with
the indenture);
- certain events in bankruptcy, insolvency or reorganization affecting us;
and
12
- any other event indicated as an Event of Default in any applicable
supplemental indenture and prospectus supplement relating to the debt
securities of that series.
If an Event of Default with respect to debt securities of any series occurs
and is continuing, then the applicable trustee or the holders of at least 25% in
aggregate principal amount of the outstanding debt securities of that series may
accelerate the maturity of all debt securities of that series; provided,
however, that after such acceleration, but before a judgment or decree has been
issued based on acceleration, the holders of a majority in aggregate principal
amount of outstanding debt securities of that series may, under certain
circumstances, rescind and annul such acceleration if all Events of Default,
other than the nonpayment of accelerated principal, have been cured or waived as
provided in the applicable indenture.
A default under the third bullet point above will not constitute an Event
of Default until the applicable trustee or the holders of 25% in principal
amount of the outstanding debt securities of that series notify us of the
default and such default is not cured or waived within 60 days after receipt of
notice. The holders of a majority in principal amount of the outstanding debt
securities of a series may waive all past due defaults with respect to such
series, except with respect to nonpayment of principal, premium or interest or
sinking fund installment or analogous obligation with respect to the debt
securities of such series or in respect to a covenant or provision which
pursuant to the terms of an indenture cannot be modified or amended without the
consent of the holders of each outstanding debt security or such series
affected.
No holder of any debt security will have any right to institute any
proceeding with respect to the applicable indenture or for any remedy
thereunder, unless that holder shall have previously given to the trustee
thereunder written notice of a continuing Event of Default and unless the
holders of at least 25% in aggregate principal amount of the outstanding debt
securities of such series shall have made written request, and offered
reasonable indemnity, to the trustee to institute such proceeding as trustee,
and the trustee shall not have received from the holders of a majority in
aggregate principal amount of the outstanding debt securities of such series a
direction inconsistent with such request and the trustee shall have failed to
institute such proceeding within 60 days. However, that limitation does not
apply to a suit instituted by a holder of a debt security for enforcement of
payment of the principal of (and premium, if any) or interest, if any, on such
debt security on or after the respective due dates expressed in such debt
security.
Subject to provisions in each indenture relating to its duties in case an
Event of Default shall have occurred and be continuing, no trustee will be under
an obligation to exercise any of its rights or powers under that indenture at
the request or direction of any holders of debt securities then outstanding
under that indenture, unless the holders shall have offered to the applicable
trustee reasonable indemnity. Subject to the provisions in each indenture for
the indemnification of the applicable trustee, the holders of a majority in
aggregate principal amount of the outstanding debt securities of any series will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the applicable trustee or exercising any trust or
power conferred on the trustee.
Each indenture provides that the applicable trustee may withhold notice to
the holders of a series of debt securities of any default, except payment
defaults on those debt securities, if it considers such withholding to be in the
interest of the holders of that series of debt securities.
We will be required to furnish to each trustee annually a certificate as to
our performance of certain of our obligations under the applicable indenture and
as to any default in performance.
DISCHARGE, LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The applicable indenture with respect to the debt securities of any series
may be discharged, subject to the terms and conditions as specified in the
applicable prospectus supplement when either:
- all debt securities, with the exceptions provided for in the indenture,
of that series have been delivered to the applicable trustee for
cancellation;
13
- all debt securities of that series not theretofore delivered to the
applicable trustee for cancellation:
- have become due and payable;
- will become due and payable at their stated maturity within one year; or
- are to be called for redemption within one year; or
- certain events or conditions occur as specified in the applicable
prospectus supplement.
If provision is made for the defeasance of debt securities of a series, and
if the debt securities of that series are registered securities and denominated
and payable only in U.S. dollars, then the provisions of each indenture relating
to defeasance will be applicable except as otherwise specified in the applicable
prospectus supplement for debt securities of that series. Defeasance provisions,
if any, for debt securities denominated in a foreign currency or currencies may
be specified in the applicable prospectus supplement.
At our option, either:
- we will be deemed to have been discharged from our obligations with
respect to debt securities of any series, i.e. the "legal defeasance
option"; or
- we will cease to be under any obligation to comply with certain
provisions of the applicable indenture with respect to certain covenants,
if any, specified in the applicable prospectus supplement with respect to
debt securities of any series, i.e. the "covenant defeasance option",
at any time after the conditions set forth in the applicable prospectus
supplement have been satisfied.
In addition, each series of debt securities may provide additional or
different terms or conditions for the discharge or defeasance of some or all of
our obligations as may be specified in the applicable prospectus supplement.
SUBORDINATION
Debt securities of a series may be subordinated to our "Senior
Indebtedness", which we define generally as money borrowed, including
guarantees, by us or, if applicable to any series of outstanding debt
securities, by the subsidiary guarantors, that are not expressly subordinate or
junior in right of payment to any of our or any subsidiary guarantor's other
indebtedness. However, Senior Indebtedness will not include certain of our or
any subsidiary guarantor's indebtedness for money borrowed or owing to a
subsidiary guarantor or indebtedness any subsidiary guarantor owes to us.
Additionally, with respect to each indenture, Senior Indebtedness will not
include the debt securities issued under that indenture. Subordinated debt
securities will be subordinate in right of payment, to the extent and in the
manner set forth in the indenture, and related supplemental indenture, and the
prospectus supplement relating to such series, to the prior payment of all of
our indebtedness and that of any subsidiary guarantor that is designated as
"Senior Indebtedness" with respect to the series.
Upon any distribution to our creditors in a liquidation, dissolution or
reorganization of us, the payment of the principal of and premium, if any, and
interest on the subordinated debt securities will be subordinated to the extent
provided in the Subordinated Indenture in right of payment to the prior payment
in full of all Senior Indebtedness. Unless otherwise indicated in a prospectus
supplement, if, notwithstanding the foregoing, any payment by us described in
the previous sentence is received by the trustee under the Subordinated
Indenture or the holders of any of the debt securities issued under the
Subordinated Indenture before all Senior Indebtedness is paid in full, that
payment or distribution will be paid over to the holders of Senior Indebtedness
or on their behalf for application to the payment of all Senior Indebtedness
remaining unpaid until all Senior Indebtedness has been paid in full, after
giving effect to any concurrent payment or distribution to the holders of Senior
Indebtedness. After all Senior Indebtedness is paid in full and until the
subordinated debt securities are paid in full, the applicable holders of the
subordinated debt securities will be subrogated to the rights of holders of
Senior Indebtedness to the extent that distributions otherwise payable to
holders of the subordinated debt securities have been applied to the payment of
Senior Indebtedness. By reason of subordination, if a
14
distribution of assets upon insolvency occurs, certain of our general creditors
will recover more, ratably, than holders of the subordinated debt securities.
Except as provided in a prospectus supplement, no payment of principal and
premium, if any, or interest may be made on subordinated debt securities unless
full payment of amounts then due for principal, premium, if any, sinking funds
and interest on Senior Indebtedness has been made or duly provided for. However,
in each of the preceding circumstances, our obligation to make payment of the
principal of and premium, if any, and interest on the subordinated debt
securities will not otherwise be affected. In addition, the prospectus
supplement for each series of subordinated debt securities may provide that
payments on account of principal, premium, if any, or interest in respect of
such debt securities may be delayed or not paid under the circumstances and for
the periods specified in that prospectus supplement.
MODIFICATION AND WAIVER
Without prior notice to or consent of any holders, we and the applicable
trustee, at any time and from time to time, may modify the applicable indenture
for any of the following purposes:
- to evidence the succession of another corporation to our rights and the
assumption by that successor of our covenants and obligations under the
applicable indenture and under our debt securities issued thereunder in
accordance with the terms of the applicable indenture;
- to add to our covenants for the benefit of the holders of all or any
series of our debt securities and, if those covenants are to be for the
benefit of less than all series, that those covenants are expressly being
included solely for the benefit of that series, or to surrender any of
our rights or powers under the applicable indenture;
- to add any additional Events of Default, and if those Events of Default
are to be applicable to less than all series, stating that those Events
of Default are expressly being included solely to be applicable to that
series;
- to change or eliminate any of the provisions of the applicable indenture,
provided that any such change or elimination will become effective only
when there is no outstanding debt security issued thereunder of any
series created prior to such modification that is entitled to the benefit
of such provision and as to which such modification would apply;
- to secure the debt securities issued thereunder or to provide that any of
our obligations under the debt securities or the applicable indenture
shall be guaranteed and the terms and conditions for the release or
substitution of the security on guarantee;
- to supplement any of the provisions of the applicable indenture to the
extent necessary to permit or facilitate the defeasance and discharge of
any series of debt securities, provided that any such action will not
adversely affect the interests of the holders of debt securities of that
series or any other series of debt securities issued under the applicable
indenture in any material respect;
- to establish the form or terms of debt securities as permitted by the
applicable indenture;
- to evidence and provide for the acceptance of appointment thereunder by a
successor trustee with respect to one or more series of debt securities
and to add to or change any of the provisions of the applicable indenture
as is necessary to provide for or facilitate the administration of the
trusts thereunder by more than one trustee;
- to cure any ambiguity, to correct or supplement any provision in the
applicable indenture that may be defective or inconsistent with any other
provision therein, to eliminate any conflict between the terms of the
applicable indenture and the debt securities issued thereunder and the
TIA or to make any other provisions with respect to matters or questions
arising under the applicable indenture that will not be inconsistent with
any provision of the applicable indenture; provided those other
provisions do not adversely affect the interests of the holders of our
outstanding debt securities of any series created thereunder prior to
such modification in any material respect; or
15
- regarding the Subordinated Indenture only, to make any changes to
terminate or limit the subordination benefits available to any holder of
Senior Indebtedness.
We and the applicable trustee will be permitted to make modifications and
amendments of an indenture with the consent of the holders of a majority in
aggregate principal amount of each series of outstanding debt securities issued
under that indenture which are affected by modification or amendment; provided,
however, that no modification or amendment may, without the consent of the
holder of each debt security of each series affected:
- change the stated maturity of the principal of, or any installment of
interest on, any debt security;
- reduce the principal amount, or interest on, any debt security or the
premium payable upon redemption thereof;
- change the currency or currencies of payment of principal of (or premium,
if any, on), or interest on, any debt security;
- reduce the amount of the principal of a debt security that is issued with
original issue discount which would be due and payable upon acceleration
of the maturity of such debt security;
- reduce the amount, or postpone the date fixed for, any payment under any
sinking fund or analogous provision for a debt security;
- impair the right to institute suit for the enforcement of any payment on
or after the stated maturity date or redemption date, as applicable, with
respect to any debt security;
- adversely affect the right to convert any debt security into shares of
our common stock as may be provided in any prospectus supplement and
related supplemental indenture;
- reduce the above-stated percentage of outstanding debt securities of any
series necessary to modify or amend the applicable indenture;
- reduce the percentage of aggregate principal amount of outstanding debt
securities of any series necessary for waiver of compliance with certain
provisions of the applicable indenture or for waiver of certain defaults
and their consequences;
- modify any provisions of the indenture relating to the modification and
amendment provisions of the applicable indenture which cannot be modified
or amended without the consent of each holder of an affected debt
security or the waiver of past defaults, except modifications and
amendments to the applicable indenture that make such provisions more
restrictive; or
- regarding the Subordinated Indenture only, modify any provisions relating
to debt securities in a manner adverse to its holders.
The holders of a majority in principal amount of the outstanding debt
securities of a series may waive our compliance with certain restrictive
provisions of the applicable indenture. The holders of a majority in principal
amount of the outstanding debt securities of a series may waive any past default
under the applicable indenture with respect to such series, except with respect
to the nonpayment of principal, premium or interest, or sinking fund installment
or analogous obligation with respect to the debt securities of such series.
In no event may any modification make any change that adversely affects the
subordination rights of any holder of outstanding Senior Indebtedness unless
that holder, or its authorized representative, consents to the modification.
A modification that changes or eliminates any covenant or other provision
of the applicable indenture with respect to one or more particular series of
debt securities, or that modifies the rights of the holders of debt securities
of that series with respect to that covenant or other provision, will be deemed
not to affect the rights under the applicable indenture of the holders of debt
securities of any other series.
16
THE TRUSTEE
The indentures will provide that, except during the continuance of an Event
of Default, the applicable trustee will perform only those duties specifically
set forth in the applicable indenture. During the existence of an Event of
Default, the trustee will exercise those rights and powers vested in it under
the indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise under the circumstances in the conduct of that
person's own affairs.
The indentures and the provisions of the TIA incorporated by reference in
the indentures will limit the rights of each of the trustees, if it becomes our
creditor, to obtain payment of claims in certain cases or to realize on certain
property received by it in respect of any claim as security or otherwise. Each
of the trustees is permitted to engage in other transactions with us or any
affiliate; provided, however, that if a trustee acquires any conflicting
interest (as defined in the applicable indenture or in the TIA), it must
eliminate any conflict or resign.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES OR STOCKHOLDERS
None of our directors, officers, members, managers, employees or
stockholders, or directors, officers, members, managers, employees or
stockholders of our affiliates, shall have any personal liability in respect of
our obligations under any of the indentures or the debt securities by reason of
his, her or its status as a director, officer, member, manager, employee, or
stockholder.
APPLICABLE LAW
The indentures and the debt securities will be governed by, and construed
in accordance with, the laws of the State of New York.
DESCRIPTION OF COMMON STOCK AND PREFERRED STOCK OF MERIDIAN
Our articles of incorporation authorize the issuance of 200,000,000 shares
of common stock at $0.01 par value and 25,000,000 shares of preferred stock at
$1.00 par value. As of May 14, 2004 there were 68,638,208 shares of common stock
outstanding held by approximately 835 holders of record and 485,563 shares of
Series C Redeemable Convertible Preferred Stock outstanding held by 26 holders
of record. Because the following description of our capital stock is a summary,
it does not contain all the information that may be important to you. You should
read the following documents for more complete information:
- our third amended and restated articles of incorporation,
- our amended and restated bylaws, and
- the certificate of designation for the Series C Redeemable Convertible
Preferred Stock, dated March 31, 2002.
COMMON STOCK
All shares of our common stock shall rank equally and be identical within
their classes in all respects regardless of series, except as to the terms that
may be specified by our board of directors. All shares of any one series of a
class of common stock shall be of equal rank and identical in all respects,
except that shares of any one series issued at different times may differ as to
the dates on which dividends shall accrue and be cumulative. Shares of common
stock of any one class or series may be issued with either full or limited
voting powers or with no voting powers. Any rights, designations, preferences,
or limitations on common stock shall be clearly stated in the resolution adopted
by our board of directors providing for the issuance of such stock and may be
made dependent upon facts ascertainable outside such resolution.
17
Except as required by law or provided in any resolution adopted by our
board of directors designating any series of our preferred stock, the holders of
common stock:
- will possess the exclusive voting power of Meridian,
- are entitled to one vote for each share held of record on all matters
submitted to a vote of shareholders,
- are entitled to receive any dividends as may be declared by our board of
directors in its sole discretion out of legally available funds, and
- in the event of our liquidation, dissolution or winding up, are entitled
to share ratably in all assets remaining after payment of liabilities and
after the liquidation preference of any outstanding preferred stock.
Holders of common stock have no preemptive rights, no rights to convert
their common stock into any other securities and no cumulative voting rights at
any election of directors. Each holder of common stock is entitled to vote in
person or by proxy the number of shares owned by him in the election of each
director for whose election he has a right to vote. No redemption or sinking
fund provisions apply to the common stock. All of the outstanding shares of
common stock are, and any shares offered hereby will be, fully paid and
nonassessable. The registrar and transfer agent of our common stock is American
Stock Transfer & Trust Co.
PREFERRED STOCK
Our articles of incorporation authorize our board of directors to issue
shares of preferred stock in one or more series. For each series of preferred
stock, our board of directors shall designate the number of shares of the
series, the applicable voting powers of the series, and any rights,
designations, preferences, or limitations on the series. Shares of preferred
stock of any one class or series may be issued with either full or limited
voting powers or with no voting powers.
All of the shares of our preferred stock shall rank equally and be
identical within their classes in all respects regardless of series, except as
to the terms that may be specified by our board of directors. All shares of any
one series of a class of preferred stock shall be of equal rank and identical in
all respects, except that shares of any one series issued at different times may
differ as to the dates on which dividends shall accrue and be cumulative.
Holders of preferred stock have no preemptive rights and no cumulative voting
rights at any election of directors.
You should refer to the certificate of designation for the Series C
Redeemable Convertible Preferred Stock, dated March 31, 2002 which sets forth
the terms of the shares of Series C Redeemable Convertible Preferred Stock
outstanding as of the date of this prospectus.
CERTAIN ANTI-TAKEOVER CONSIDERATIONS; CHANGE OF CONTROL
GENERAL
Our third amended and restated articles of incorporation, amended and
restated bylaws, shareholder rights plan and the Texas Business Corporation Act
contain provisions that may have the effect of impeding the acquisition of
control of our company by means of a tender offer, a proxy fight, open market
purchases or otherwise in a transaction not approved by our board of directors.
These provisions are designed to reduce, or have the effect of reducing, our
vulnerability to an unsolicited proposal for the restructuring or sale of all or
substantially all of our assets or an unsolicited takeover attempt that is
unfair to our shareholders.
TEXAS BUSINESS COMBINATION LAW
We are governed by the provisions of the Texas Business Corporation Act
(the "TBCA"). The TBCA imposes a special voting requirement for the approval of
specific business combinations and related
18
party transactions between public corporations and affiliated shareholders
unless the board of directors of the corporation approves the transaction or the
acquisition of shares by the affiliated shareholder prior to the affiliate
shareholder becoming an affiliated shareholder. The TBCA prohibits specific
mergers, sales of assets, reclassifications and other transactions between
shareholders beneficially owning 20% or more of the outstanding stock of a Texas
public corporation for a period of three years following the shareholder
acquiring shares representing 20% or more of the corporation's voting power
unless two-thirds of the unaffiliated shareholders approve the transaction at a
meeting held no earlier than six months after the shareholder acquires that
ownership. A vote of shareholders is not necessary if the board of directors
approves the transaction or approves the purchase of shares by the affiliated
shareholder before the affiliated shareholder acquires beneficial ownership of
20% or more of the shares, or if the affiliated shareholder was an affiliated
shareholder before December 31, 1996, and continued as such through the date of
the transaction.
RIGHTS PLAN
In May of 1999, our Board of Directors implemented a shareholder rights
plan pursuant to which holders of our common stock were granted dividend rights
to purchase one share of Series B Preferred Stock ("Rights") for each share of
our common stock that is outstanding between May 17, 1999 and the earlier of the
distribution date and May 5, 2009. Each Right entitles the registered holder to
purchase from us one share of our Series B Preferred Stock, par value $1.00 per
share (the "Preferred Shares"), at a price of $30.00 per one one-thousandth
interest in a Preferred Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between us and American Stock Transfer & Trust Co., as
Rights Agent (the "Rights Agent").
The "Distribution Date" will occur the earlier of (i) ten business days
following a public announcement that a person or group of affiliated or
associated persons (except Shell Louisiana Onshore Properties Inc. or its
affiliates) has acquired beneficial ownership of 15% or more of our outstanding
common stock and (ii) ten business days following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of our outstanding common stock.
The Purchase Price payable, and the number of interests in Preferred Shares
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution. The Rights are not
exercisable until the Distribution Date. Until a Right is exercised, the holder
thereof, as such, will have no rights as a shareholder of our company,
including, without limitation, the right to vote or to receive dividends.
The terms of the Rights may be amended by our board of directors without
the consent of the holders of the Rights at any time to cure any ambiguity or to
correct or supplement any defective or inconsistent provisions and may, prior to
the Distribution Date, be amended to change or supplement any other provision in
any manner which we may deem necessary or desirable.
The Rights will cause substantial dilution to a person or group that
attempts to acquire our company without conditioning the offer on a substantial
number of Rights being acquired. The Rights should not interfere with any merger
or other business combination approved by our board of directors since our board
of directors may, at its option, redeem all but not less than all the then
outstanding Rights.
THIRD AMENDED AND RESTATED ARTICLES OF INCORPORATION AND AMENDED AND RESTATED
BYLAWS
Preferred Stock. Under our third amended and restated articles of
incorporation, our board of directors has the authority, without further
shareholder approval, to issue preferred stock in series and to fix the
designations, voting power, preferences and rights of the shares of each series
and any qualifications, limitations or restrictions with respect to that series.
One of the effects of such authorized but unissued and unreserved shares of
preferred stock may be to render it more difficult for, or discourage an attempt
by, a potential acquiror to obtain control of our company by means of a merger,
tender offer, proxy contest
19
or otherwise, and thereby protect the continuity of our management. The issuance
of shares of preferred stock may have the effect of delaying, deferring or
preventing a change in control of our company without any further action by our
shareholders.
Other Provisions. Other provisions of our third amended and restated
articles of incorporation and amended and restated bylaws include:
- 80% supermajority voting requirements to approve certain extraordinary
corporate transactions, to approve business combinations with related
persons (except in certain situations), to remove the entire board of
directors (for cause) or to approve certain amendments to our restated
certificate of incorporation and bylaws;
- classification of our board of directors;
- prohibition on our shareholders calling a meeting unless holders of at
least 50% of the outstanding common stock call such meeting;
- ability of our board of directors to increase the size of the board and
fill vacancies on the board; and
- prohibition on our shareholders acting by written consent (unless
unanimous).
PLAN OF DISTRIBUTION
We may sell the Securities:
- through underwriters as named in the applicable prospectus supplement,
- directly to investors or to other purchasers, or
- through a combination of these two methods of sale.
Any agent, dealer or underwriter may be deemed to be an underwriter within
the meaning of the Securities Act. The prospectus supplement relating to any
offering of the Securities will set forth the offering terms, including the name
or names of any underwriters, the purchase price of the Securities and the
proceeds to us from such sale, any underwriting discounts, commissions or other
items constituting compensation to the underwriter, any initial public offering
price, any underwriting discounts, commissions or other items allowed or
reallowed or paid to dealers, and any securities exchanges on which the
Securities may be listed. Only underwriters so named in the prospectus
supplement are deemed to be underwriters in connection with the Securities
offered in this prospectus.
If underwriters are used in the sale, they will acquire the Securities for
their own account and may resell the Securities from time to time in one or more
transactions at a fixed price or prices that are subject to change, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The Securities may be offered to the
public either through underwriting syndicates represented by one or more
managing underwriters or directly by one or more underwriting firms. Unless
otherwise set forth in the prospectus supplement, the obligations of the
underwriters to purchase the Securities will be subject to certain conditions
precedent and the underwriters will be obligated to purchase all the offered
Securities if any are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
If so indicated in the prospectus supplement, we will authorize
underwriters to solicit offers by certain specified purchasers to purchase the
Securities from us at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. These contracts will be subject only
to those conditions set forth in the prospectus supplement and the prospectus
supplement will set forth the commission payable for solicitation
20
of these contracts. The underwriters soliciting these contracts will have no
responsibility for the validity or performance of any such contracts.
The Securities may or may not be listed on a national securities exchange
(other than the common stock, which is listed on the New York Stock Exchange.)
Any common stock sold pursuant to a prospectus supplement will be listed on the
New York Stock Exchange, subject to official notice of issuance. Any
underwriters to whom we sell the Securities for public offering and sale may
make a market in those Securities, but the underwriters will not be obligated to
do so and may discontinue any market making activities at any time without
notice. We cannot assure you that there will be an active trading market for any
Securities.
In connection with distributions of the Securities, we may enter into
hedging transactions with broker-dealers through which those broker-dealers may
sell the Securities registered hereunder in the course of hedging, through short
sales, the positions they assume with us.
We may enter into agreements with any underwriters who participate in the
distribution of the Securities to reimburse them for certain expenses, to
provide contribution to payments they may be required to make in any
distribution, and to indemnify them against certain civil liabilities, including
liabilities under the Securities Act.
Certain underwriters and their associates may be customers of, engage in
transactions with and perform services for us in the ordinary course of
business.
LEGAL MATTERS
Unless otherwise specified in a prospectus supplement relating to the
Securities, certain legal matters with respect to the validity of the Securities
will be passed upon for us by Fulbright & Jaworski L.L.P., Houston, Texas and
for the underwriters, if any, by counsel to be named in the appropriate
prospectus supplement.
EXPERTS
The consolidated financial statements of The Meridian Resource Corporation
for the year ended December 31, 2002, included in The Meridian Resource
Corporation's Annual Report (Form 10-K) for the year ended December 31, 2003,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
The financial statements for the year ended December 31, 2003 incorporated
by reference in this prospectus have been audited by BDO Seidman, LLP,
independent public accountants, to the extent and for the periods set forth in
their report incorporated herein by reference, and are incorporated herein in
reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
RESERVE ENGINEERS
We have derived the estimates of proved oil and natural gas reserves and
related future net revenues and the present value thereof as of December 31,
2003, included in Meridian's Annual Report on Form 10-K for the year ended
December 31, 2003, from the reserve report of T.J. Smith & Company, Inc.,
independent petroleum engineers. We have incorporated all of that information by
reference herein on the authority of T.J. Smith & Company, Inc. as experts in
such matters.
21
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy materials that we have filed
with the SEC at the SEC's public reference room located at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for further information on the public reference room. Our SEC filings also are
available to the public on the SEC's web site at www.sec.gov, which contains
reports, proxies and information statements and other information regarding
issuers that file electronically.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus. Information that we file later with
the SEC will automatically update certain information in this prospectus. In all
cases, you should rely on the later information over different information
included in this prospectus or the prospectus supplement. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
- Meridian's Annual Report on Form 10-K for the fiscal year ended December
31, 2003, as amended.
- Meridian's Quarterly Report on Form 10-Q for the three months ended March
31, 2004.
- Meridian's Registration Statement on Form 8-A, as amended on May 13,
1999.
Upon oral or written request, we will provide without charge to each
person, including any beneficial owner, to whom this prospectus is delivered a
copy of any document incorporated by reference in this prospectus, other than
exhibits to any such document not specifically described above. Send your
requests to Lloyd DeLano, Senior Vice President and Chief Accounting Officer,
The Meridian Resource Corporation, 1401 Enclave Parkway, Suite 300, Houston,
Texas 77077, telephone number: 281-597-7000.
22
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the distribution of the securities covered by this registration statement. We
will bear all of the expenses except as otherwise indicated.
<Table>
Registration fee under the Securities Act................... $ 44,345
Printing and engraving expenses*............................ 50,000
Legal fees and expenses*.................................... 50,000
Accounting fees and expenses*............................... 75,000
Fees and expenses of trustee and counsel*................... 25,000
Miscellaneous*.............................................. 5,655
--------
Total............................................. $250,000
--------
</Table>
- ---------------
* Estimated solely for the purpose of this Item. Actual expenses may be more or
less, depending on the nature of the offering and the type of security.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Texas law and our third amended and restated articles of incorporation and
amended and restated bylaws include provisions designed to limit the liability
of our officers and directors and, in certain circumstances, to indemnify our
officers and directors against certain liabilities. These provisions are
designed to encourage qualified individuals to serve as our officers and
directors.
Indemnification. Article 2.02-1 of the Texas Business Corporation Act
provides that any director or officer of a Texas corporation may be indemnified
against judgments, penalties (including excise and similar taxes), fines,
settlements, and reasonable expenses actually incurred by him in connection with
or in defending any of the following:
- a threatened, pending, or completed action, suit, or proceeding whether
civil, criminal, administrative, arbitrative, or investigative,
- an appeal in such an action, suit, or proceeding, or
- an inquiry or investigation that could lead to such an action, suit, or
proceeding in which he is a party or to which he is subject by reason of
his position.
With respect to any proceeding arising from actions taken in his official
capacity as a director or officer, he may be indemnified so long as he conducted
himself in good faith and reasonably believed that such conduct was in the best
interest of the corporation. In cases not concerning conduct in his official
capacity as a director or officer, a director or officer may be indemnified so
long as he conducted himself in good faith and he reasonably believed that his
conduct was not opposed to the best interests of the corporation. In the case of
any criminal proceeding, a director or officer may be indemnified if he had no
reasonable cause to believe his conduct was unlawful. Indemnification is
mandatory if a director or officer is wholly successful on the merits or
otherwise in defense of any proceeding. Article Nine of Meridian's third amended
and restated articles of incorporation and Article XII of Meridian's amended and
restated bylaws require the indemnification of officers and directors to the
fullest extent permitted by the Texas Business Corporation Act.
The amended and restated bylaws also allow Meridian to maintain insurance
coverage that indemnifies any officer or director against liabilities asserted
against him in such capacity.
II-1
Exculpation Of Monetary Liability. Effective as of August 28, 1989, Article
7.06.B of the Texas Miscellaneous Corporation Laws Act was amended to allow a
corporation to include provisions in its articles of incorporation that relieve
its directors of monetary liability for breaches of their fiduciary duty to the
corporation, its shareholders or its members, except under certain
circumstances, including:
- a breach of the director's duty of loyalty to the corporation, its
shareholders or its members,
- an act or omission not in good faith or that involves intentional
misconduct or a knowing violation of the law,
- a transaction from which the director derived an improper benefit, or
- an act or omission for which the director's liability is expressly
provided for by statute.
Article Ten of Meridian's third amended and restated articles of
incorporation provides that our directors are not liable to us or to our
shareholders for monetary damages for an act or omission in their capacity as
director, subject to the above restrictions. These limitations on a director's
liability may not affect claims arising under the federal securities laws.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors and officers and controlling persons pursuant to
the foregoing provisions, we have been advised that, in the opinion of the SEC,
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
ITEM 16. EXHIBITS
<Table>
**1.1 -- Form of Debt Securities Underwriting Agreement.
**1.2 -- Form of Equity Securities Underwriting Agreement.
3.1 -- Third Amended and Restated Articles of Incorporation of
the Company (incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the three months ended
September 30, 1998).
3.2 -- Amended and Restated Bylaws of the Company (incorporated
by reference to the Company's Quarterly Report on Form
10-Q for the three months ended September 30, 1998).
3.3 -- Certificate of Designation for Series C Redeemable
Convertible Preferred Stock dated March 28, 2002
(incorporated by reference to Exhibit 3.1 of the
Company's Quarterly Report on Form 10-Q for the three
months ended March 31, 2002).
*3.4 -- Certificate of Incorporation of The Meridian Resource
Corporation (a Delaware corporation formerly known as
Texas Meridian Finance Corporation), as amended.
*3.5 -- Bylaws of The Meridian Resource Corporation (a Delaware
corporation formerly known as Texas Meridian Finance
Corporation).
*3.6 -- Certificate of Incorporation of Cairn Energy USA, Inc.,
as amended.
*3.7 -- Bylaws of Cairn Energy USA, Inc.
*3.8 -- Certificate of Formation of The Meridian Resource &
Exploration LLC.
*3.9 -- Limited Liability Company Agreement of The Meridian
Resource & Exploration LLC.
*3.10 -- Certificate of Formation of Louisiana Onshore Properties
LLC.
*3.11 -- Limited Liability Company Agreement of Louisiana Onshore
Properties LLC.
4.1 -- Specimen Common Stock Certificate (incorporated by
reference to Exhibit 4.1 of the Company's Registration
Statement on Form S-1, as amended (Reg. No. 33-65504)).
</Table>
II-2
<Table>
4.2 -- Common Stock Purchase Warrant of the Company dated
October 16, 1990, issued to Joseph A. Reeves, Jr.
(incorporated by reference to Exhibit 10.8 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991, as amended by the Company's Form 8
filed March 4, 1993).
4.3 -- Common Stock Purchase Warrant of the Company dated
October 16, 1990, issued to Michael J. Mayell
(incorporated by reference to Exhibit 10.9 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991, as amended by the Company's Form 8
filed March 4, 1993).
4.4 -- Registration Rights Agreement dated October 16, 1990,
among the Company, Joseph A. Reeves, Jr. and Michael J.
Mayell (incorporated by reference to Exhibit 10.7 of the
Company's Registration Statement on Form S-4, as amended
(Reg. No. 33-37488)).
4.5 -- Warrant Agreement dated June 7, 1994, between the Company
and Joseph A. Reeves, Jr. (incorporated by reference to
Exhibit 4.1 of the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1994).
4.6 -- Warrant Agreement dated June 7, 1994, between the Company
and Michael J. Mayell (incorporated by reference to
Exhibit 4.1 of the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1994).
4.7 -- Credit Agreement, dated August 13, 2002, among the
Company, Societe Generale, as Administrative Agent, Lead
Arranger and Bookrunner, Fortis Capital Corp., as Co-Lead
Arranger and Documentation Agent, and the several lenders
from time to time parties thereto (incorporated by
reference to Exhibit 10.1 to the Company's Current Report
on Form 8-K dated August 13, 2002).
4.8 -- The Meridian Resource Corporation Directors' Stock Option
Plan (incorporated by reference to Exhibit 10.5 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991, as amended by the Company's Form 8
filed March 4, 1993).
4.9 -- Amendment No. 1, dated as of January 29, 2001, to Rights
Agreement, dated as of May 5, 1999, by and between the
Company and American Stock Transfer & Trust Co., as
rights agent (incorporated by reference from the
Company's Current Report on Form 8-K dated January 29,
2001).
4.10 -- First Amendment to Subordinated Credit Agreement, dated
December 5, 2001, between Meridian and Fortis Capital
Corp. (incorporated by reference to Exhibit 4.17 of the
Company's Registration Statement on Form S-3, as amended
(Reg. No. 333-75414)).
*4.11 -- Form of Senior Debt Securities Indenture.
*4.12 -- Form of Subordinated Debt Securities Indenture.
*5.1 -- Opinion of Fulbright & Jaworski L.L.P. as to the legality
of the securities.
**8.1 -- Opinion of Fulbright & Jaworski L.L.P. as to certain
federal income tax matters.
*12.1 -- Computation of Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges Plus Preferred Stock
Dividend Requirements.
21.1 -- Subsidiaries of Meridian (incorporated by reference to
Exhibit 21.1 of Meridian's Annual Report on Form 10-K for
the year ended December 31, 1998).
*23.1 -- Consent of Ernst & Young LLP.
*23.2 -- Consent of T. J. Smith & Company, Inc.
*23.3 -- Consent of BDO Seidman LLP.
</Table>
II-3
<Table>
*24.1 -- Power of attorney (contained on the signature pages of
this Registration Statement).
**25.1 -- Form T-1 Statement of Eligibility of Trustee for the
Senior Debt Securities.
**25.2 -- Form T-1 Statement of Eligibility of Trustee for the
Subordinated Debt Securities.
</Table>
- ---------------
* Previously filed.
** To be filed as an exhibit to our Current Report on Form 8-K or other SEC
filing in connection with an applicable offering.
ITEM 17. UNDERTAKINGS
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of the prospectus
filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(c) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to the information in this registration statement;
provided, however, that paragraphs A(l)(a) and A(l)(b) above do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each of the post-effective amendments shall be deemed to be
a new registration statement relating to the securities offered therein,
and the offering of the securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, the filing of our annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of the
securities at that time shall be deemed to be the initial bona fide offering
thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the provisions described in Item 15
II-4
above, or otherwise, that registrant has been advised that in the opinion of the
SEC that indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against any liability (other than the payment by a registrant of
expenses incurred or paid by a director, officer, or controlling person of a
registrant in the successful defense of any action, suit or proceeding) is
asserted by a director, officer, or controlling person in connection with the
securities being registered, that registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of the issue.
D. The undersigned registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus or any
prospectus supplement filed as part of this registration statement in
reliance on Rule 430A and contained in a form of prospectus or prospectus
supplement filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus or prospectus supplement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
E. The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act (the "Act") in
accordance with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Act.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we certify that
we have reasonable grounds to believe that we meet all of the requirements for
filing on Form S-3 and have duly caused this Amendment No. 1 to this
registration statement to be signed on our behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas on July 6, 2004.
THE MERIDIAN RESOURCE CORPORATION
By: /s/ JOSEPH A. REEVES, JR.
------------------------------------
Joseph A. Reeves, Jr.,
Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in their respective
capacities on July 6, 2004.
<Table>
<Caption>
NAME TITLE
---- -----
* Chief Executive Officer (Principal Executive
- --------------------------------------------------- Officer), Director and Chairman of the Board
Joseph A. Reeves, Jr.
* President and Director
- ---------------------------------------------------
Michael J. Mayell
/s/ LLOYD V. DELANO Senior Vice President and Chief Accounting
- --------------------------------------------------- Officer (Principal Financial and Accounting
Lloyd V. DeLano Officer)
* Director
- ---------------------------------------------------
James T. Bond
* Director
- ---------------------------------------------------
E. L. Henry
* Director
- ---------------------------------------------------
Gary A. Messersmith
* Director
- ---------------------------------------------------
Joe E. Kares
* Director
- ---------------------------------------------------
David W. Tauber
*By: /s/ LLOYD V. DELANO
------------------------------------------------
Attorney-in-fact
</Table>
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we certify that
we have reasonable grounds to believe that we meet all of the requirements for
filing on Form S-3 and have duly caused this Amendment No. 1 to this
registration statement to be signed on our behalf by the undersigned, thereunto
duly authorized in the City of Houston, State of Texas, on July 6, 2004.
THE MERIDIAN RESOURCE & EXPLORATION
LLC
By: /s/ MICHAEL J. MAYELL
------------------------------------
Michael J. Mayell
President and Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on July 6, 2004.
<Table>
<Caption>
NAME TITLE
---- -----
* Chairman of the Board, Chief Executive Officer
- --------------------------------------------------- and Manager (Principal Executive Officer)
Joseph A. Reeves, Jr.
* President, Chief Operating Officer and Manager
- ---------------------------------------------------
Michael J. Mayell
/s/ LLOYD V. DELANO Senior Vice President and Chief Accounting
- --------------------------------------------------- Officer (Principal Financial and Accounting
Lloyd V. DeLano Officer)
*By: /s/ LLOYD V. DELANO
------------------------------------------------
Attorney-in-fact
</Table>
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we certify that
we have reasonable grounds to believe that we meet all of the requirements for
filing on Form S-3 and have duly caused this Amendment No. 1 to this
registration statement to be signed on our behalf by the undersigned, thereunto
duly authorized in the City of Houston, State of Texas, on July 6, 2004.
THE MERIDIAN RESOURCE CORPORATION
(DELAWARE)
By: /s/ MICHAEL J. MAYELL
------------------------------------
Michael J. Mayell
President and Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on July 6, 2004.
<Table>
<Caption>
NAME TITLE
---- -----
* Chairman of the Board, Chief Executive Officer
- --------------------------------------------------- and Director (Principal Executive Officer)
Joseph A. Reeves, Jr.
* President, Chief Operating Officer and Director
- ---------------------------------------------------
Michael J. Mayell
/s/ LLOYD V. DELANO Senior Vice President and Chief Accounting
- --------------------------------------------------- Officer (Principal Financial and Accounting
Lloyd V. DeLano Officer)
*By: /s/ LLOYD V. DELANO
------------------------------------------------
Attorney-in-fact
</Table>
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we certify that
we have reasonable grounds to believe that we meet all of the requirements for
filing on Form S-3 and have duly caused this Amendment No. 1 to this
registration statement to be signed on our behalf by the undersigned, thereunto
duly authorized in the City of Houston, State of Texas, on July 6, 2004.
LOUISIANA ONSHORE PROPERTIES LLC
By: /s/ MICHAEL J. MAYELL
------------------------------------
Michael J. Mayell
President and Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on July 6, 2004.
<Table>
<Caption>
NAME TITLE
---- -----
* Chairman of the Board, Chief Executive Officer
- --------------------------------------------------- and Manager (Principal Executive Officer)
Joseph A. Reeves, Jr.
* President, Chief Operating Officer and Manager
- ---------------------------------------------------
Michael J. Mayell
/s/ LLOYD V. DELANO Senior Vice President and Chief Accounting
- --------------------------------------------------- Officer (Principal Financial and Accounting
Lloyd V. DeLano Officer)
*By: /s/ LLOYD V. DELANO
------------------------------------------------
Attorney-in-fact
</Table>
II-9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we certify that
we have reasonable grounds to believe that we meet all of the requirements for
filing on Form S-3 and have duly caused this Amendment No. 1 to this
registration statement to be signed on our behalf by the undersigned, thereunto
duly authorized in the City of Houston, State of Texas, on July 6, 2004.
CAIRN ENERGY USA, INC.
By: /s/ MICHAEL J. MAYELL
------------------------------------
Michael J. Mayell
President and Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on July 6, 2004.
<Table>
<Caption>
NAME TITLE
---- -----
* Chairman of the Board, Chief Executive Officer
- --------------------------------------------------- and Director (Principal Executive Officer)
Joseph A. Reeves, Jr.
* President, Chief Operating Officer and Director
- ---------------------------------------------------
Michael J. Mayell
/s/ LLOYD V. DELANO Senior Vice President and Chief Accounting
- --------------------------------------------------- Officer (Principal Financial and Accounting
Lloyd V. DeLano Officer)
*By: /s/ LLOYD V. DELANO
------------------------------------------------
Attorney-in-fact
</Table>
II-10
EXHIBIT INDEX
<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION
------- -----------
**1.1 -- Form of Debt Securities Underwriting Agreement
**1.2 -- Form of Equity Securities Underwriting Agreement
3.1 -- Third Amended and Restated Articles of Incorporation of
the Company (incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the three months ended
September 30, 1998).
3.2 -- Amended and Restated Bylaws of the Company (incorporated
by reference to the Company's Quarterly Report on Form
10-Q for the three months ended September 30, 1998).
3.3 -- Certificate of Designation for Series C Redeemable
Convertible Preferred Stock dated March 28, 2002
(incorporated by reference to Exhibit 3.1 of the
Company's Quarterly Report on Form 10-Q for the three
months ended March 31, 2002).
*3.4 -- Certificate of Incorporation of The Meridian Resource
Corporation (a Delaware corporation formerly known as
Texas Meridian Finance Corporation), as amended.
*3.5 -- Bylaws of The Meridian Resource Corporation (a Delaware
corporation formerly known as Texas Meridian Finance
Corporation).
*3.6 -- Certificate of Incorporation of Cairn Energy USA, Inc.,
as amended.
*3.7 -- Bylaws of Cairn Energy USA, Inc.
*3.8 -- Certificate of Formation of The Meridian Resource &
Exploration LLC.
*3.9 -- Limited Liability Company Agreement of The Meridian
Resource & Exploration LLC.
*3.10 -- Certificate of Formation of Louisiana Onshore Properties
LLC.
*3.11 -- Limited Liability Company Agreement of Louisiana Onshore
Properties LLC.
4.1 -- Specimen Common Stock Certificate (incorporated by
reference to Exhibit 4.1 of the Company's Registration
Statement on Form S-1, as amended (Reg. No. 33-65504)).
4.2 -- Common Stock Purchase Warrant of the Company dated
October 16, 1990, issued to Joseph A. Reeves, Jr.
(incorporated by reference to Exhibit 10.8 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991, as amended by the Company's Form 8
filed March 4, 1993).
4.3 -- Common Stock Purchase Warrant of the Company dated
October 16, 1990, issued to Michael J. Mayell
(incorporated by reference to Exhibit 10.9 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991, as amended by the Company's Form 8
filed March 4, 1993).
4.4 -- Registration Rights Agreement dated October 16, 1990,
among the Company, Joseph A. Reeves, Jr. and Michael J.
Mayell (incorporated by reference to Exhibit 10.7 of the
Company's Registration Statement on Form S-4, as amended
(Reg. No. 33-37488)).
4.5 -- Warrant Agreement dated June 7, 1994, between the Company
and Joseph A. Reeves, Jr. (incorporated by reference to
Exhibit 4.1 of the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1994).
4.6 -- Warrant Agreement dated June 7, 1994, between the Company
and Michael J. Mayell (incorporated by reference to
Exhibit 4.1 of the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1994).
</Table>
<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION
------- -----------
4.7 -- Credit Agreement, dated August 13, 2002, among the
Company, Societe Generale, as Administrative Agent, Lead
Arranger and Bookrunner, Fortis Capital Corp., as Co-Lead
Arranger and Documentation Agent, and the several lenders
from time to time parties thereto (incorporated by
reference to Exhibit 10.1 to the Company's Current Report
on Form 8-K dated August 13, 2002).
4.8 -- The Meridian Resource Corporation Directors' Stock Option
Plan (incorporated by reference to Exhibit 10.5 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991, as amended by the Company's Form 8
filed March 4, 1993).
4.9 -- Amendment No. 1, dated as of January 29, 2001, to Rights
Agreement, dated as of May 5, 1999, by and between the
Company and American Stock Transfer & Trust Co., as
rights agent (incorporated by reference from the
Company's Current Report on Form 8-K dated January 29,
2001).
4.10 -- First Amendment to Subordinated Credit Agreement, dated
December 5, 2001, between Meridian and Fortis Capital
Corp. (incorporated by reference to Exhibit 4.17 of the
Company's Registration Statement on Form S-3, as amended
(Reg. No. 333-75414)).
*4.11 -- Form of Senior Debt Securities Indenture.
*4.12 -- Form of Subordinated Debt Securities Indenture.
*5.1 -- Opinion of Fulbright & Jaworski L.L.P. as to the legality
of the securities.
**8.1 -- Opinion of Fulbright & Jaworski L.L.P. as to certain
federal income tax matters.
*12.1 -- Computation of Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges Plus Preferred Stock
Dividend Requirements.
21.1 -- Subsidiaries of Meridian (incorporated by reference to
Exhibit 21.1 of Meridian's Annual Report on Form 10-K for
the year ended December 31, 1998).
*23.1 -- Consent of Ernst & Young LLP.
*23.2 -- Consent of T. J. Smith & Company, Inc.
*23.3 -- Consent of BDO Seidman LLP.
*24.1 -- Power of attorney (contained on the signature pages of
this Registration Statement).
**25.1 -- Form T-1 Statement of Eligibility of Trustee for the
Senior Debt Securities.
**25.2 -- Form T-1 Statement of Eligibility of Trustee for the
Subordinated Debt Securities.
</Table>
- ---------------
* Previously filed.
** To be filed as an exhibit to our Current Report on Form 8-K or other SEC
filing in connection with an applicable offering.