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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 4, 1994
SEAGULL ENERGY CORPORATION
______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Texas
______________________________________________________________________________
(State or other jurisdiction of incorporation)
1-8094 74-1764876
___________________________________ ________________________________________
(Commission File Number) (IRS Employer Identification No.)
1001 Fannin, Suite 1700, Houston, Texas 77002-6714
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(Address of principal executive offices) (Zip Code)
(713) 951-4700
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Registrant's telephone number, including area code
Not Applicable
______________________________________________________________________________
(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 4, 1994, an indirect wholly owned subsidiary of Seagull
Energy Corporation ("Seagull" or the "Company") acquired all of the outstanding
shares of stock (the "Stock") of Novalta Resources Inc. ("Novalta") and an
intercompany note (the "Note") from Novalta to its parent, Novacor
Petrochemicals Ltd. ("Novacor Petrochemicals"). The Stock and the Note were
acquired for a purchase price of approximately $203 million in cash, subject to
customary post-closing adjustments described below (the "Seagull Canada
Acquisition"). The economic effective date of the Seagull Canada Acquisition
was December 31, 1993 (the "Effective Date"). Effective as of the January 4,
1994 Closing Date, Novalta was amalgamated with one of its subsidiaries along
with Seagull Energy Canada Ltd., the indirect subsidiary of Seagull that
acquired Novalta. The resulting amalgamated company was named Seagull Energy
Canada Ltd. ("Seagull Canada"). As a result of the amalgamation, the Note was
extinguished. See "Purchase Price" and "Financing" below. References to
dollars throughout this Current Report on Form 8-K refer to U. S. dollars
unless otherwise noted.
SEAGULL CANADA PROPERTIES
Seagull Canada's assets (the "Seagull Canada Properties") consist
primarily of natural gas and oil reserves and developed and undeveloped lease
acreage concentrated principally in a small number of fields located in
Alberta, Canada. Seagull estimates that the Seagull Canada Acquisition
provided proved reserves of approximately 244 billion cubic feet of natural gas
and about 2.8 million barrels of oil, condensate and natural gas liquids as of
the Effective Date. Approximately 80 percent of these reserves and 75 percent
of Seagull Canada's total producing wells are concentrated in 16 of 95 total
fields. As of December 31, 1993, the Seagull Canada Properties consisted of
lease acreage holdings including approximately 200,000 net developed acres and
approximately 250,000 net undeveloped acres.
PURCHASE PRICE
The purchase price was determined pursuant to arm's-length
negotiations between Seagull and Novacor Petrochemicals, based on an economic
effective date of December 31, 1993. The $203 million purchase price for the
Stock and the Note is subject to certain customary post-closing adjustments for
working capital and capital expenditures for 1993 in excess of a specified
threshold pursuant to the provisions of the Sale Agreement, dated November 19,
1993, between Seagull and Novacor Petrochemicals.
FINANCING
The Seagull Canada Acquisition was financed primarily with a new $175
Million reducing revolving credit facility (the "Canadian Credit Agreement"),
as well as borrowings under Seagull's amended and restated $475 million
revolving credit facility (the "Revolver") with a group of major U. S. and
international banks. The Canadian Credit Agreement between Seagull Canada and
10 Canadian affiliates of major U. S. and international banks provides for dual
currency borrowings in U. S. and Canadian dollars with a nominated maximum
borrowing availability of $160 million , which may be increased or decreased by
the Company at any time pursuant to provisions of the Canadian Credit
Agreement, up to the maximum commitment of $175 million.
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The Canadian Credit Agreement matures on December 31, 1999 and commitments
thereunder begin to decline on March 31, 1996 in equal quarterly reductions
of $10,937,500. As of January 4, 1994, immediately following the Seagull
Canada Acquisition, approximately $152 million in borrowings were outstanding
under this facility, which are currently denominated in Canadian dollars.
Borrowings outstanding under the Canadian Credit Agreement funded in
U. S. dollars bear interest, at Seagull Canada's option, at a rate equal to (i)
either one, two, three or six month Adjusted LIBOR, plus a margin (the "LIBOR
Margin") or (ii) the Reference Rate, plus a margin (the "Prime Margin"). The
"Reference Rate" is the greater of (i) 0.5% per annum above the daily federal
funds rate or (ii) the prime rate of the agent bank. The LIBOR Margin ranges
from 0.625% to 2.5% per annum, depending upon Seagull's credit rating and
consolidated Debt to Capitalization Ratio (as defined under the Revolver), and
the Prime Margin ranges from 0% to 1.5% per annum, depending upon the same
factors. Borrowings outstanding in Canadian dollars bear interest, at Seagull
Canada's option, at a rate equal to (i) either one, two, three or six month
Bankers' Acceptance Rate plus the LIBOR Margin or (ii) the Paying Agent's prime
rate plus the Prime Margin.
In connection with the consummation of the Seagull Canada Acquisition,
the Revolver was amended to allow for the incurrence of debt by Seagull Canada
under the Canadian Credit Agreement and to allow Seagull to guarantee such
debt. As an additional amendment to the Revolver, the "Borrowing Base" was
increased to $610 million to provide for value attributed to Seagull Canada's
proved reserves. The Borrowing Base is based upon the value of the proved
reserves of the Company's exploration and production segment and the financial
performance of the Company's other business segments as provided for under the
Revolver, and limits the total amount of senior indebtedness available to the
Company.
The available commitment under the Revolver is subject to the
Borrowing Base and is determined after consideration of outstanding borrowings
under Seagull's other senior debt facilities. As of January 4, 1994,
immediately following the Seagull Canada Acquisition, borrowings outstanding
under the Revolver were $188.5 million, leaving immediately available unused
commitments of approximately $149.3 million, net of outstanding letters of
credit of $2.2 million, $100 million of borrowings outstanding under Seagull's
senior notes, the nominated maximum borrowing availability of $160 million
under the Canadian Credit Agreement, and $10 million in borrowings outstanding
under one of Seagull's money market facilities.
The Revolver and the Canadian Credit Agreement are unsecured credit
facilities. Both facilities contain restrictive provisions regarding the
incurrence of additional debt, the making of investments outside of existing
lines of business, the maintenance of certain financial levels (based upon
Seagull's consolidated financial condition and results of operations), the
incurrence of additional liens, the declaration or payment of dividends (other
than dividends payable solely in the form of additional shares of the Company's
common stock) and the repurchase or redemption of capital stock.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
It is impracticable to file the financial statements requiredto be
provided by Item 7(a) of Form 8-K at this time. The financial
statements of Novalta will be filed under cover of Form 8-KA as
soon as practicable, but not later than March 20, 1994.
(b) Pro Forma Financial Information.
It is impracticable to file pro forma financial statements required
to be provided by Item 7(b) of Form 8-K at this time. The pro forma
financial statements will be filed under cover of Form 8-KA as soon
as practicable, but not later than March 20, 1994.
(c) Exhibits.
*2.1 Sale Agreement made and entered into as of November
19, 1993 between Novacor Petrochemicals Ltd. and
Seagull Energy Corporation (including Appendix J,
"Tax Provisions").
*2.2 Guarantee executed in connection with Sale Agreement
included as Exhibit 2.1 hereto.
*2.3 First Amendment to Amended and Restated Credit
Agreement dated December 30, 1993 by and among
Seagull, each of the banks signatory thereto, and
Texas Commerce Bank National Association, as agent
(without exhibits and schedules).
*2.4 Credit Agreement, U. S. $175 Million Reducing
Revolving Credit Facility, dated December 30, 1993 by
and among Seagull Energy Canada Ltd., each of the
banks signatory thereto, and Chemical Bank of Canada,
The Bank of Nova Scotia and Canadian Imperial Bank of
Commerce, as co-agents (without exhibits).
*2.5 Form of Revolving Credit Loan Note (U. S. Dollars)
executed in connection with the Credit Agreement
included as Exhibit 2.4 hereto.
*2.6 Form of Revolving Credit Loan Note (Canadian Dollars)
executed in connection with the Credit Agreement
included as Exhibit 2.4 hereto.
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*2.7 Intercreditor Agreement executed in connection with
the Credit Agreement included as Exhibit 2.4 hereto.
*2.8 Form of Bankers' Acceptance executed in connection
with the Credit Agreement included as Exhibit 2.4
hereto.
*2.9 Guarantee executed in connection with the Credit
Agreement included as Exhibit 2.4 hereto.
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* Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: January 19, 1994
SEAGULL ENERGY CORPORATION
By: Rodney W. Bridges
Rodney W. Bridges
Vice President and Controller
(Principal Accounting Officer)
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EXHIBIT INDEX
Page
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*2.1 Sale Agreement made and entered into as of November 19, 1993 between Novacor Petrochemicals Ltd. and
Seagull Energy Corporation (including Appendix J, "Tax Provisions").
*2.2 Guarantee executed in connection with Sale Agreement included as Exhibit 2.1 hereto.
*2.3 First Amendment to Amended and Restated Credit Agreement dated December 30, 1993 by and among Seagull,
each of the banks signatory thereto, and Texas Commerce Bank National Association, as agent (without
exhibits and schedules).
*2.4 Credit Agreement, U. S. $175 Million Reducing Revolving Credit Facility, dated December 30, 1993 by and
among Seagull Energy Canada Ltd., each of the banks signatory thereto, and Chemical Bank of Canada, The
Bank of Nova Scotia and Canadian Imperial Bank of Commerce, as co-agents (without exhibits).
*2.5 Form of Revolving Credit Loan Note (U. S. Dollars) executed in connection with the Credit Agreement
included as Exhibit 2.4 hereto.
*2.6 Form of Revolving Credit Loan Note (Canadian Dollars) executed in connection with the Credit Agreement
included as Exhibit 2.4 hereto.
*2.7 Intercreditor Agreement executed in connection with the Credit Agreement included as Exhibit 2.4 hereto.
*2.8 Form of Bankers' Acceptance executed in connection with the Credit Agreement included as Exhibit 2.4
hereto.
*2.9 Guarantee executed in connection with the Credit Agreement included as Exhibit 2.4 hereto.
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* Filed herewith.
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