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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 6, 1995
SOUTHERN MINERAL CORPORATION
________________________________________________________________________________
(Exact name of registrant as specified in charter)
Nevada 0-8043 36-2068676
________________________________________________________________________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
17001 Northchase, Suite 690, Houston, Texas 77060-2138
________________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 872-7621
________________________________________________________________________________
(Former name or former address, if changed since last report.)
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Item 7. Financial Statements, Proforma Financial Information and Exhibits
(a) Financial Statements of Business Acquired
The audited financial statements for Diverse GP III ("DGP III"), a Texas
general partnership of which an undivided 15% interest is the sole asset of SMC
Production Co., formerly named Diverse Production Co. ("DPC"), are filed as a
part of the originally filed Form 8-K dated April 6, 1995. The Registrant
considers its purchase of DPC to be an acquisition of DPC's 15% investment in
DGP III. DPC's other assets and operations were sold or otherwise disposed of
before the Registrant's April 6, 1995 acquisition of DPC. Because such other
assets and operations are not relevant to the interests acquired by the
Registrant, historical financial information for DPC is not included herein.
The Registrant is not aware of any other DPC assets, liabilities, or contingent
liabilities other than the 15% investment in DGP III.
(b) Pro Forma Financial Information
On April 6, 1995, the Registrant consummated the transactions contemplated
by an Exchange Agreement executed March 2, 1995 by and among DPC, the
shareholders of DPC and the Registrant (the "Agreement"). DPC's sole asset is
its investment in 15% of DGP III, which is engaged in the acquisition,
exploitation and production of oil and gas reserves. Before April 6, 1995, DPC
and DGP III had the same beneficial owners. Pursuant to the Agreement, the
Registrant issued 2,193,919 shares of its common stock and granted options for
the purchase of 325,000 of its common stock to the DPC shareholders in exchange
for all of DPC's capital stock. The stock options granted under the Agreement
are exercisable at any time before April 7, 2000 at a purchase price of $1.25
per share. The Registrant will account for this acquisition as a purchase and
record the transaction at a purchase price of $1.00 per share, the average
trade price of a share of the Registrant's common stock as reported on the
NASDAQ SmallCap Market during the period March 30, 1995 to April 13, 1995.
The unaudited pro forma condensed consolidated balance sheet as of March 31,
1995 and the unaudited pro forma condensed consolidated statements of
operations for the twelve months and three months ended December 31, 1994 and
March 31, 1995, respectively, are consolidations of such statements of the
Registrant and DPC under the assumptions set forth below in the accompanying
notes and are subject to change. In addition, the Registrant considers its
purchase of DPC to be an acquisition of DPC's 15% investment in DGP III. DPC
sold or otherwise disposed of its other assets and operations before the April
6, 1995 consummation of the transactions contemplated by the Agreement.
Because such other assets and operations are not relevant to the interests
acquired by the Registrant, such financial information for DPC is not included
herein. The Registrant is not aware of any other DPC assets, liabilities, or
contingent liabilities other than the 15% investment in DGP III.
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The unaudited pro forma condensed consolidated balance sheet as of March 31,
1995 presents the acquisition of DPC as if it had occurred at March 31, 1995,
while the unaudited condensed consolidated statements of operations for the
twelve months ended December 31, 1994 and three months ended March 31, 1995
present the transaction as if it had occurred at January 1, 1994.
The unaudited pro forma financial statements should be read in conjunction
with the separate financial statements and notes thereto of DGP III included in
the Registrant's originally filed report on Form 8-K dated April 6, 1995 and
the Registrant's financial statements and notes thereto included in its
previously filed Form 10-K for its fiscal year ended December 31, 1994 and Form
10-QSB for its fiscal quarter ended March 31, 1995. The unaudited pro forma
financial statements are not necessarily indicative of the financial position
or results of operations of the consolidated companies that might have occurred
or as it may be in the future.
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Index to Unaudited Pro Forma Financial Statements
Page Number
Pro Forma Condensed Consolidated Balance Sheet as of
March 31, 1995 5
Pro Forma Condensed Consolidated Statement of
Operations for the Twelve Months Ended
December 31, 1994 6
Pro Forma Condensed Consolidated Statement of
Operations for the Three Months Ended
March 31, 1995 7
Notes to Pro Forma Condensed Consolidated Financial
Statements for the Balance Sheet as of March 31, 1995,
the Statement of Operations for the Twelve Months
Ended December 31, 1994 and the Statement of
Operations for the Three Months Ended March 31, 1995 8
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SOUTHERN MINERAL CORPORATION
PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
As of March 31, 1995
(Unaudited)
(000's Omitted)
Pro Forma
Adjustments
Southern SMC --------------
Mineral Production Note Pro Forma
Corporation Co. (1) Amount Ref. Consolidated
----------- ---------- ------ ---- ------------
ASSETS
Current Assets
Cash and cash equivalents $51 $96 -- $147
Marketable securities 1,499 -- -- 1,499
Receivables 204 126 -- 330
Other 60 -- -- 60
------ ---- ------ ------
Total Current Assets 1,814 222 -- 2,036
------ ---- ------ ------
Property and Equipment, net 1,344 751 1,315 (2) 3,486
76 (3)
Other Assets 42 4 -- 46
------ ---- ------ ------
$3,200 $977 $1,391 $5,568
====== ==== ====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $185 $99 76 (3) $360
------ ---- ------ ------
Total Current Liabilities 185 99 76 360
------ ---- ------ ------
Deferred Income Taxes -- -- -- --
Stockholders' Equity
Common Stock 42 13 22 (2) 64
(13) (4)
Additional paid-in capital 853 804 2,171 (2) 3,024
(804) (4)
Retained earnings 2,167 61 (61) (4) 2,167
------ ---- ------ ------
3,062 878 1,315 5,255
Treasury stock (47) -- -- (47)
------ ---- ------ ------
Total Stockholders' Equity 3,015 878 1,315 5,208
------ ---- ------ ------
$3,200 $977 $1,391 $5,568
====== ==== ====== ======
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SOUTHERN MINERAL CORPORATION
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
For the Twelve Months Ended December 31, 1994
(Unaudited)
(000's Omitted, Except for Share and Per
Share Amounts)
Pro Forma
Adjustments
Southern SMC ---------------
Mineral Production Note Pro Forma
Corporation Co. (1) Amount Ref. Consolidated
----------- ---------- ------ ----- ------------
Revenues
Oil and gas $1,747 $835 -- $2,582
Interest 56 -- -- 56
Other 86 131 -- 217
--------- ---- ---- ---------
1,889 966 -- 2,855
--------- ---- ---- ---------
Expenses
Production 548 401 -- 949
Exploration 1,566 6 -- 1,572
Depletion and depreciation 704 192 83 (5) 979
Valuation reduction 1,724 -- -- 1,724
General and administrative 903 43 -- 946
Other 135 -- -- 135
--------- ---- ---- ---------
5,580 642 83 6,305
--------- ---- ---- ---------
Net income (loss) before
income taxes (3,691) 324 (83) (3,450)
Income tax benefit (558) -- -- (6) (558)
--------- ---- ---- ---------
Net income (loss) ($3,133) $324 ($83) ($2,892)
========= ==== ==== =========
Net loss per share ($0.78) ($0.46)
========= =========
Average common and common
equivalent shares outstanding 4,024,421 6,268,340
========= =========
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SOUTHERN MINERAL CORPORATION
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 1995
(Unaudited)
(000's Omitted, Except for Share and Per
Share Amounts)
Pro Forma
Adjustments
Southern SMC ---------------
Mineral Production Note Pro Forma
Corporation Co. (1) Amount Ref. Consolidated
----------- ---------- ------ ----- ------------
Revenues
Oil and gas $442 $197 -- $639
Interest 21 -- -- 21
Other 9 53 -- 62
--------- --- ---- ---------
472 250 -- 722
--------- --- ---- ---------
Expenses
Production 93 124 -- 217
Exploration 165 -- -- 165
Depletion and depreciation 101 51 19 (5) 171
Valuation reduction -- -- -- --
General and administrative 214 14 -- 228
Other -- -- -- --
--------- --- ---- ---------
573 189 19 781
--------- --- ---- ---------
Net income (loss) before
income taxes (101) 61 (19) (59)
Income tax benefit -- -- -- (6) --
--------- --- ---- ---------
Net income (loss) ($101) $61 ($19) ($59)
========= === ==== =========
Net income (loss) per share ($0.02) ($0.01)
========= =========
Average common and common
equivalent shares outstanding 4,074,421 6,268,340
========= =========
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Southern Mineral Corporation
Notes to Pro Forma Condensed Consolidated Financial Statements
for the Balance Sheet As of March 31, 1995,
for the Statement of Operations for the Twelve Months
Ended December 31, 1994 and for the Statement of
Operations for the Three Months Ended March 31, 1995
(Unaudited)
Note 1: The sole asset of SMC Production Co., formerly named Diverse
Production Co. ("DPC") is its undivided 15% interest in Diverse GP
III ("DGP III"), a Texas general partnership engaged in the
acquisition, exploitation and production of oil and gas reserves.
The financial statements of DPC presented herein have been compiled
based on its 15% investment in DGP III.
Note 2: Reflects shares issued by Registrant for all of the outstanding
capital stock of DPC.
Note 3: Reflects additional acquisition costs incurred by Registrant for DPC.
The Registrant had recorded approximately $78,000 of such costs in
its March 31, 1995 balance sheet.
Note 4: To eliminate DPC's equity.
Note 5: To record the increase in depletion and depreciation expense as a
result of the increase in the carrying value of property and
equipment attributable to the investment in DGP III.
Note 6: For the pro forma results of the twelve months ended December 31,
1994 and of the three months ended March 31, 1995 the income tax
benefit was limited by the Registrant's inability to recognize all of
the tax benefits of its net operating loss ("NOL") and future
deductible temporary differences in the calculation of its tax
expense under Statement of Financial Accounting Standards No. 109.
However, these amounts are expected to be available to reduce future
tax liabilities in years in which the Registrant has taxable
earnings. As reported in its Form 10-K for the year ended December
31, 1994, the Registrant estimated that for Federal tax purposes, it
had NOL carryforwards of approximately $1,987,000 which are available
to offset future Federal taxable income through 2010. If the DPC
acquisition had occurred at January 1, 1994, the Registrant estimates
that its NOL carryforward for Federal tax purposes at March 31, 1995
would approximate $1,460,000.
Note 7: Sales of oil and gas hydrocarbons are the Registrant's principal
source of revenues and cash flows. Future sales of such products are
dependent on the Registrant's ownership of currently producing oil
and gas reserves and its primary business activity, which is the
acquisition, exploitation and production of oil and gas reserves.
Registrant's acquisition of a 15% interest in DGP III through its
acquisition of DPC has significantly increased the Registrant's
proven reserves. The table below sets out the Registrant's proven
reserve quantities and standardized measure of discounted future net
cash flows as if the acquisition of DPC had occurred effective
December 31, 1994 and has been prepared using the information
contained in Note 7 of the notes to the financial statements of
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DGP III as of December 31, 1994 included in the Registrant's
originally filed Form 8-K dated April 6, 1995, and Note 10 of the
notes to the financial statements included in the Registrant's
Form 10-K for the year ended December 31, 1994 previously filed with
the Securities and Exchange Commission. Accordingly, the following
information is subject to the limitations, qualifications and other
information disclosed in such financial statement notes.
Southern SMC
Mineral Production Pro Forma
Corporation Co. (A) Consolidated
------------ ---------- ------------
Proved Reserve Quantities:
Oil and Natural Gas Liquids (BBLs) 228,000 185,000 413,000
========== ========== ==========
Natural Gas (MMCF) 786,000 1,960,000 2,746,000
========== ========== ==========
Standardized measure of discounted
future net cash flows $2,334,000 $2,382,000 $4,716,000
========== ========== ==========
(A) For "Proved Reserve Quantities", represents 15% of the amount
of the line indicated as Proved Developed and Undeveloped
Reserves (at) December 31, 1994 set forth in the section
titled "Estimated Quantities of Proved Oil and Gas Reserves
(Unaudited)" in Note 7 to DGP III's financial statements
included in Registrant's originally filed Form 8-K dated April
6, 1995. For the "Standardized measure of discounted future
net cash flows", represents 15% of the amount of such
indicated line set forth in the section titled "Standardized
Measure of Discounted Future Net Cash Flows Relating to Proved
Oil & Gas Reserves - (Unaudited)" in Note 7 to DGP III's
financial statements included in Registrant's originally filed
Form 8-K dated April 6, 1995.
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Exhibits
(10) (i) Exchange Agreement by and among Diverse Production Co., the
Shareholders of Diverse Production Co., and Southern Mineral
Corporation dated March 2, 1995 (incorporated by reference to
Exhibit (a) (10)(i) of Item 14, Part IV of the Registrant's
Annual Report on Form 10-K for the year ended December 31,
1994).
(1) Stock Option Agreement dated April 6, 1995 between Southern
Mineral Corporation and B. Travis Basham (previously filed
with original Form 8-K dated April 6, 1995).
(2) Stock Option Agreement dated April 6, 1995 between Southern
Mineral Corporation and Venucot Inc. (previously filed with
original Form 8-K dated April 6, 1995).
(3) Stock Option Agreement dated April 6, 1995 between Southern
Mineral Corporation and Thomas R. Fuller (previously filed
with original Form 8-K dated April 6, 1995).
(4) Stock Option Agreement dated April 6, 1995 between Southern
Mineral Corporation and Michmatt, Inc. (previously filed with
original Form 8-K dated April 6, 1995).
(5) Stock Option Agreement dated April 6, 1995 between Southern
Mineral Corporation and Donald H. Wiese, Jr. (previously filed
with original Form 8-K dated April 6, 1995).
(6) Stock Option Agreement dated April 6, 1995 between Southern
Mineral Corporation and DHW Energy, Inc. (previously filed
with original Form 8-K dated April 6, 1995).
(7) Stock Option Agreement dated April 6, 1995 between Southern
Mineral Corporation and Spencer L. Youngblood (previously
filed with original Form 8-K dated April 6, 1995).
(8) Stock Option Agreement dated April 6, 1995 between Southern
Mineral Corporation and Kona, Inc. (previously filed with
original Form 8-K dated April 6, 1995).
(9) Stock Option Agreement dated April 6, 1995 between Southern
Mineral Corporation and L. Todd Gremillion (previously filed
with original Form 8-K dated April 6, 1995).
(10) Registration Rights Agreement dated April 6, 1995 between
Southern Mineral Corporation and B. Travis Basham (previously
filed with original Form 8-K dated April 6, 1995).
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(11) Registration Rights Agreement dated April 6, 1995 between
Southern Mineral Corporation and Venucot, Inc. (previously
filed with original Form 8-K dated April 6, 1995).
(12) Registration Rights Agreement dated April 6, 1995 between
Southern Mineral Corporation and Thomas R. Fuller (previously
filed with original Form 8-K dated April 6, 1995).
(13) Registration Rights Agreement dated April 6, 1995 between
Southern Mineral Corporation and Michmatt, Inc. (previously
filed with original Form 8-K dated April 6, 1995).
(14) Registration Rights Agreement dated April 6, 1995 between
Southern Mineral Corporation and Donald H. Wiese, Jr.
(previously filed with original Form 8-K dated April 6, 1995).
(15) Registration Rights Agreement dated April 6, 1995 between
Southern Mineral Corporation and DHW Energy, Inc. (previously
filed with original Form 8-K dated April 6, 1995).
(16) Registration Rights Agreement dated April 6, 1995 between
Southern Mineral Corporation and Spencer L. Youngblood
(previously filed with original Form 8-K dated April 6, 1995).
(17) Registration Rights Agreement dated April 6, 1995 between
Southern Mineral Corporation and Kona, Inc. (previously filed
with original Form 8-K dated April 6, 1995).
(18) Registration Rights Agreement dated April 6, 1995 between
Southern Mineral Corporation and L. Todd Gremillion
(previously filed with original Form 8-K dated April 6, 1995).
(19) Stock Option Agreement dated April 6, 1995 between Southern
Mineral Corporation and Robert R. Hillery (previously filed
with original Form 8-K dated April 6, 1995).
(20) Diverse GP III General Partnership Agreement effective 29th
September, 1990, as amended (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.
SOUTHERN MINERAL CORPORATION
Date June 9, 1995 By /s/ JOHN MISITIGH
--------------------------------------
John Misitigh
Vice President, Secretary & Treasurer
(Chief Accounting Officer)
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