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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): FEBRUARY 17, 2000
BRIGHAM EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 000-22433 75-2692967
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6300 BRIDGEPOINT PARKWAY
BUILDING TWO, SUITE 500
AUSTIN, TEXAS 78730
(Address, including zip code, of principal executive offices)
Registrant's telephone number, including area code: (512) 427-3300
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Item 5. OTHER EVENTS.
On February 22, 2000, Brigham Exploration Company (the "Company")
announced that it entered into a series of financing agreements that provide
funding for its planned 2000 capital expenditure program and working capital
obligations. These transactions include (i) a restructuring of its senior credit
facility to provide from $14 million to $19 million in borrowing availability,
(ii) amendments to the terms of its senior subordinated notes to provide for the
restructured credit facility and additional financial flexibility, and (iii) the
issuance of $4.5 million of common stock and warrants to purchase common stock
in a private placement.
A copy of the Company's press release regarding the financing
transactions contemplated thereby is attached hereto as Exhibit 99.1. The
following summaries of the financing transactions are qualified in their
entirety by reference to the related financing agreements, copies of which are
attached hereto as Exhibits 10.1 through 10.15, and are incorporated in these
summaries by reference.
Amended Credit Facility. On February 17, 2000, Brigham entered into an
amended senior credit facility with its existing lenders, Bank of Montreal and
Societe Generale, and a new lender, Shell Capital Inc. This amended facility
provides the Company with $70 million in borrowing availability for a three-year
term, an increase from the $56 million in availability under the existing
facility. If Brigham exceeds certain asset value and interest coverage tests in
the second or third quarters of 2000, the total borrowing availability under
this credit facility will increase to $75 million. Borrowings under the senior
credit facility in excess of $45 million are convertible into shares of Brigham
common stock in the following amounts: (i) the first $10 million of borrowings
is convertible at $3.90 per share, (ii) the second $10 million is convertible at
$6.00 per share and (iii) the final $10 million is convertible at $8.00 per
share. If the credit facility is repaid at maturity or is prepaid prior to
maturity without payment of cash premiums, the Company must issue to Shell
Capital warrants to purchase Brigham common stock. All borrowings under the
senior credit facility bear interest at annual rates of LIBOR plus 3.00%, or
approximately 8.875% based on current LIBOR rates. In addition, certain
financial covenants of the senior credit facility have been amended or added. In
connection with this amendment, the Company has agreed to reset the price of the
warrants to purchase one million shares of Brigham common stock previously
issued to the Bank of Montreal and Societe Generale from a current exercise
price of $2.25 per share to $2.02 per share.
Amended Senior Subordinated Notes. On February 17, 2000, Brigham
entered into an amendment to the terms of the indenture related to its
outstanding senior subordinated notes due 2003 (the "Notes"). In this amendment,
the holders of the Notes have agreed to waive the minimum consolidated interest
coverage ratio covenant through June 30, 2000 and to adjust subsequent levels
under this test. In addition, the amendment to the Notes provides the Company
with an extension of its right to pay interest through the issuance of
additional Notes in lieu of cash (or "in-kind") through the third quarter of
2000 and potentially through the fourth quarter of 2000 if certain conditions
are met. In exchange for granting these amendments, the Company has agreed to
(i) reset the price of the warrants to purchase one million shares of Brigham
common stock previously issued to the holders of the Notes from a current
exercise price of $3.50 per share to the average market price of Brigham common
stock during the twenty day period beginning February 22nd and ending March
12th, and (ii) grant to holders of the Notes a term overriding royalty interest
that provides for
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the limited right to receive 4%, or 3% if certain conditions are met, of the
Company's net production revenue to reduce any outstanding Notes issued as
interest paid in-kind.
Private Equity Placement. On February 22, 2000, Brigham entered into an
agreement to issue 2,195,122 shares of common stock and 731,707 warrants to
purchase common stock for total consideration of $4.5 million in a private
placement to a group of institutional investors led by affiliates of two members
of the Company's board of directors. The equity sale consists of units that
include one share of common stock priced at $2.0525 per share and one-third of a
warrant to purchase Brigham common stock at an exercise price of $2.5625 per
share with a three-year term. Pricing of this private equity placement was based
on the average market price of Brigham common stock during a twenty trading day
period prior to issuance.
Disclosure Regarding Forward-Looking Statements. The Company or its
representatives may make forward looking statements, oral or written, including
statements in this report, press releases and filings with the SEC, regarding
estimated future net revenues from oil and natural gas reserves and the present
value thereof, planned capital expenditures (including the amount and nature
thereof), increases in oil and gas production, the number of wells the Company
anticipates drilling in its planned capital expenditure programs and the
Company's financial position, business strategy and other plans and objectives
for future operations. Although the Company believes that the expectations
reflected in these forward looking statements are reasonable, there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected effects on its business or operations. Among the factors that could
cause actual results to differ materially from the Company's expectations are
general economic conditions, inherent uncertainties in interpreting engineering
data, operating hazards, delays or cancellations of drilling operations for a
variety of reasons, competition, fluctuations in oil and gas prices, the ability
of the Company to successfully integrate the business and operations of acquired
companies, government regulations and other factors set forth among the risk
factors in its filings with the SEC. All subsequent oral and written forward
looking statements attributable to the Company or persons acting on its behalf
are expressly qualified in their entirety by these factors. The Company assumes
no obligation to update any of these statements.
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Item Exhibit
10.1* Amended and Restated Credit Agreement
dated as of February 17, 2000 among
Brigham Oil & Gas, L.P., as Borrower,
Bank of Montreal, as Agent, and the
Lenders signatory hereto.
10.2* Amended and Restated Guaranty Agreement
dated as of February 17, 2000 by Brigham
Exploration Company in favor of Bank of
Montreal, as Agent, and each of the
Lenders party to the Amended and
Restated Credit Agreement.
10.3* Partial Assignment of Notes dated as of
February 17, 2000 by and among (i) Bank
of Montreal, (ii) Societe Generale,
Southwest Agency, (iii) Shell Capital
Inc,, and (iv) Brigham Oil & Gas, L.P.
10.4* First Amendment to Warrant Agreement
dated as of February 17, 2000 between
Brigham Exploration Company and Bank of
Montreal.
10.5* First Amendment to Warrant Agreement
dated as of February 17, 2000 between
Brigham Exploration Company and Societe
Generale, Southwest Agency.
10.6* Equity Conversion Agreement dated as of
February 17, 2000 by and among Brigham
Oil & Gas, L.P., Brigham Exploration
Company and Shell Capital Inc. and its
successors and assigns.
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10.7* Warrant Agreement dated as of February
17, 2000 by and between Brigham
Exploration Company and Shell Capital
Inc.
10.8* Registration Rights Agreement dated as
of February 17, 2000 by and between
Brigham Exploration Company and Shell
Capital Inc.
10.9* Letter dated as of February 17, 2000
regarding certain fees pursuant to
Credit Agreement dated as of February
17, 2000, among Brigham Oil & Gas, L.P.,
Bank of Montreal, as Agent, Shell
Capital Inc. and the lenders signatory
thereto.
10.10* Second Amendment to Intercreditor and
Subordination Agreement dated as of
February 17, 2000 by and among ECT
Merchant Investments Corp., Joint Energy
Development Investments II Limited
Partnership and Bank of Montreal, as
agent for each of the lenders that is a
signatory to, or which becomes a
signatory to, the Senior Credit
Agreement.
10.11* Second Amendment to Indenture dated as
of February 17, 2000 among Brigham
Exploration Company and Chase Bank of
Texas, National Association.
10.12* Conveyance of Adjustable Term Overriding
Royalty Interest dated as of February
17, 2000 by and between Brigham Oil &
Gas, L.P., and ECT Merchant Investments
Corp. and Joint Energy Development
Investments II Limited Partnership.
10.13* Warrant Certificate dated as of February
17, 2000 by and between Brigham
Exploration Company and Joint Energy
Development Investments II Limited
Partnership.
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10.14* Warrant Certificate dated as of February
17, 2000 by and between Brigham
Exploration Company and ECT Merchant
Investments Corp.
10.15* Securities Purchase and Registration
Rights Agreement dated as of February
22, 2000 by and among Brigham
Exploration Company and GAP Coinvestment
Partners II, L.P., Special Situations
Private Equity Fund, L.P., and Aspect
Resources, L.L.C.
99.1* Press Release dated February 22, 2000.
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* filed herewith.
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SIGNATURE
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.
BRIGHAM EXPLORATION COMPANY
Date: February 29, 2000 By: /s/ Curtis F. Harrell
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Curtis F. Harrell
Chief Financial Officer
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INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
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10.1* Amended and Restated Credit Agreement
dated as of February 17, 2000 among
Brigham Oil & Gas, L.P., as Borrower,
Bank of Montreal, as Agent, and the
Lenders signatory hereto.
10.2* Amended and Restated Guaranty Agreement
dated as of February 17, 2000 by Brigham
Exploration Company in favor of Bank of
Montreal, as Agent, and each of the
Lenders party to the Amended and
Restated Credit Agreement.
10.3* Partial Assignment of Notes dated as of
February 17, 2000 by and among (i) Bank
of Montreal, (ii) Societe Generale,
Southwest Agency, (iii) Shell Capital
Inc,, and (iv) Brigham Oil & Gas, L.P.
10.4* First Amendment to Warrant Agreement
dated as of February 17, 2000 between
Brigham Exploration Company and Bank of
Montreal.
10.5* First Amendment to Warrant Agreement
dated as of February 17, 2000 between
Brigham Exploration Company and Societe
Generale, Southwest Agency.
10.6* Equity Conversion Agreement dated as of
February 17, 2000 by and among Brigham
Oil & Gas, L.P., Brigham Exploration
Company and Shell Capital Inc. and its
successors and assigns.
10.7* Warrant Agreement dated as of February
17, 2000 by and between Brigham
Exploration Company and Shell Capital
Inc.
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10.8* Registration Rights Agreement dated as
of February 17, 2000 by and between
Brigham Exploration Company and Shell
Capital Inc.
10.9* Letter dated as of February 17, 2000
regarding certain fees pursuant to
Credit Agreement dated as of February
17, 2000, among Brigham Oil & Gas, L.P.,
Bank of Montreal, as Agent, Shell
Capital Inc. and the lenders signatory
thereto.
10.10* Second Amendment to Intercreditor and
Subordination Agreement dated as of
February 17, 2000 by and among ECT
Merchant Investments Corp., Joint Energy
Development Investments II Limited
Partnership and Bank of Montreal, as
agent for each of the lenders that is a
signatory to, or which becomes a
signatory to, the Senior Credit
Agreement.
10.11* Second Amendment to Indenture dated as
of February 17, 2000 among Brigham
Exploration Company and Chase Bank of
Texas, National Association.
10.12* Conveyance of Adjustable Term Overriding
Royalty Interest dated as of February
17, 2000 by and between Brigham Oil &
Gas, L.P., and ECT Merchant Investments
Corp. and Joint Energy Development
Investments II Limited Partnership.
10.13* Warrant Certificate dated as of February
17, 2000 by and between Brigham
Exploration Company and Joint Energy
Development Investments II Limited
Partnership.
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10.14* Warrant Certificate dated as of February
17, 2000 by and between Brigham
Exploration Company and ECT Merchant
Investments Corp.
10.15* Securities Purchase and Registration
Rights Agreement dated as of February
22, 2000 by and among Brigham
Exploration Company and GAP Coinvestment
Partners II, L.P., Special Situations
Private Equity Fund, L.P., and Aspect
Resources, L.L.C.
99.1* Press Release dated February 22, 2000.