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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
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 6, 1997
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PARKER & PARSLEY PETROLEUM COMPANY
(Exact name of Registrant as specified in its charter)
DELAWARE 1-10695 74-2570602
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification Number)
303 WEST WALL
SUITE 101 79701
MIDLAND, TEXAS (Zip code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: (915) 683-4768
NOT APPLICABLE
(former address if changed since last report)
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ITEM 5. OTHER EVENTS.
On April 6, 1997, Parker & Parsley Petroleum Company ("Parker &
Parsley") issued a press release (the "Press Release") announcing that it had
entered into an Agreement and Plan of Merger (the "Merger Agreement") with MESA
Inc. ("MESA"), MESA Operating Co., a Delaware corporation and a wholly-owned
subsidiary of MESA, and MXP Reincorporation Corp., a newly formed Delaware
corporation and a wholly-owned subsidiary of MESA. The consummation of the
transactions contemplated in the Merger Agreement is subject to the approval of
the shareholders of each of Parker & Parsley and MESA. For additional
information regarding the transactions contemplated in the Merger Agreement,
reference is made to the Press Release, the Merger Agreement and certain other
documents entered into in connection with the Merger Agreement, copies of which
are attached to this Current Report as exhibits and incorporated herein by
reference.
The following tables set forth certain summary pro forma condensed
consolidated financial, operating and reserve information of Parker & Parsley
and MESA as of and for the year ended December 31, 1996. Such information does
not give effect to the transactions contemplated in the Merger Agreement. The
unaudited pro forma consolidated information of Parker & Parsley gives effect
to (i) the sale of certain wholly-owned Australian subsidiaries to Santos Ltd.
in March 1996, (ii) the sale of Bridge Oil Timor Sea, Inc. to Phillips
Petroleum International Investment Company in June 1996 and (iii) the aggregate
effect of the sales of certain nonstrategic domestic oil and gas properties,
gas plants, contract rights and related assets sold during the period from
January 2, 1996 to December 31, 1996. Such information should be read in
conjunction with Parker & Parsley's Current Report on Form 8-K dated April 3,
1997 and the Consolidated Financial Statements of Parker & Parsley (and the
related notes) included in Parker & Parsley's Annual Report on Form 10-K for the
year ended December 31, 1996. The unaudited pro forma consolidated information
of MESA gives effect to the 1996 recapitalization of MESA's balance sheet, the
acquisition of all of the outstanding equity of Greenhill Petroleum Corporation
and additional borrowings to finance such acquisition. Such information should
be read in conjunction with MESA's Current Report on Form 8-K dated February 7,
1997 and the Consolidated Financial Statements of MESA (and the related notes)
included in MESA's Annual Report on Form 10-K for the year ended December 31,
1996.
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PARKER & PARSLEY
SUMMARY PRO FORMA CONDENSED FINANCIAL AND OPERATING INFORMATION
(in thousands, except per share data)
Revenues:
Oil and gas $ 374,560
Natural gas processing 23,184
Interest and other 17,328
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415,072
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Costs and expenses:
Oil and gas production 101,545
Natural gas processing 11,949
Depletion, depreciation and
amortization 104,629
Exploration and abandonments 20,187
General and administrative 26,631
Interest 40,720
Other 2,451
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308,112
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Income from continuing
operations before income taxes 106,960
Income tax provision (37,400)
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Income from continuing operations $ 69,560
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Income from continuing operations
per share:
Primary $ 2.16
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Fully diluted $ 1.81
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WEIGHTED AVERAGE SHARES
OUTSTANDING:
COMMON 35,734
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EBITDA(a) $ 272,496
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(a) EBITDA represents income from continuing operations plus interest
expense, income tax expense, exploration and abandonment charges, and
depletion, depreciation and amortization expense. EBITDA is not
presented as an indicator of operating performance or as a measure of
liquidity.
BALANCE SHEET DATA
Cash and investments $ 18,711
Total assets 1,199,865
Long-term debt, including current
maturities 326,289
Preferred stock of subsidiary 188,820
Stockholders' equity 530,296
SUMMARY PRO FORMA RESERVE AND
PRODUCTION DATA
ESTIMATED PROVED RESERVES:
Natural gas (Bcf) 829.4
Oil and condensate (MMBbls) 163.9
Present value of future net cash
flows, before income taxes,
discounted at 10% (in millions) $ 2,345.4
PRODUCTION DATA:
Natural gas (Bcf) 70.7
Oil and condensate (MMBbls) 10.7
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MESA
SUMMARY PRO FORMA CONDENSED FINANCIAL OPERATING INFORMATION
(in thousands, except per share data)
Revenues:
Natural gas $ 201,689
Natural gas liquids 97,561
Oil and condensate 72,030
Other 11,075
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382,355
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Costs and expenses:
Lease operating 72,233
Production and other taxes 25,384
Exploration charges 12,772
General and administrative 31,743
Depreciation, depletion and
amortization 135,289
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277,421
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Operating income 104,934
Net interest expense (97,062)
Other income 24,626
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Income from continuing operations
before income taxes 32,498
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Income from continuing operations 32,498
Dividends on preferred stock (21,880)
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Net income from continuing
operations attributable to
common $ 10,618
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Net income per
common share $ 0.16
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Common shares 65,129
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EBITDAEX(1) $ 277,621
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(1) EBITDAEX represents net income from continuing operations plus net interest
expense, depreciation, depletion and amortization expense and exploration
charges. EBITDAEX is not presented as an indicator of operating performance
or as a measure of liquidity.
BALANCE SHEET DATA
Cash and investments $ 23,485
Total Assets 1,494,527
Long-term, debt, including current
maturities 1,078,577
Stockholders' equity 265,494
SUMMARY PRO FORMA RESERVE AND
PRODUCTION DATA
ESTIMATED PROVED RESERVES:
Natural gas (Bcf) 1,079.6
Natural gas liquids(MMBbls) 88.1
Oil and condensate (MMBbls) 30.3
Present Value of future net cash
flows, before income taxes,
discounted at 10% (in millions) 2,135.9
PRODUCATION DATA:
Natural gas (Bcf) 90.0
Natural gas liquids (MMBbls) 6.5
Oil and condensate (MMBbls) 3.4
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On Friday, April 4, 1997, MESA had outstanding 64,279,568, 61,651,163
and 62,424,436 shares of common stock, Series A 8% Cumulative Convertible
Preferred Stock ("Series A Preferred Stock") and Series B 8% Cumulative
Convertible Preferred Stock ("Series B Preferred Stock"), respectively. The New
York Stock Exchange closing prices per share of MESA's common stock and Series
A Preferred Stock on such date were $5.75 and $7.25, respectively. MESA's
Series B Preferred Stock is not listed on an exchange. On the same date, Parker
& Parsley had 35,047,050 shares of common stock outstanding, and its New York
Stock Exchange closing price was $29.875 per share.
The Current Report on Form 8-K includes forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Such forward-looking statements
include, without limitation, estimates with respect to reserves and production
levels. Although MESA and Parker & Parsley believe that the expectations
reflected in such forward-looking statements are reasonable, Mesa can give no
assurance that such expectations will prove to have been correct.
Forward-looking statements are qualified as may be provided in Mesa's and
Parker & Parsley's annual, quarterly and current reports and registration
statements filed with the Securities and Exchange Commission.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
EXHIBITS TITLE
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2.1 Agreement and Plan of Merger dated as of April 6,
1997 among MESA Inc., MESA Operating Co., MXP
Reincorporation Corp., and Parker & Parsley
Petroleum Company.
2.2 Shareholders Agreement dated as of April 6, 1997 by
and between MESA Inc. and DNR-MESA Holdings, L.P.
2.3 Letter Agreement dated April 6, 1997 between Parker
& Parsley Petroleum Company and DNR-MESA Holdings,
L.P.
2.4 Shareholders Agreement dated as of April 6, 1997 by
and between Boone Pickens and Parker & Parsley
Petroleum Company.
99 Press release issued on April 6, 1997 relating to
the Merger Agreement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PARKER & PARSLEY PETROLEUM
COMPANY
By: /s/ Steven L. Beal
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Steven L. Beal, Senior Vice President
and Chief Financial Officer
Date: April 6, 1997
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INDEX TO EXHIBIT
EXHIBITS TITLE
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2.1 Agreement and Plan of Merger dated as of April 6,
1997 among MESA Inc., MESA Operating Co., MXP
Reincorporation Corp., and Parker & Parsley
Petroleum Company.
2.2 Shareholders Agreement dated as of April 6, 1997 by
and between MESA Inc. and DNR-MESA Holdings, L.P.
2.3 Letter Agreement dated April 6, 1997 between Parker
& Parsley Petroleum Company and DNR-MESA Holdings,
L.P.
2.4 Shareholders Agreement dated as of April 6, 1997 by
and between Boone Pickens and Parker & Parsley
Petroleum Company.
99 Press release issued on April 6, 1997 relating to
the Merger Agreement.