1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 December 18, 1997 (as amended on March 2, 1998) ----------------------------- Date of Report (Date of earliest event reported) COHO ENERGY, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Commission file number 0-22576 Texas 75-2488635 - ------------------------------ ---------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 14785 Preston Road, Suite 860 Dallas, Texas 75240 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (972) 774-8300 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Business Acquired INDEX TO FINANCIAL STATEMENTS Report of Independent Public Accountants ..........................................F-1 Statements of Revenues and Direct Operating Expenses for the Years Ended December 31, 1995, 1996 and 1997 and for the Nine Months Ended September 30, 1997 ......................................................F-2 Notes to Statements of Revenues and Direct Operating Expenses .....................F-3 (b) Pro Forma Financial Information Pro Forma Condensed Consolidated Financial Statements (Unaudited) .................P-1 Pro Forma Condensed Consolidated Balance Sheet as of September 30, 1997 ...........P-2 Pro Forma Condensed Consolidated Statement of Earnings for the Year Ended December 31, 1996 .............................................................P-3 Pro Forma Condensed Consolidated Statement of Earnings for the Nine Months Ended September 30, 1997 ............................................................P-4 Notes to Pro Forma Condensed Consolidated Financial Statements ....................P-5 3 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors and Shareholders of Coho Energy, Inc.: We have audited the accompanying statements of revenues and direct operating expenses of the Amoco Property Acquisition (see Note 1) for the years ended December 31, 1995, 1996 and 1997 and for the nine months ended September 30, 1997. These financial statements are the responsibility of the management of Coho Energy, Inc. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such statements present fairly, in all material respects, the revenues and direct operating expenses of the Amoco Property Acquisition described in Note 1 for the years ended December 31, 1995, 1996 and 1997 and for the nine months ended September 30, 1997 in conformity with generally accepted accounting principles. Dallas, Texas March 2, 1998 F-1 4 AMOCO PROPERTY ACQUISITION STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES For the Years Ended December 31, 1995, 1996 and 1997 and for the Nine Months Ended September 30, 1997 (in thousands) Nine Months Ended Year Ended December 31, September 30, ------------------------------- ----------------- 1995 1996 1997 1997 ------- ------- ------- ------- OPERATING REVENUES Oil and gas production $16,636 $27,736 $43,017 $32,040 DIRECT OPERATING EXPENSES Oil and gas operating 6,651 7,425 16,338 12,205 ------- ------- ------- ------- EXCESS OF REVENUES OVER DIRECT OPERATING EXPENSES $ 9,985 $20,311 $26,679 $19,835 ======= ======= ======= ======= See Notes to Statements of Revenues and Direct Operating Expenses. F-2 5 AMOCO PROPERTY ACQUISITION NOTES TO STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES (1) BASIS OF PRESENTATION - On December 18, 1997, Coho Energy, Inc. (the "Company"), through its indirect wholly owned subsidiary Coho Oil & Gas, Inc. ("Coho Oil"), acquired from Amoco Production Company ("Amoco") interests in certain crude oil and natural gas properties (the "Amoco Property Acquisition") located in southern Oklahoma for cash consideration of approximately $257.5 million and warrants to purchase one million shares of common stock of the Company at $10.425 per share for a period of five years. The acquired properties (the "Amoco Properties") are in more than 25,000 gross acres concentrated in southern Oklahoma, including 14 major producing oil fields. Approximately $70 million of the acquisition cost is attributable to unproved properties. Coho Oil is a wholly owned subsidiary of Coho Resources, Inc. ("Coho Resources"), which is in turn a wholly owned subsidiary of Coho Energy, Inc. Approximately $221 million of the acquisition was financed under Coho Resources' existing bank credit facility and the remaining $36.5 million was funded from working capital. The accompanying statements of revenues and direct operating expenses include revenues and direct operating expenses for the acquired properties for the periods such properties were owned by Amoco. Certain of the properties in the Amoco Property Acquisition were acquired by Amoco in March 1997 and therefore only the revenues and direct operating expenses from March 1, 1997 through December 31, 1997 are included in such statements. See Note 2 for pro forma information. The accompanying statements of revenues and direct operating expenses do not include general and administrative expense, interest income or expense, a provision for depreciation, depletion and amortization or any provision for income taxes because the property interests acquired represent only a portion of a business and the costs incurred by the sellers of the properties are not necessarily indicative of the costs to be incurred by the Company. Historical financial information reflecting financial position, results of operations and cash flows of the Amoco Property Acquisition is not presented because all of the acquisition cost was assigned to the oil and gas property interests. Accordingly, the historical statements of revenues and direct operating expenses have been presented in lieu of the financial statements required under Rule 3-05 of Securities and Exchange Commission Regulation S-X. (2) ACQUISITION OF ADDITIONAL INTERESTS IN THE AMOCO PROPERTIES In March 1997, Amoco acquired interests in certain southern Oklahoma crude oil and natural gas properties which were subsequently sold to the Company in December 1997 in the Amoco Property Acquisition transaction discussed above. The revenues and direct operating expenses for such properties for the period from March 1, 1997 through December 31, 1997 are included in the audited statements of revenues and direct operating expenses for the Amoco Property Acquisition. F-3 6 AMOCO PROPERTY ACQUISITION NOTES TO STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES (Continued) The following unaudited pro forma information for the years ended December 31, 1996 and 1997 and for the nine months ended September 30, 1997 have been prepared assuming the acquisition of such interests had consummated immediately prior to each of the periods presented (in thousands): For the Nine For the Year Ended Months Ended December 31, September 30, ------------------- ------------- 1996 1997 1997 ------- ------- ------- Operating revenues $44,878 $46,298 $35,321 Direct operating expenses 16,130 17,947 13,814 ------- ------- ------- Excess of revenues over direct operating expenses $28,748 $28,351 $21,507 ======= ======= ======= (3) SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (UNAUDITED) - Estimated Quantities of Proved Oil and Gas Reserves The estimates of proved oil and gas reserves utilized in the preparation of the financial statements were estimated by independent petroleum engineers in accordance with guidelines established by the Securities and Exchange Commission and the Financial Accounting Standards Board, which require that reserve reports be prepared under existing economic and operating conditions. The Company emphasizes that reserve estimates of new discoveries or undeveloped properties are more imprecise than those of producing oil and gas properties. Accordingly, these estimates are expected to change as future information becomes available. PROVED OIL AND GAS RESERVES AS OF DECEMBER 31, 1997: Oil (MBbls) Gas (MMcf) ----------- ---------- Proved Reserves 53,358 32,616 ====== ====== Proved Developed Reserves 27,231 21,361 ====== ====== Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves The following standardized measure of discounted future net cash flows was computed in accordance with the rules and regulations of the Securities and Exchange Commission and Financial Accounting Standards Board Statement No. 69 using year-end prices and costs. Royalty deductions were based on laws, regulations and contracts existing at the end of each period. No values are given to unproved properties or to probable reserves that may be recovered from proved properties. The inexactness associated with estimating reserve quantities, future production and revenue streams and future development and production expenditures, together with the assumptions applied in valuing future F-4 7 AMOCO PROPERTY ACQUISITION NOTES TO STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES (Continued) production, substantially diminishes the reliability of this data. The values so derived are not considered to be an estimate of fair market value. The Company therefore cautions against its simplistic use. STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS BEFORE INCOME TAXES AT DECEMBER 31, 1997 (in thousands): Future Cash Inflows $ 917,281 Future Costs: Production (361,304) Development (41,186) --------- Future Net Cash Flows 514,791 10% Discount Factor (275,986) --------- Standardized Measure of Discounted Future Net Cash Flows before Income Taxes $ 238,805 ========= Estimated December 31, 1997 average realized price: $/Bbl ........................................ $ 15.88 $/Mcf ........................................ $ 2.15 F-5 8 COHO ENERGY, INC. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The accompanying Pro Forma Condensed Consolidated Financial Statements have been prepared by recording pro forma adjustments to the historical consolidated financial statements of Coho Energy, Inc. and subsidiaries (the "Company"). The Pro Forma Condensed Consolidated Balance Sheet as of September 30, 1997 has been prepared as if the Amoco Property Acquisition and the Offerings discussed in Note 1 were consummated on September 30, 1997. The Pro Forma Condensed Consolidated Statements of Earnings for the year ended December 31, 1996 and for the nine months ended September 30, 1997 have been prepared as if the Amoco Property Acquisition was consummated immediately prior to January 1, 1996 and January 1, 1997, respectively. The Pro Forma Condensed Consolidated Financial Statements are not necessarily indicative of the financial position or results of operations that would have occurred had the transaction been effected on the assumed dates. Additionally, future results may vary significantly from the results reflected in the Pro Forma Condensed Consolidated Statements of Earnings due to normal production declines, changes in oil and gas prices, future transactions and other factors. These statements should be read in conjunction with the Company's audited consolidated financial statements and the related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996 and the Company's condensed consolidated financial statements and the related notes included in the Company's quarterly report on Form 10-Q for the nine months ended September 30, 1997. P-1 9 COHO ENERGY, INC. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) September 30, 1997 (in thousands, except share amounts) Pro Forma Adjustments ------------------------------ The Amoco Property Historical Offerings(a) Acquisition(b) Pro Forma ---------- ------------ -------------- --------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,245 $ 48,956 $ (38,355) $ 11,846 Accounts receivable, principally trade 8,322 8,322 Deferred income taxes and other non current assets 1,924 1,924 --------- --------- --------- --------- 11,491 48,956 (38,355) 22,092 PROPERTY AND EQUIPMENT, at cost net of accumulated depletion and depreciation, based on full cost accounting 251,441 267,745 519,186 OTHER ASSETS 2,193 4,383 6,576 --------- --------- --------- --------- $ 265,125 $ 53,339 $ 229,390 $ 547,854 ========= ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable, principally trade $ 7,705 $ 7,705 Accrued liabilities and other payables 8,121 1,300 9,421 Current portion of long-term debt 38 38 --------- --------- --------- --------- 15,864 0 1,300 17,164 LONG TERM DEBT excluding current portion 144,791 4,116 221,000 369,907 OTHER NONCURRENT LIABILITIES -- 3,700 3,700 DEFERRED INCOME TAXES 17,699 17,699 SHAREHOLDERS' EQUITY Preferred stock, par value $0.01 per share Authorized 10,000,000 shares, none issued -- -- Common stock, par value $0.01 per share Authorized 50,000,000 shares, Issued and outstanding 20,465,330 shares; Pro Forma - 25,465,330 shares 205 50 255 Additional paid-in capital 84,234 49,173 3,390 136,797 Retained earnings 2,332 2,332 --------- --------- --------- --------- Total shareholders' equity 86,771 49,223 3,390 139,384 --------- --------- --------- --------- $ 265,125 $ 53,339 $ 229,390 $ 547,854 ========= ========= ========= ========= See Notes to Pro Forma Condensed Consolidated Financial Statements. P-2 10 COHO ENERGY, INC. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited) For the Year Ended December 31, 1996 (in thousands, except share amounts) Pro Forma Adjustments ---------------------------- Amoco Property Historical Acquisition (c) Other Pro Forma ---------- --------------- ----- --------- OPERATING REVENUES Oil and gas production $ 54,272 $ 44,878 $ 99,150 ------------ ------------ -------- OPERATING EXPENSES Direct operating expenses 13,875 16,130 30,005 General and administrative 7,264 1,200(d) 8,464 Depletion and depreciation 16,280 10,442(e) 26,722 ------------ ------------ -------- Total operating expenses 37,419 16,130 65,191 ------------ ------------ -------- OPERATING INCOME 16,853 28,748 33,959 ------------ ------------ -------- OTHER INCOME AND EXPENSES Interest and other income 1,012 1,012 Interest expense (8,476) (16,686)(f) (25,162) ------------ -------- (7,464) (24,150) ------------ -------- EARNINGS FROM OPERATIONS BEFORE INCOME TAXES 9,389 9,809 INCOME TAX PROVISION 3,483 159(g) 3,642 ------------ -------- NET EARNINGS $ 5,906 $ 6,167 ============ ======== EARNINGS PER COMMON SHARE $ 0.29 $ 0.30 ============ ======== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 20,457,398 20,457,398 ============ ========== See Notes to Pro Forma Condensed Consolidated Financial Statements. P-3 11 COHO ENERGY, INC. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited) For the Nine Months Ended September 30, 1997 (in thousands, except share amounts) Pro Forma Adjustments ----------------------------- Amoco Property Historical Acquisition(c) Other Pro Forma ---------- -------------- ----- --------- OPERATING REVENUES Oil and gas production $ 45,506 $ 35,321 $ 80,827 ------------ ------------ -------- OPERATING EXPENSES Direct operating expenses 11,641 13,814 25,455 General and administrative 5,048 900(d) 5,948 Depletion and depreciation 14,072 8,207(e) 22,279 ------------ ------------ -------- Total operating expenses 30,761 13,814 53,682 ------------ ------------ -------- OPERATING INCOME 14,745 21,507 27,145 ------------ ------------ -------- OTHER INCOME AND EXPENSES Interest and other income 169 169 Interest expense (7,396) (12,116)(f) (19,512) ------------ -------- (7,227) (19,343) ------------ -------- EARNINGS FROM OPERATIONS BEFORE INCOME TAXES 7,518 7,802 INCOME TAX PROVISION 2,932 108(g) 3,040 ------------ -------- NET EARNINGS $ 4,586 $ 4,762 ============ ======== EARNINGS PER COMMON SHARE $ 0.22 $ 0.23 ============ ======== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 21,143,059 21,143,059 ============ ========== See Notes to Pro Forma Condensed Consolidated Financial Statements. P-4 12 COHO ENERGY, INC. AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) BASIS OF PRESENTATION - On December 18, 1997, the Company, through its indirect wholly owned subsidiary Coho Oil & Gas, Inc. ("Coho Oil"), acquired from Amoco Production Company interests in certain crude oil and natural gas properties (the "Amoco Property Acquisition") located in southern Oklahoma for cash consideration of approximately $257.5 million and warrants to purchase one million shares of common stock of the Company at $10.425 per share for a period of five years. The acquired properties are in more than 25,000 gross acres concentrated in southern Oklahoma, including 14 major producing oil fields. Approximately $70 million of the acquisition cost is attributable to unproved properties. On October 3, 1997, the Company issued 5 million shares of common stock at $10.50 per share and issued $150 million of 8 7/8% senior subordinated notes due 2007 pursuant to two public offerings (the "Offerings") with combined net proceeds of approximately $193.7 million. The Company repaid the outstanding borrowings of $144.8 million under its existing bank credit facility from the net proceeds. $36.5 million of the remaining net proceeds and $221 million of new borrowings under the existing bank credit facility were used to finance the Amoco Property Acquisition. The accompanying Pro Forma Condensed Consolidated Balance Sheet at September 30, 1997, has been prepared assuming the Amoco Property Acquisition and the Offerings had been consummated on September 30, 1997. The Pro Forma Condensed Consolidated Statements of Earnings for the year ended December 31, 1996 and the nine months ended September 30, 1997, have been prepared assuming the Company had consummated the Amoco Property Acquisition immediately prior to each of the periods presented. Certain of the properties acquired in the Amoco Property Acquisition were acquired by Amoco in March 1997. The Pro Forma Statements of Earnings for both periods include the revenues and direct operating expenses for the periods prior to Amoco's ownership of such properties. The Pro Forma Condensed Consolidated Statements of Earnings are not necessarily indicative of the results of operations had the Amoco Property Acquisition occurred on the assumed dates. (2) PRO FORMA ADJUSTMENTS - Pro forma adjustments necessary to adjust the Condensed Consolidated Balance Sheet and Statements of Earnings are as follows: (a) To record the increase in cash, the increase in debt issue costs in other noncurrent assets, the net increase in long term debt and the increase in equity related to the Offerings. (b) To record the Amoco Property Acquisition, including approximately $1.9 million of transaction costs and $5 million of assumed liabilities. The existing bank credit facility was used to finance $221 million of the purchase price and the remaining purchase price of $36.5 million, as well as transaction costs, was funded from working capital. The estimated fair market value for the warrants was $3.4 million. P-5 13 COHO ENERGY, INC. AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - Continued (c) To record revenues and direct operating expenses of the Amoco Property Acquisition, based on the statements of revenues and direct operating expenses for the year ended December 31, 1996 and for the nine months ended September 30, 1997, as adjusted to include the revenues and direct operating expenses attributable to the properties acquired by Amoco in March 1997 for periods prior to Amoco's ownership of such properties. See Note 2 of the Statements of Revenues and Direct Operating Expenses. (d) To record the estimated increase in general and administrative expense attributable to the Amoco Property Acquisition. (e) To record estimated depreciation and depletion expense attributable to the Amoco Property Acquisition using the unit-of-production method applied to the net cost of the properties acquired (excluding $70 million related to unproved properties) plus future development costs and abandonment costs associated with proved reserves. (f) To record interest expense attributable to $221 million of bank debt used to finance the Amoco Property Acquisition. Interest expense is based upon the weighted average interest rate incurred by the Company under its existing credit facility assuming the acquisition had been funded at January 1 of each period. (g) To record the tax effect of adjustments (c), (d), (e) and (f) above. P-6 14 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. COHO ENERGY, INC. (Registrant) Date: March 2, 1998 By: s/n EDDIE M. LEBLANC, III -------------------------------- Senior Vice President and Chief Financial Officer