1 =============================================================================== UNITED STATES 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 June 25, 1999 (Date of earliest event reported) BRIGHAM EXPLORATION COMPANY (Exact name of registrant as specified in its charter) Delaware 000-22433 75-2692967 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation or organization) File Number) Identification Number) 6300 Bridge Point Parkway Bldg. 2, Suite 500 Austin, Texas 78730 (Address of principal executive offices) Registrant's telephone number, including area code (512) 427-3300 =============================================================================== 2 ITEM 2. DISPOSITION OF ASSETS On June 25, 1999, Brigham Exploration Company (the "Company") closed the sale of its entire interest in certain producing and non-producing natural gas and oil properties located in its Anadarko Basin province to Ward-Chitwood Energy B, L.L.C. for a sales price of $16.6 million and to Chesapeake Mid-Continent Corp. for a sales price of $500,000. The Company received a net combined total of $16.9 million after adjustment for transaction costs. Net proceeds have been used for repayment of a portion of the Company's notes payable. ITEM 7. PRO FORMA FINANCIAL INFORMATION Unaudited Pro Forma Condensed Consolidated Financial Statements of Brigham Exploration Company Page ---- Pro Forma Financial Information........................ 3 Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1999................... 4 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Three Months Ended March 31, 1999................................ 5 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 1998............................. 6 Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements......................... 7 2 3 BRIGHAM EXPLORATION COMPANY PRO FORMA FINANCIAL INFORMATION The accompanying unaudited pro forma financial statements are presented to reflect the divestiture by Brigham Exploration Company (the"Company") of its entire interest in certain producing and non-producing natural gas and oil properties in the Company's Anadarko Basin province (the "Divestiture"). The Divesture closed on June 25, 1999, and was effective June 1, 1999. The unaudited pro forma balance sheet has been prepared to give effect to the Divestiture described above as if the transaction occurred on March 31, 1999. The accompanying unaudited pro forma statements of operations for the three months ended March 31, 1999 and the year ended December 31, 1998 have been prepared to give effect to the Divestiture as if the transaction occurred on January 1, 1998. The unaudited pro forma financial statements of the Company are not necessarily indicative of the results for the periods presented had these transactions taken place on the dates indicated. In addition, future results may vary significantly from the results reflected in the accompanying unaudited pro forma financial statements because of normal production declines, changes in product prices, and the success of future exploration and development activities, among other factors. The unaudited pro forma financial statements should be read in conjunction with the Company's historical consolidated financial statements and notes thereto as of and for the period ended December 31, 1998 as included on the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission, and the Company's historical financial statements and notes thereto as of and for the quarterly period ended March 31, 1999 as filed with the Securities and Exchange Commission. 3 4 BRIGHAM EXPLORATION COMPANY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET MARCH 31, 1999 (in thousands) Pro Forma Historical Adjustments Pro Forma ----------- ------------- ----------- ASSETS Current assets: Cash and cash equivalents $ 7,018 $ -- $ 7,018 Accounts receivable 4,599 -- 4,599 Prepaid expenses 257 -- 257 --------- ------------- --------- Total current assets 11,874 -- 11,874 --------- ------------- --------- Natural gas and oil properties, at cost, net 133,283 (16,850)(a) 116,433 Other property and equipment, at cost, net 1,953 -- 1,953 Drilling advances paid 310 -- 310 Deferred loan fees 3,632 -- 3,632 Other noncurrent assets 181 -- 181 --------- ------------- --------- $ 151,233 $ (16,850) $ 134,383 ========= ============= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 19,660 $ -- $ 19,660 Accrued drilling costs 2,012 -- 2,012 Participant advances received 661 -- 661 Other current liabilities 1,505 -- 1,505 --------- ------------- --------- Total current liabilities 23,838 -- 23,838 --------- ------------- --------- Notes payable 59,000 (16,850)(b) 42,150 Senior subordinated notes, net 36,699 -- 36,699 Other noncurrent liabilities 5,573 -- 5,573 Stockholders' equity: Preferred stock, $.01 par value, 10 million shares authorized, none issued and outstanding -- -- -- Common stock, $.01 par value, 30 million shares authorized, 14,309,071 issued and outstanding 143 -- 143 at March 31, 1999 Additional paid-in capital 62,817 -- 62,817 Unearned stock compensation (768) -- (768) Accumulated deficit (36,069) -- (36,069) --------- ------------- --------- Total stockholders' equity 26,123 -- 26,123 --------- ------------- --------- $ 151,233 $ (16,850) $ 134,383 ========= ============= ========= The accompanying notes are an integral part of these statements. 4 5 BRIGHAM EXPLORATION COMPANY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 (in thousands, except per share data) Pro Forma Historical Adjustments Pro Forma ---------- ------------ ---------- Revenues: Natural gas and oil sales $ 3,191 $ (437)(c) $ 2,754 Workstation revenue 90 -- 90 -------- -------- -------- 3,281 (437) 2,844 -------- -------- -------- Costs and expenses: Lease operating 535 (50)(c) 485 Production taxes 169 (24)(c) 145 General and administrative 918 -- 918 Depletion of natural gas and oil properties 1,350 (186)(d) 1,164 Depreciation and amortization 127 -- 127 Amortization of stock compensation 58 -- 58 -------- -------- -------- 3,157 (260) 2,897 -------- -------- -------- Operating income (loss) 124 (177) (53) -------- -------- -------- Other income (expense): Interest income 24 -- 24 Interest expense (2,817) 320(e) (2,497) -------- -------- -------- (2,793) 320 (2,473) -------- -------- -------- Net loss before income taxes (2,669) 143 (2,526) Income tax benefit -- -- -- -------- -------- -------- Net loss $ (2,669) $ 143 $ (2,526) ======== ======== ======== Net loss per share: Basic / Diluted $ (0.20) $ (0.19) Weighted average common shares outstanding: Basic / Diluted 13,317 13,317 The accompanying notes are an integral part of these statements. 5 6 BRIGHAM EXPLORATION COMPANY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998 (in thousands, except per share data) Pro Forma Historical Adjustments Pro Forma ---------- ----------- ---------- Revenues: Natural gas and oil sales $ 13,799 $ (2,023)(f) $ 11,776 Workstation revenue 390 -- 390 -------- -------- -------- 14,189 (2,023) 12,166 -------- -------- -------- Costs and expenses: Lease operating 2,172 (219)(f) 1,953 Production taxes 850 (146)(f) 704 General and administrative 4,672 -- 4,672 Depletion of natural gas and oil properties 8,410 (581)(g) 7,829 Depreciation and amortization 413 -- 413 Capitalized ceiling impairment 24,847 3,803 (h) 28,650 Amortization of stock compensation 372 -- 372 -------- -------- -------- 41,736 2,857 44,593 -------- -------- -------- Operating loss (27,547) (4,880) (32,427) -------- -------- -------- Other income (expense): Interest income 136 -- 136 Interest expense (7,120) 1,397 (i) (5,723) -------- -------- -------- (6,984) 1,397 (5,587) -------- -------- -------- Net loss before income taxes (34,531) (3,483) (38,014) Income tax benefit 1,186 -- 1,186 -------- -------- -------- Net loss $(33,345) $ (3,483) $(36,828) ======== ======== ======== Net loss per share: Basic/Diluted $ (2.64) $ (2.92) Common shares outstanding: Basic/Diluted 12,626 12,626 The accompanying notes are an integral part of these statements. 6 7 BRIGHAM EXPLORATION COMPANY NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF TRANSACTION The accompanying unaudited pro forma financial statements are presented to reflect the Divestiture by the Company of its entire interest in certain producing and non-producing natural gas and oil properties in the Company's Anadarko Basin province. The Divestiture closed on June 25, 1999, and was effective June 1, 1999. The Company received a net combined total of $16.9 million after adjustment for transaction costs to the combined total sales price of $17.1 million. Net proceeds from the sale have been used for repayment of a portion of the Company's notes payable. 2. BASIS OF PRESENTATION The accompanying unaudited pro forma balance sheet has been prepared to give effect to the Divestiture described above as if the transaction occurred on March 31, 1999. The accompanying unaudited pro forma statements of operations for the three months ended March 31, 1999 and the year ended December 31, 1998 have been prepared to give effect to the Divestiture as if the transaction occurred on January 1, 1998. 3. PRO FORMA ADJUSTMENTS The unaudited pro forma financial statements reflect the following pro forma adjustments related to the Divestiture: (a) Proceeds from the Divestiture are credited to natural gas and oil properties. (b) Decrease in notes payable resulting from repayment with proceeds from the Divestiture. (c) Elimination of natural gas and oil sales revenues, lease operating expenses and production taxes attributable to the properties sold in the Divestiture for the three months ended March 31, 1999. (d) Adjustment to depletion of natural gas and oil properties resulting from recognition of proceeds from the Divestiture and elimination of production and reserves attributable to the properties sold in the Divestiture for the three months ended March 31, 1999. (e) Reduction of interest expense due to assumed repayment of the Company's notes payable with proceeds from the Divestiture for the three months ended March 31, 1999. (f) Elimination of natural gas and oil sales revenues, lease operating expenses and production taxes attributable to the properties sold in the Divestiture for the year ended December 31, 1998. (g) Adjustment to depletion of natural gas and oil properties resulting from recognition of proceeds from the Divestiture and elimination of production and reserves attributable to the properties sold in the Divestiture for the year ended December 31, 1998. (h) Adjustment to the capitalized ceiling impairment for the elimination of costs and reserves attributable to the Divestiture. (i) Reduction of interest expense due to assumed repayment of the Company's notes payable with proceeds from the Divestiture for the year ended December 31, 1998. 7 8 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, in the City of Austin, State of Texas, on the 9th day of June, 1999. BRIGHAM EXPLORATION COMPANY By: /s/ Ben M. Brigham ---------------------------------- Ben M. Brigham President , Chief Executive Officer and Chairman of the Board By: /s/ Craig M. Fleming ---------------------------------- Craig M. Fleming Chief Financial Officer 8