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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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) February 13, 2001
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BELDEN & BLAKE CORPORATION
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(Exact name of registrant as specified in its charter)
Ohio 0-20100 34-1686642
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
5200 Stoneham Road, North Canton, Ohio 44720
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(Address of principal executive offices) (Zip Code)
(330) 499-1660
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Registrant's telephone number, including area code
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Item 9. Regulation FD Disclosure
Belden & Blake Corporation ("Belden & Blake" or the "Company") is
furnishing the following information under Item 9 of this Current Report on Form
8-K.
The information in this report is furnished pursuant to Item 9 and
shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act
or otherwise subject to the liabilities of that section, except if the Company
specifically states that the information is to be considered "filed" under the
Exchange Act or incorporates it by reference into a filing under the Securities
Act of the Exchange Act. This report will not be deemed an admission as to the
materiality of any information in the report that is required to be disclosed
solely by Regulation FD.
The information in this document includes forward-looking statements
that are made pursuant to Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements, and the business
prospects of Belden & Blake are subject to a number of risks and uncertainties
which may cause the Company's actual results in future periods to differ
materially from the forward-looking statements contained herein. These risks and
uncertainties include, but are not limited to, the Company's access to capital,
the market demand for and prices of oil and natural gas, the Company's oil and
gas production and costs of operation, results of the Company's future drilling
activities, the uncertainties of reserve estimates and environmental risks.
These and other risks are described in the Company's 1999 Annual Report on Form
10-K that is available from the Company or the Securities and Exchange
Commission.
Fourth Quarter 2000 Operational Outlook
The Company expects fourth quarter 2000 oil production to average
between 1,525 and 1,550 barrels per day at an average wellhead price of
approximately $28.86 per barrel. Fourth quarter 2000 natural gas production is
expected to average between 50 MMcf (million cubic feet) and 51 MMcf per day at
an average wellhead price of approximately $4.34 per Mcf (thousand cubic feet).
The Company's expected fourth quarter realized price for natural gas includes
the effects of fixed price contracts and financial hedges. Fourth quarter 2000
production expense and production taxes per Mcfe (Mcf equivalent) are expected
to be approximately $1.12.
2001 Operational Outlook
Based on its approved capital budget for 2001, and excluding the impact
of any future acquisitions, the Company expects 2001 oil production to be in the
range of 600,000 to 625,000 Bbls. Oil production in 2001 is expected to be
favorably impacted by the Company's 2000 and 2001 drilling programs, partially
offset by the natural decline of existing wells. Natural gas production in 2001
is expected to be in the range of 18.0 to 18.5 Bcf (billion cubic feet). Natural
gas production in 2001 will be negatively affected by the sale of the Company's
subsidiary, Peake Energy, Inc., in March 2000, partially offset by the expected
results of the Company's 2000 and 2001 drilling programs. The Company's
production expense is expected to be in the range of $0.95 to $1.00 per Mcfe.
Production taxes are expected to be in the range of $0.10 to $0.11 per Mcfe.
The Company expects exploration expense in 2001 to be in the range of
$8 to $9 million. General and administrative expense for the year is expected to
be approximately $5.0 million. Gas gathering, marketing and oilfield services
are expected to contribute $3 to $4 million to the Company's operating margin.
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To manage its exposure to natural gas price volatility, the Company may
partially hedge its physical gas sales prices by selling futures contracts on
the New York Mercantile Exchange ("NYMEX") or by selling NYMEX based commodity
derivative contracts which are placed with major financial institutions that the
Company believes are minimal credit risks. The contracts may take the form of
futures contracts, swaps or options.
The following table reflects the natural gas volumes and the weighted
average prices under financial hedges and fixed price contracts (including
settled hedges) at February 7, 2001:
FINANCIAL HEDGES FIXED PRICE CONTRACTS
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ESTIMATED ESTIMATED
NYMEX WELLHEAD WELLHEAD
QUARTER ENDING MMCF PRICE PRICE MMCF PRICE
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March 31, 2001 1,250 $ 4.75 $ 5.00 2,700 $ 4.80
June 30, 2001 1,050 4.40 4.55 1,300 3.53
September 30, 2001 1,050 4.40 4.55 1,050 3.57
December 31, 2001 1,000 4.43 4.63 450 3.22
March 31, 2002 900 5.42 5.67 180 2.58
June 30, 2002 900 4.46 4.61 180 2.58
September 30, 2002 600 4.46 4.61 175 2.58
December 31, 2002 -- -- -- 130 2.55
The above table does not include an unrealized loss of $1.2 million in
the second quarter of 2001 associated with terminated financial swaps on .750
Bcf of natural gas.
The Company's Board of Directors has approved a capital budget of $39
million in 2001, compared to capital expenditures of approximately $20 million
in 2000. Principal planned capital expenditure categories in 2001 are as
follows:
(millions)
Drilling and completion $ 28
Production enhancements 6
Leasehold acreage and seismic 3
Other capital assets 2
The Company's 2001 drilling program contemplates drilling 158 gross
wells to the shallow blanket formations and 47 gross wells to the deeper more
prolific formations in the Appalachian and Michigan Basins. Approximately 90% of
the planned wells are developmental, with the balance categorized as exploratory
wells. The Company's actual drilling activity in 2001 will be impacted by the
availability of drilling rigs, other oil field goods and services and changes in
commodity prices.
The Company intends to finance its planned capital expenditures through
its available cash flow, available revolving credit line and the sale of non
strategic assets. At February 7, 2001, the Company had approximately $33.8
million available under its existing revolving credit line.
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Signatures
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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.
Date: February 14, 2001 BELDEN & BLAKE CORPORATION
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By : /s/ Robert W. Peshek
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Robert W. Peshek,
Vice President and Chief
Financial Officer