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) March 31, 2003
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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 incorporation) (Commission File Number) (IRS Employer 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
ITEM 5. OTHER EVENTS
DISCONTINUED OPERATIONS
In December 2002, the Company disposed of all of its properties
producing from the New York Medina formation. In applying the provisions of
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," the
Company defined a "component of an entity" as a geographical/geological pool
used for depletion purposes. As such, the disposition of all of the wells in the
New York Medina formation was classified as a discontinued operation. The loss
on the sale of the New York Medina wells and the related results of these
properties were reclassified as discontinued operations for all periods
presented. See the Company's Form 10-K for the fiscal year ended December 31,
2002, as filed with the Securities and Exchange Commission.
2002 QUARTERLY RESULTS
The following table sets forth certain information regarding the
Company's net oil and natural gas production, margins and expenses for the four
quarters of 2002, excluding discontinued operations. However, it does not
exclude all properties sold in 2002.
FIRST SECOND THIRD FOURTH TOTAL
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(DOLLARS IN MILLIONS, EXCEPT AS NOTED)
Production
Gas (Mmcf) 4,213 4,069 3,978 3,622 15,882
Oil (Mbbls) 148 143 139 92 522
Total production (Mmcfe) 5,099 4,927 4,811 4,175 19,012
Production expense per Mcfe $0.96 $1.03 $1.01 $1.23 $1.05
Production taxes per Mcfe 0.09 0.10 0.08 0.11 0.09
Exploration expense excluding
exploratory dry hole expense $2.1 $2.6 $3.0 $4.0 $11.7
General and administrative expense 1.2 1.2 1.1 1.1 4.6
Gas gathering, marketing and
oilfield services margin 1.6 0.9 0.8 0.3 3.6
Mmcf - Million cubic feet Mmcfe - Million cubic feet of natural gas equivalent
Mbbls - Thousand barrels Mcfe - Thousand cubic feet of natural gas equivalent
NATURAL GAS HEDGE POSITION
The following tables reflect the natural gas volumes and the
weighted average prices under financial hedges (including settled hedges) and
fixed price contracts at April 8, 2003:
NATURAL GAS SWAPS NATURAL GAS COLLARS FIXED PRICE CONTRACTS
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ESTIMATED
WELLHEAD NYMEX PRICE ESTIMATED ESTIMATED
NYMEX PRICE PRICE PER MMBTU WELLHEAD PRICE ESTIMATED WELLHEAD PRICE
QUARTER ENDING BBTU PER MMBTU PER MCF BBTU FLOOR/CAP (1) PER MCF (1) MMCF PER MCF
- ----------------- -------- ------------ --------- ------- ----------------- --------------- ----------- ----------------
March 31, 2003 1,800 $ 3.92 $ 4.17 1,240 $ 3.40 - 5.23 $ 3.65 - 5.48 250 $ 3.78
June 30, 2003 2,660 4.21 4.36 480 3.40 - 5.23 3.55 - 5.38 120 3.42
September 30, 2003 1,800 3.92 4.07 1,290 3.40 - 5.23 3.55 - 5.38 70 2.85
December 31, 2003 1,800 3.92 4.14 1,290 3.40 - 5.23 3.62 - 5.45 60 2.56
-------- -------- -------- ------- -------------- --------------- ------- ---------
8,060 $ 4.01 $ 4.20 4,300 $ 3.40 - 5.23 $ 3.59 - 5.42 500 $ 3.42
======== ======== ======== ======= ============== =============== ======= =========
March 31, 2004 2,040 $ 3.84 $ 4.09 1,080 $ 4.00 - 5.80 $ 4.25 - 6.05 55 $ 2.60
June 30, 2004 2,040 3.84 3.99 1,080 4.00 - 5.80 4.15 - 5.95 55 2.60
September 30, 2004 2,040 3.84 3.99 1,080 4.00 - 5.80 4.15 - 5.95 55 2.60
December 31, 2004 2,040 3.84 4.06 1,080 4.00 - 5.80 4.22 - 6.02 55 2.60
-------- -------- -------- ------- -------------- --------------- ------- ---------
8,160 $ 3.84 $ 4.03 4,320 $ 4.00 - 5.80 $ 4.19 - 5.99 220 $ 2.60
======== ======== ======== ======= ============== =============== ======= =========
March 31, 2005 1,500 $ 3.84 $ 4.09 1,500 $ 4.00 - 5.37 $ 4.25 - 5.62 50 $ 2.60
June 30, 2005 1,500 3.73 3.88 1,500 4.00 - 5.37 4.15 - 5.52 50 2.60
September 30, 2005 1,500 3.73 3.88 1,500 4.00 - 5.37 4.15 - 5.52 50 2.60
December 31, 2005 1,500 3.73 3.95 1,500 4.00 - 5.37 4.22 - 5.59 50 2.60
-------- -------- -------- ------- -------------- --------------- ------- ---------
6,000 $ 3.76 $ 3.95 6,000 $ 4.00 - 5.37 $ 4.19 - 5.56 200 $ 2.60
======== ======== ======== ======= ============== =============== ======= =========
Mcf - THOUSAND CUBIC FEET Mmbtu - MILLION BRITISH THERMAL UNITS
Mmcf - MILLION CUBIC FEET Bbtu - BILLION BRITISH THERMAL UNITS
(1) The NYMEX price per Mmbtu floor/cap and the estimated wellhead price per Mcf
for the natural gas collars in 2004 assume the monthly NYMEX settles at $3.00
per Mmbtu or higher. If the monthly NYMEX settles at less than $3.00 per Mmbtu
then the NYMEX price per Mmbtu will be the NYMEX settle plus $1.00 and the
estimated wellhead price per Mcf will be the NYMEX settle plus $1.15 to $1.25.
The NYMEX price per Mmbtu floor/cap and the estimated wellhead price per Mcf for
the natural gas collars in 2005 assume the monthly NYMEX settles at $3.10 per
Mmbtu or higher. If the monthly NYMEX settles at less than $3.10 per Mmbtu then
the NYMEX price per Mmbtu will be the NYMEX settle plus $0.90 and the estimated
wellhead price per Mcf will be the NYMEX settle plus $1.05 to $1.15.
In March 2003, the Company entered into a costless collar for 4,320
Bbtu of its natural gas production in 2004 with a ceiling price of $5.80 per
Mmbtu and a floor price of $4.00 per Mmbtu. The Company also sold a floor at
$3.00 per Mmbtu on this volume of gas. This aggregate structure has the effect
of: 1) setting a maximum price of $5.80 per Mmbtu; 2) floating at prices from
$4.00 to $5.80 per Mmbtu; 3) locking in a price of $4.00 per Mmbtu if prices are
between $3.00 and $4.00 per Mmbtu; and 4) receiving a price of $1.00 per Mmbtu
above the price if the price is $3.00 or less. All prices are based on monthly
NYMEX settle.
In April 2003, the Company entered into a costless collar for 6,000
Bbtu of its natural gas production in 2005 with a ceiling price of $5.37 per
Mmbtu and a floor price of $4.00 per Mmbtu. The Company also sold a floor at
$3.10 per Mmbtu on this volume of gas. This aggregate structure has the effect
of: 1) setting a maximum price of $5.37 per Mmbtu; 2) floating at prices from
$4.00 to $5.37 per Mmbtu; 3) locking in a price of $4.00 per Mmbtu if prices are
between $3.10 and $4.00 per Mmbtu; and 4) receiving a price of $0.90 per Mmbtu
above the price if the price is $3.10 or less. All prices are based on monthly
NYMEX settle.
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 Securities
Exchange Act of 1934 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 Securities Exchange Act of 1934 or incorporates it
by reference into a filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934. 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 10-K and 10-Q reports and
other filings with the Securities and Exchange Commission.
OPERATIONAL OUTLOOK FOR 2003
The Company's operational outlook for 2003 is based on its current
productive wells and its low risk drilling plans for the remainder of 2003. Due
to the uncertainty associated with exploratory drilling, acquisitions and
dispositions, the Company does not include any projection of these activities in
this 2003 outlook. Accordingly, actual results in 2003 may differ significantly
from the outlook provided.
The following table includes estimates given as of March 31, 2003,
that are based on current expectations and currently available information.
These forward-looking statements are subject to a number of risks and
uncertainties which may cause the Company's actual results to differ materially
from the following estimates. The preceding sections address certain of the
risks and uncertainties to which the Company is subject.
QUARTER ENDING YEAR ENDING
MARCH 31, 2003 DECEMBER 31, 2003
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(UNAUDITED, DOLLARS IN MILLIONS, EXCEPT AS NOTED)
Production
Gas (Mmcf) 3,330 - 3,480 14,400 - 14,900
Oil (Mbbls) 93 - 99 374 - 394
Total production (Mmcfe) 3,888 - 4,074 16,644 - 17,264
Production expense per Mcfe $ 1.10 - 1.13 $ 1.04 - 1.09
Production taxes per Mcfe 0.15 - 0.18 0.13 - 0.15
Exploration expense excluding
exploratory dry hole expense $ 2.1 - 2.6 $ 7.0 - 8.0
General and administrative expense 1.0 - 1.1 4.2 - 4.6
Gas gathering, marketing and
oilfield services margin 0.5 - 0.7 2.2 - 2.5
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.
Date: April 10, 2003 BELDEN & BLAKE CORPORATION
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(Registrant)
By: /s/ Robert W. Peshek
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Robert W. Peshek, Vice President
and Chief Financial Officer