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) June 25, 2004
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BELDEN & BLAKE CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 0-20100 34-1686642
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(State or other jurisdiction (Commission File Number) (IRS Employer
of 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
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 25, 2004, Belden & Blake Corporation (the "Company") completed
the previously announced sale of substantially all of its Trenton Black River
("TBR") assets to Fortuna Energy Inc. ("Fortuna"), a wholly owned subsidiary of
Talisman Energy Inc. of Calgary, Alberta, for $65 million in cash. The assets
sold include working interests in approximately 16 wells, 11 miles of natural
gas gathering lines and oil and gas leases on approximately 475,000 gross acres.
The assets are located primarily in New York, Pennsylvania, Ohio and West
Virginia.
The TBR assets accounted for approximately 5 Bcfe of the Company's
estimated proved reserves as of December 31, 2003 and approximately 2 Mmcfe per
day of our average daily production for the quarter ending March 31, 2004. The
total production from TBR assets for the year ended 2003 was approximately 75
Mmcfe and for the first quarter of 2004 was approximately 157 Mmcfe.
The Company also sold the Michigan assets of its Arrow Oilfield
Services division ("Arrow") in May 2004 and sold the Ohio and
Pennsylvania-related assets of Arrow in June 2004 for net proceeds of
approximately $3.6 million.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) PRO FORMA FINANCIAL INFORMATION
Belden & Blake Corporation Unaudited Pro Forma Consolidated Financial
Statements
Unaudited Pro Forma Consolidated Balance Sheet as of
March 31, 2004
Unaudited Pro Forma Consolidated Statements of Operations for
the year ended December 31, 2003 and for the three months
ended March 31, 2004
Notes to Unaudited Pro Forma Consolidated Financial Statements
BELDEN & BLAKE CORPORATION UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following tables set forth certain of our pro forma financial
information after giving effect to the sale of the Arrow assets and the TBR
operations and the application of the proceeds therefrom (the "Sale of Assets").
The unaudited pro forma consolidated balance sheet as of March 31, 2004 is based
on our unaudited historical consolidated balance sheet as of March 31, 2004 and
gives effect to the Sale of Assets as if it had occurred on March 31, 2004. The
unaudited pro forma consolidated statement of operations for the year ended
December 31, 2003 has been derived from our audited consolidated financial
statements for the year ended December 31, 2003. The unaudited pro forma
consolidated statement of operations for the three months ended March 31, 2004
has been derived from our unaudited financial statements for the three month
period ended March 31, 2004. The pro forma statements of operations give effect
to the Sale of Assets as if it occurred on January 1, 2003. The pro forma
information presented herein does not purport to be indicative of the financial
position or results of operations that would have actually occurred had the Sale
of Assets occurred on the dates indicated or which may occur in the future. All
pro forma adjustments are based on preliminary estimates and assumptions and are
subject to revision.
BELDEN & BLAKE CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2004
(UNAUDITED, IN THOUSANDS)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------------- ---------------- ----------------
(a)
ASSETS
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CURRENT ASSETS
Cash and cash equivalents $ 1,673 $ 23,098 $ 24,771
Accounts receivable, net 17,689 -- 17,689
Inventories 894 (15) 879
Deferred income taxes 9,021 -- 9,021
Other current assets 2,361 -- 2,361
Fair value of derivatives 615 -- 615
---------------- ---------------- ----------------
TOTAL CURRENT ASSETS 32,253 23,083 55,336
PROPERTY AND EQUIPMENT, AT COST
Oil and gas properties (successful efforts method) 471,912 (13,508) 458,404
Gas gathering systems 15,256 -- 15,256
Land, buildings, machinery and equipment 23,069 (9,868) 13,201
---------------- ---------------- ----------------
510,237 (23,376) 486,861
Less accumulated depreciation, depletion and amortization 260,576 (6,209) 254,367
---------------- ---------------- ----------------
PROPERTY AND EQUIPMENT, NET 249,661 (17,167) 232,494
FAIR VALUE OF DERIVATIVES 794 -- 794
OTHER ASSETS 6,942 (1,354) 5,588
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$ 289,650 $ 4,562 $ 294,212
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LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 4,213 $ -- $ 4,213
Accrued expenses 19,498 -- 19,498
Current portion of long-term liabilities 729 -- 729
Fair value of derivatives 20,880 -- 20,880
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TOTAL CURRENT LIABILITIES 45,320 -- 45,320
LONG-TERM LIABILITIES
Bank and other long-term debt 45,437 (45,437) --
Senior subordinated notes 225,000 -- 225,000
Other 4,727 (567) 4,160
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275,164 (46,004) 229,160
FAIR VALUE OF DERIVATIVES 10,320 -- 10,320
DEFERRED INCOME TAXES 18,698 18,710 37,408
SHAREHOLDERS' DEFICIT
Common stock without par value;
$.10 stated value per share; authorized
58,000,000 shares; issued 10,674,803
(which includes 220,784 treasury shares) 1,045 -- 1,045
Paid in capital 107,565 -- 107,565
Deficit (148,604) 31,856 (116,748)
Accumulated other comprehensive loss (19,858) -- (19,858)
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TOTAL SHAREHOLDERS' DEFICIT (59,852) 31,856 (27,996)
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$ 289,650 $ 4,562 $ 294,212
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See notes to pro forma consolidated financial statements.
BELDEN & BLAKE CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
YEAR ENDED DECEMBER 31, 2003 THREE MONTHS ENDED MARCH 31, 2004
----------------------------------- ------------------------------------
(a) PRO FORMA (a) PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA
---------- ------------ --------- ---------- ------------ ---------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
REVENUES
Oil and gas sales $ 85,023 $ (418) $ 84,605 $ 23,244 $ (881) $ 22,363
Gas gathering, marketing,
and oilfield service 23,741 (13,203) 10,538 5,774 (3,191) 2,583
Other 338 (72) 266 168 (39) 129
--------- --------- --------- --------- --------- ---------
109,102 (13,693) 95,409 29,186 (4,111) 25,075
EXPENSES
Production expense 19,937 40 19,977 5,419 (25) 5,394
Production taxes 2,455 (6) 2,449 664 (12) 652
Gas gathering, marketing,
and oilfield service 21,378 (11,791) 9,587 5,177 (2,939) 2,238
Exploration expense 16,882 (10,089) 6,793 2,077 (595) 1,482
General and administrative expense 4,559 -- 4,559 1,235 -- 1,235
Franchise, property and other taxes 282 (80) 202 86 (16) 70
Depreciation, depletion and amortization 19,343 (1,274) 18,069 4,947 (393) 4,554
Impairment of oil and gas properties 5,774 (4,878) 896 -- -- --
Accretion expense 365 (38) 327 112 (17) 95
Derivative fair value (gain) loss (319) -- (319) (332) -- (332)
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90,656 (28,116) 62,540 19,385 (3,997) 15,388
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OPERATING INCOME 18,446 14,423 32,869 9,801 (114) 9,687
OTHER EXPENSE
Interest expense 25,537 (1,014) 24,523 6,543 (377) 6,166
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(LOSS) INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (7,091) 15,437 8,346 3,258 263 3,521
(Benefit) provision for income taxes (2,481) 5,495 3,014 1,206 97 1,303
--------- --------- --------- --------- --------- ---------
(LOSS) INCOME FROM CONTINUING OPERATIONS $ (4,610) $ 9,942 $ 5,332 $ 2,052 $ 166 $ 2,218
========= ========= ========= ========= ========= =========
See notes to pro forma consolidated financial statements.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(a) Represents adjustments for the sale of the Arrow assets and the TBR
operations.
(c) EXHIBITS
The following exhibit is filed herewith:
99.1 News release dated June 29, 2004 announcing the closing of the
sale of the Company's TBR assets on June 25, 2004.
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: July 9, 2004 BELDEN & BLAKE CORPORATION
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(Registrant)
By: /s/ Robert W. Peshek
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Robert W. Peshek, Senior Vice President
and Chief Financial Officer