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
Date of Report (Date of earliest event) July 7, 2004
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 (Commission File (IRS Employer
of incorporation) Number) 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
Belden & Blake Corporation (the "Company") filed a Form 8-K on July 7,
2004, related to the Company's merger with Capital C Energy Operations, LP, a
Delaware limited partnership ("Capital C"), and Capital C Ohio, Inc., an Ohio
corporation and a wholly owned subsidiary of Capital C ("Merger Sub") pursuant
to which Merger Sub was merged with and into the Company (the "Merger"), with
Belden & Blake Corporation surviving the Merger as a wholly owned subsidiary of
Capital C. The Merger resulted in a change in control of the Company.
Substantially concurrent with the closing of the Merger, the Company consummated
the following related transactions:
- Execution of a new senior secured credit agreement providing for a
$100 million term facility, a $30 million revolving credit facility
and a $40 million letter of credit facility and related documents;
- Issuance of $192,500,000 8.75% Senior Secured Notes due 2012 and
execution of a related indenture and registration rights agreement;
- Establishment of long-term hedging arrangements pursuant to a master
agreement and related documents with J. Aron, as more fully
described in Item 5 below.
This Form 8-K/A includes additional disclosures relating to these
transactions in "Item 1. Changes in Control of Registrant" and "Item 5. Other
Events and Regulation FD Disclosure" below. In addition, this Form 8-K/A
includes as exhibits the executed documents governing these transactions.
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
The Company's management team remained with the Company after the Merger
with the exception of the retirement of the former Chief Executive Officer, John
L. Schwager. Frost W. Cochran is the Company's new Chief Executive Officer. In
addition, Gregory A. Beard joined the Company as Executive Vice President,
Assistant Secretary and Director; and B. Dee Davis and W. Mac Jensen joined the
Company as Senior Vice Presidents. Upon consummation of the Merger all former
directors of the Company resigned and the new Board of Directors consists of six
members, each of whom is elected annually to serve one-year terms. The initial
six members of the Board of Directors are Frost W. Cochran, David M. Carmichael,
Michael B. Hoffman, Pierre F. Lapeyre, Jr., David M. Leuschen, and Gregory A.
Beard.
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE
NATURAL GAS HEDGE POSITION
At the time of the Merger, the Company became a party to long-term
commodity hedges (the "Hedges") and reestablished existing commodity hedge
transactions for the remainder of 2004 and for 2005 with a counterparty. The
Hedges primarily take the form of monthly settled fixed-price swaps in respect
of the settlement prices for the market standard New York Mercantile Exchange
("NYMEX") futures contracts on natural gas and crude oil. The Company will pay a
NYMEX-based floating price per Mmbtu, in the case of Hedges on natural gas, and
will pay a NYMEX-based floating price per Bbl, in the case of Hedges on crude
oil, for each month during the term of the Hedges and will receive a fixed price
per Mmbtu or Bbl (as the case may be) in accordance with a monthly schedule of
fixed prices.
The following tables reflect the natural gas and crude oil volumes and the
weighted average prices under financial hedges (including settled hedges) at
July 8, 2004:
NATURAL GAS SWAPS NATURAL GAS COLLARS CRUDE OIL SWAPS
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NYMEX NYMEX PRICE NYMEX
PRICE PER PER MMBTU ESTIMATED PRICE PER
BBTU MMBTU BBTU FLOOR/CAP (1) MBBLS BBL
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QUARTER ENDING
September 30, 2004 2,040 $ 3.82 1,080 $ 4.00 - 5.77 74 $ 36.06
December 31, 2004 2,040 3.81 1,080 4.00 - 5.76 74 35.68
------ ------ ----- ------------- --- -------
4,080 $ 3.82 2,160 $ 4.00 - 5.76 148 $ 35.87
====== ====== ===== ============= === =======
March 31, 2005 1,500 $ 3.81 1,500 $ 4.00 - 5.32 68 $ 34.76
June 30, 2005 1,500 3.70 1,500 4.00 - 5.32 68 34.18
September 30, 2005 1,500 3.70 1,500 4.00 - 5.32 67 33.72
December 31, 2005 1,500 3.70 1,500 4.00 - 5.32 67 33.31
------ ------ ----- ------------- --- -------
6,000 $ 3.73 6,000 $ 4.00 - 5.32 270 $ 34.00
====== ====== ===== ============= === =======
March 31, 2006 2,829 $ 6.14 63 $ 32.71
June 30, 2006 2,829 5.24 62 32.35
September 30, 2006 2,829 5.22 62 32.02
December 31, 2006 2,829 5.39 62 31.71
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11,316 $ 5.50 249 $ 32.20
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YEAR ENDING
December 31, 2007 10,745 $ 4.97 227 $ 30.91
December 31, 2008 10,126 4.64 208 29.96
December 31, 2009 9,529 4.43 191 29.34
December 31, 2010 8,938 4.28 175 28.86
December 31, 2011 8,231 4.19 157 28.77
December 31, 2012 7,005 4.09 138 28.70
December 31, 2013 6,528 4.04 127 28.70
BBL - BARREL MMBTU - MILLION BRITISH THERMAL UNITS
MBBLS - THOUSAND BARRELS BBTU - BILLION BRITISH THERMAL UNITS
(1) The NYMEX price per Mmbtu floor/cap 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. The NYMEX price per Mmbtu floor/cap 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.
The proximity of our properties in the Appalachian and Michigan basins to
large commercial and industrial natural gas markets has generally resulted in
premium wellhead gas prices compared with the prices of NYMEX futures contracts
for gas delivered at the Henry Hub in Louisiana. Monthly spot natural gas prices
in our market areas are typically 15 to 60 cents higher per Mcf than comparable
NYMEX prices. The Company's average price received for crude oil is typically
$2.50 to $3.25 per barrel below the NYMEX price per barrel.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
The following exhibits are filed herewith:
2.1 Agreement and Plan of Merger, dated as of June 15, 2004, by and among
Capital C Energy Operations, LP, Capital C Ohio, Inc. and Belden & Blake
Corporation
4.1 Supplemental Indenture, dated as of July 2, 2004, by and among Belden &
Blake Corporation, the Subsidiary Guarantors, as guarantors, and La Salle
National Bank, as trustee
4.2 Indenture, dated as of July 7, 2004, by and among Belden & Blake
Corporation, The Canton Oil & Gas Company, Ward Lake Drilling, Inc. and
BNY Midwest Trust Company
10.1 ISDA Master Agreement, dated as of June 30, 2004, between Capital C Ohio,
Inc. and J. Aron & Company
10.2 Credit and Guaranty Agreement, dated as of July 7, 2004, among Belden &
Blake Corporation, The Canton Oil & Gas Company and Ward Lake Drilling,
Inc., as Guarantors, various Lenders, and Goldman Sachs Credit Partners
L.P., as Sole Lead Arranger, Sole Bookrunner, Syndication Agent and
Administrative Agent
10.3 Priority Lien Pledge and Security Agreement, dated as of July 7, 2004,
between Belden & Blake Corporation, The Canton Oil & Gas Company, Ward
Lake Drilling, Inc. and Wells Fargo Bank, N.A., as Collateral Trustee
10.4 Parity Lien Pledge and Security Agreement, dated as of July 7, 2004,
between Belden & Blake Corporation, The Canton Oil & Gas Company, Ward
Lake Drilling, Inc. and Wells Fargo Bank, N.A., as Collateral Trustee
10.5 Priority Lien Pledge Agreement, dated as of July 7, 2004, between Capital
C Energy Operations, LP and Wells Fargo Bank, N.A., as Collateral Trustee
10.6 Parity Lien Pledge Agreement, dated as of July 7, 2004, between Capital C
Energy Operations, LP and Wells Fargo Bank, N.A., as Collateral Trustee
10.7 Collateral Trust Agreement, dated as of July 7, 2004, among Belden & Blake
Corporation, the other Pledgors party from time to time thereto, Goldman
Sachs Credit Partners L.P., as Administrative Agent under the Credit
Agreement, J. Aron & Company, as Hedge Counterparty under the Hedge
Agreement, BNY Midwest Trust Company, as Trustee under the Indenture, and
Wells Fargo Bank, N.A., as Collateral Trustee
10.8 Guaranty Agreement, dated as of July 7, 2004, by J. Aron & Company, The
Canton Oil & Gas Company and Ward Lake Drilling, Inc.
10.9 Management Services Agreement, dated as of July 7, 2004, by and between
Capital C Energy Operations, LP and Belden & Blake Corporation
10.10 Termination and Release Agreement, dated as of July 7, 2004, by and among
Belden & Blake Corporation, The Canton Oil & Gas Company, Ward Lake
Drilling, Inc., Ableco Finance LLC and Wells Fargo Foothill, Inc.
10.11 Purchase Agreement, dated as of July 1, 2004, by and among Belden & Blake
Corporation, The Canton Oil & Gas Company, Ward Lake Drilling, Inc. and
Goldman, Sachs & Co.
10.12 Exchange and Registration Rights Agreement, dated as of July 7, 2004, by
and among Belden & Blake Corporation, The Canton Oil & Gas Company, Ward
Lake Drilling, Inc. and Goldman, Sachs & Co.
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 22, 2004 BELDEN & BLAKE CORPORATION
(Registrant)
By: /s/ Robert W. Peshek
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Robert W. Peshek, Senior Vice President
and Chief Financial Officer