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 (Date of earliest event reported):
March 27, 2001 (November 17, 2000)
Empire Energy Corporation
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(Exact Name of Registrant as specified in its charter)
Utah 1-10077 87-0401761
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(State or other jurisdiction) (Commission file number) (IRS Employer ID No.)
7500 College Boulevard, Suite 1215, Overland Park, Kansas 66210
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(address of principal executive offices) (zip code)
(913) 469-5615
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(Registrant's telephone number, including area code)
Item 2. Acquisition or Disposition of Assets
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Beginning on November 17, 2000, Empire Energy Corporation ("Registrant")
acquired working interests in a gas production property in Leon County, Texas,
primarily from Trend Capital Corporation. The total consideration paid for these
interests was 1,784,000 shares of newly issued Empire common stock at a fair
value of $2,062,661 or $1.1562 per share based on the closing price on November
17, 2000.
The property acquired consists cumulatively of 44.6% of the working
interest in the 703.96 acre Bedsole Unit located in Leon County, Texas. One well
has been drilled on this property, but the well has not yet been completed and
there has been no gas production to date. Engineering studies of this property
support probable total reserves of 30 Billion Cubic feet of Gas with a total net
probable recovery of 12 Billion Cubic feet of Gas. Completion of the well is
expected during the first half of 2001 with production and operations to begin
after completion of this first well. The property includes potential additional
well locations that will be evaluated in conjunction with the results of the
first well.
Item 7. Financial Statements and Exhibits.
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(a) Financial Statements
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Audited financial statements of the acquired property are not required as
the property is presently under development and has no operating history.
Therefore, it does not meet the Securities and Exchange Commissions definition
of a business.
(b) Pro forma Financial Statements
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Pro forma balance sheet information of Registrant and the acquired property
is not required, however is included here for informational purposes. Pro forma
statements of operations are not included because the property has no operating
history and until the initial well is complete, is under development and not
subject to amortization.
(c) Exhibits
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Unaudited pro forma consolidated condensed financial statement.
Assignment of working interest agreements.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, as
amended, the registrant has caused this report to be signed on its behalf by the
undersigned duly authorized officer.
Empire Energy Corporation
(Registrant)
Dated: March 27, 2001 By: /s/ Norman L. Peterson
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Norman L. Peterson
Chairman, Chief Executive Officer
EMPIRE ENERGY CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The unaudited pro forma consolidated condensed balance sheet has been prepared
utilizing the historical financial statements of Empire. The unaudited pro forma
consolidated condensed balance sheet should be read in conjunction with the
historical financial statements of Empire. The acquired property has no prior
operating history and includes one well that has not yet been completed and no
gas production has begun.
The unaudited pro forma consolidated condensed balance sheet as of September 30,
2000 gives effect to the acquisition of the property including the related pro
forma adjustments described in the notes thereto. Unaudited pro forma
consolidated condensed statements of operations for the year ended December 31,
1999 and the nine months ended September 30, 2000 are not included because the
property has no prior production operations and until the initial well is
complete, the property is under development and not subject to amortization. The
unaudited pro forma consolidated condensed balance sheet as of September 30,
2000 gives effect to the acquisition as if it had occurred on September 30,
2000. The pro forma financial statements reflect the preliminary allocation of
the purchase price. The purchase price for the acquired property will be
finalized upon the completion of management's review and resolution of the
purchase contingencies.
The unaudited pro forma consolidated condensed financial statements may not be
indicative of the results that actually would have occurred if the acquisition
had been effective on the date indicated or which may be obtained in the future.
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EMPIRE ENERGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
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Unaudited
Historical Pro Forma
ASSETS September 30, Pro Forma September 30,
------ 2000 Adjustments 2000
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CURRENT ASSETS
Cash $ 46,368 $ -- 46,368
Accounts receivable, net 40,500 -- 40,500
Inventories 179,158 -- 179,158
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TOTAL CURRENT ASSETS 266,026 -- 266,026
PROPERTY AND EQUIPMENT, NET 65,443 -- 65,443
OIL AND GAS PROPERTIES, NET -- (a) 2,062,661 2,062,661
OTHER ASSETS:
Marketable securities 59,291 -- 59,291
Receivables - related party 109,595 -- 109,595
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TOTAL ASSETS $ 500,355 $ 2,062,661 $ 2,563,016
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LIABILITIES
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CURRENT LIABILITIES
Accounts payable and accrued
expenses $ 885 $ -- 885
Notes payable - related parties 22,500 -- 22,500
Convertible debentures 20,000 -- 20,000
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TOTAL CURRENT LIABILITIES 43,385 -- 43,385
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STOCKHOLDERS' EQUITY
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STOCKHOLDERS' EQUITY
Common stock 13,712 (a) 1,784 15,496
Additional paid-in-capital 9,741,197 (a) 2,060,877 11,802,074
Treasury stock (1,125,000) -- (1,125,000)
Accumulated other comprehensive loss (21,906) -- (21,906)
Previous accumulated deficit (1,867,999) -- (1,867,999)
Accumulated deficit (6,283,034) -- (6,283,034)
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TOTAL STOCKHOLDERS' EQUITY 456,970 2,062,661 2,519,631
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 500,355 $ 2,062,661 $ 2,563,016
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See Notes
F-2
EMPIRE ENERGY CORPORATION
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Acquisition of Certain Gas Property
In November and December 2000, Empire Energy Corporation ("Empire") acquired
approximately 44.6% of the working interest in a gas property of approximately
704 acres in Leon County, Texas, primarily from Trend Capital Corporation. The
total consideration paid was 1,784,000 shares of Empire common stock with a
market value of $2,062,661 based on a closing market price on November 17, 2000
of $1.1562 per share.
The acquired property is estimated to contain approximately 30 billion cubic
feet (Bcf) of probable gas reserves with a total net probable recovery of 12
Bcf. The property includes one well that is under development with completion
expected during the first half of 2001. Future development of additional wells
on the property will be evaluated in conjunction with the results of this first
well.
The cost of this well will be included in the full cost amortization calculation
upon the completion of the well and the beginning of production or the
determination that the well is unsuccessful. The full cost amortization
calculation will charge a proportionate amount of the cost of the well to
operations based on the amount of gas produced compared to engineering estimates
of the total amount of gas expected to be produced from the well.
The unaudited pro forma adjustments record the issuance of 1,784,000 shares of
common stock with a market value of $2,062,661 for the acquisition of the gas
property.
F-3