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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): MARCH 6, 2001
BRIGHAM EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 000-22433 75-2692967
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6300 BRIDGEPOINT PARKWAY
BUILDING TWO, SUITE 500
AUSTIN, TEXAS 78730
(Address, including zip code, of principal executive offices)
Registrant's telephone number, including area code: (512) 427-3300
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Item 5. OTHER EVENTS.
On March 6, 2001, Brigham Exploration Company ("Brigham") announced the
sale of $10 million in preferred equity in a private placement transaction.
Brigham's receipt of the purchase price and the purchasers' receipt of the
securities are subject to certain conditions discussed below. Upon receipt,
proceeds from this equity placement will further reduce Brigham's balance sheet
leverage and provide additional funding for its 2001 drilling program. On March
6, 2001, Brigham also announced the completion of another high-rate Frio well
and provided an update on its development activities at the Home Run Field.
Also on March 6, 2001, Brigham disclosed its year-end 2000 proved reserves
and finding costs, and also announced its financial results for the quarter and
fiscal year ended December 31, 2000. A copy of Brigham's press release regarding
its year-end results announcements is attached hereto as Exhibit 99.1.
Preferred Stock Placement
Brigham has, subject to certain conditions, sold $10 million in mandatorily
redeemable preferred stock (the "Preferred Stock") and warrants to purchase
Brigham common stock to affiliates of Credit Suisse First Boston ("CSFB").
Affiliates of CSFB invested $20 million in November 2000 to purchase similar
securities as part of a series of financing transactions to fund the purchase of
all subordinated debt and equity securities in Brigham held by affiliates of
Enron North America. The $10 million of Preferred Stock will bear dividends at a
rate of 6% per annum if paid in cash and 8% per annum if paid-in-kind ("PIK")
through the issuance of additional Preferred Stock in lieu of cash. At Brigham's
option, up to 100% of the dividend payments on the Preferred Stock can be
satisfied through the issuance of PIK dividends until November 2005. The
Preferred Stock matures in November 2010 and is redeemable at Brigham's option
at 100% or 101% of par value (depending on certain conditions) at anytime prior
to maturity.
The 2,105,263 warrants to purchase Brigham common stock included in the
transaction (the "CSFB Warrants") have a term of ten years, an exercise price of
$4.75 per share and must be exercised, if Brigham so requires, in the event that
Brigham common stock averages at least $7.13 per share over 60 consecutive
trading days. If Brigham requires exercise of the CSFB Warrants, proceeds from
the exercise will be used to fund the redemption of a similar value of then
outstanding Preferred Stock. The CSFB affiliates will continue to have the right
to designate one member of Brigham's board of directors, currently Steven A.
Webster. Mr. Webster is Managing Director of Global Energy Partners, Ltd., a
merchant banking affiliate of CSFB that makes investments in energy companies.
This transaction is subject to certain conditions relating to approval of
Brigham's shareholders at Brigham's annual shareholder meeting in early May
2001. Holders of a majority of outstanding Brigham common stock have agreed to
vote for approval of the CSFB Warrants at Brigham's 2001 annual shareholder
meeting. Brigham's receipt of the purchase price and the CSFB affiliates'
receipt of the Preferred Stock and the CSFB Warrants will occur if and when the
record date for the annual shareholder meeting (currently expected to be March
21st) occurs, the proxy materials for the annual meeting are not under review by
the SEC and the parties to the voting agreement still hold a majority of
outstanding Brigham common stock.
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Proceeds from the preferred stock placement, along with availability under
Brigham's subordinated note facility and operating cash flow, will finance
Brigham's planned $22 million drilling program and provide additional
flexibility to potentially expand its drilling budget should conditions merit an
increase during the course of the year.
New Frio Completion
Brigham operated the drilling of a 3-D delineated Frio bright spot well in
February 2001. This well was recently completed and is currently producing at a
rate of 17.5 MMcf of natural gas and 290 barrels of condensate per day, or 4.4
MMcfe net to Brigham's 23% net revenue interest. Further, Brigham is currently
drilling an additional Frio bright spot test in which it has retained a 34%
working interest.
Home Run Field Development
Brigham spud its third and fourth development wells in the Home Run Field,
the Palmer State #4 and the D.J. Sullivan C-25 #1, during the fourth quarter of
2000. Completion operations are under way on both wells. The Palmer State #4 has
been perforated and fracture stimulated in the deepest of four potential
Vicksburg pay intervals and tested at rates of 6.4 MMcf of natural gas and 380
barrels of condensate per day, or 2.5 MMcfe net to Brigham's revenue interest,
at a flowing tubing pressure of 5,800 psi. Brigham is continuing to perforate
and stimulate additional Vicksburg pay intervals in the wellbore. Upon
completion and stimulation of all the Lower Vicksburg pay intervals, Brigham
intends to commingle production from all four zones.
The D.J. Sullivan C-25 #1 is the northernmost well drilled in the field to
date and, like the Palmer State #4, is also experiencing excellent test results
early in its completion procedure. The first of several Vicksburg pay intervals
was recently perforated and tested at rates of 7.2 MMcf of natural gas and 420
barrels of condensate per day, or 2.5 MMcfe net to Brigham's revenue interest.
Four additional Vicksburg pay intervals will be stimulated and commingled.
Completion of all testing procedures for the Palmer State #4 and D.J. Sullivan
C-25 #1 wells are expected by late March or early April 2001.
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Item Exhibit
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99.1* Press Release dated
March 6, 2001.
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* filed herewith.
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SIGNATURE
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 thereunto duly authorized.
BRIGHAM EXPLORATION COMPANY
Date: March 7, 2001 By: /s/ Curtis F. Harrell
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Curtis F. Harrell
Chief Financial Officer
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INDEX TO EXHIBITS
Item Number Exhibit
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99.1* Press Release dated
March 6, 2001.