1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
------------------
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to ___________
Commission File Number 1-7796
TIPPERARY CORPORATION
(Exact name of small business issuer as specified in its charter)
Texas 75-1236955
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
633 Seventeenth Street, Suite 1550
Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
(303) 293-9379
Issuer's telephone number
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding August 14, 2000
- - ---------------------------- ---------------------------
Common Stock, $.02 par value 24,463,587 shares
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TIPPERARY CORPORATION AND SUBSIDIARIES
Index to Form 10-QSB
Page No.
PART I. FINANCIAL INFORMATION (UNAUDITED)
Item 1. Financial Statements
Consolidated Balance Sheet
June 30, 2000 and September 30, 1999 1
Consolidated Statement of Operations
Three months and nine months ended June 30, 2000 and 1999 2
Consolidated Statement of Cash Flows
Nine months ended June 30, 2000 and 1999 3
Notes to Consolidated Financial Statements 4-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13-15
SIGNATURES 16
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TIPPERARY CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
(in thousands)
(unaudited)
June 30, September 30,
2000 1999
------------ -------------
ASSETS
Current assets:
Cash and cash equivalents $ 9,044 $ 430
Receivables 1,619 1,525
Inventory -- 209
Other current assets 1,712 899
Properties held for sale (Note 3) 4,077 --
------------ ------------
Total current assets 16,452 3,063
------------ ------------
Property, plant and equipment, at cost:
Oil and gas properties, full cost method 36,926 136,562
Other property and equipment 1,022 2,402
------------ ------------
37,948 138,964
Less accumulated depreciation, depletion and amortization (2,013) (95,642)
------------ ------------
Property, plant and equipment, net 35,935 43,322
------------ ------------
Noncurrent portion of deferred income taxes, net (Note 9) -- 1,573
Other noncurrent assets 277 47
------------ ------------
$ 52,664 $ 48,005
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of note payable - related party $ 227 $ 174
Accounts payable and accrued liabilities 1,959 2,418
Royalties payable 292 201
------------ ------------
Total current liabilities 2,478 2,793
------------ ------------
Long-term debt -- 11,800
Long-term notes payable - related party 10,848 9,465
Commitments and contingencies (Note 5)
Minority interest 277 495
Stockholders' equity
Common stock; par value $.02; 50,000,000 shares
authorized; 24,173,185 issued and 24,163,587
outstanding at June 30, 2000; 15,161,755 issued and
15,152,157 outstanding at September 30, 1999 483 303
Capital in excess of par value 121,947 107,977
Accumulated deficit (83,344) (84,803)
Treasury stock, at cost; 9,598 shares (25) (25)
------------ ------------
Total stockholders' equity 39,061 23,452
------------ ------------
$ 52,664 $ 48,005
============ ============
See accompanying notes to consolidated financial statements.
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TIPPERARY CORPORATION AND SUBSIDIARIES
Consolidated Statement of Operations
(in thousands, except per share data)
(unaudited)
Three months ended Nine months ended
June 30, June 30,
---------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
Revenues $ 1,811 $ 2,063 $ 7,746 $ 5,420
Costs and expenses:
Operating 1,034 1,167 3,777 3,427
Depreciation, depletion and amortization 195 675 825 2,555
General and administrative 1,096 454 2,632 1,692
Write-down of oil and gas properties -- -- -- 5,727
------------ ------------ ------------ ------------
Total costs and expenses 2,325 2,296 7,234 13,401
------------ ------------ ------------ ------------
Operating income (loss) (514) (233) 512 (7,981)
Other income (expense):
Interest income 25 2 54 10
Interest expense (348) (393) (1,350) (1,157)
Gain on sale of assets 4,093 -- 4,093 --
Foreign currency exchange gain (loss) (30) 12 (76) 34
------------ ------------ ------------ ------------
Total other income (expense) 3,740 (379) 2,721 (1,113)
------------ ------------ ------------ ------------
Income (loss) before income taxes 3,226 (612) 3,233 (9,094)
Income tax expense 1,913 -- 1,913 --
------------ ------------ ------------ ------------
Net income (loss) before minority interest 1,313 (612) 1,320 (9,094)
Minority interest in loss of subsidiary 86 34 218 72
------------ ------------ ------------ ------------
Net income (loss) $ 1,399 $ (578) $ 1,538 $ (9,022)
============ ============ ============ ============
Net income (loss) per share
Basic $ 0.06 $ (.04) $ 0.07 $ (.62)
============ ============ ============ ============
Diluted $ 0.06 $ (.04) $ 0.07 $ (.62)
============ ============ ============ ============
Weighted average shares outstanding
Basic 24,164 15,134 20,109 14,533
============ ============ ============ ============
Diluted 24,968 15,134 20,394 14,533
============ ============ ============ ============
See accompanying notes to consolidated financial statements.
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TIPPERARY CORPORATION AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(in thousands)
(unaudited)
Nine months ended
June 30,
------------------------------
2000 1999
------------- -------------
Cash flows from operating activities:
Net income (loss) $ 1,538 $ (9,022)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation, depletion and amortization 825 2,555
Gain on sale of assets (4,093) --
Deferred tax expense 1,573 --
Write-down of oil and gas properties -- 5,727
Minority interest in loss of subsidiary (218) (72)
Change in assets and liabilities:
(Increase) decrease in receivables (94) 122
Increase in other current assets (813) (334)
Increase (decrease) in accounts payable and
accrued liabilities (459) 577
Increase in royalties payable 91 39
------------- -------------
Net cash used in operating activities (1,650) (408)
------------- -------------
Cash flows from investing activities:
Net proceeds from asset sales 15,950 705
Capital expenditures (7,267) (3,462)
------------- -------------
Net cash provided by (used in) investing activities 8,683 (2,757)
------------- -------------
Cash flows from financing activities:
Proceeds from borrowing 1,585 4,994
Principal repayments (11,950) (4,700)
Proceeds from issuance of stock 10,513 2,228
Proceeds from subsidiary sale of stock -- 610
Proceeds from issuance of warrants 1,776 310
Payment of dividends (79) --
Payments for debt financing (264) (4)
------------- -------------
Net cash provided by financing activities 1,581 3,438
------------- -------------
Net increase in cash and cash equivalents 8,614 273
Cash and cash equivalents at beginning of period 430 633
------------- -------------
Cash and cash equivalents at end of period $ 9,044 $ 906
============= =============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 1,087 $ 1,006
Income taxes $ -- $ --
Non-cash investing and financing activities:
Issuance of stock to acquire assets $ 1,861 $ --
See accompanying notes to consolidated financial statements.
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TIPPERARY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
In the opinion of management, the accompanying unaudited financial statements
reflect all adjustments, consisting only of normal recurring adjustments, which
are necessary for a fair presentation of the consolidated financial position of
Tipperary Corporation and its subsidiaries (the "Company") at June 30, 2000, and
the results of its operations for the three-month and nine-month periods ended
June 30, 2000 and 1999. The consolidated financial statements include the
accounts of Tipperary Corporation and its wholly-owned subsidiaries, Tipperary
Oil and Gas Corporation and Burro Pipeline Corporation, and its 90%-owned
subsidiary, Tipperary Oil and Gas (Australia) Pty Ltd, and its share of assets,
liabilities, revenues and expenses of unincorporated joint ventures. All
intercompany balances have been eliminated. The accounting policies followed by
the Company are included in Note 1 to the Consolidated Financial Statements in
the Annual Report on Form 10-K for the fiscal year ended September 30, 1999.
These financial statements should be read in conjunction with the Form 10-K.
Impact of New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting
for Derivative Instruments and Hedging Activities." This statement requires
companies to report the fair market value of derivatives on the balance sheet
and record in income or other comprehensive income, as appropriate, any changes
in the fair value of the derivatives. SFAS 133, as amended by SFAS 137, is
effective for all fiscal quarters of fiscal years beginning after June 15,
2000. In June 2000, the FASB issued SFAS 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities, an amendment of SFAS
133" ("SFAS 138"), which modifies or more clearly defines certain requirements
of SFAS 133. While the Company has hedged risks associated with oil and gas
price volatility in the past and anticipates using derivatives to hedge foreign
exchange and/or gas production in the future, it is not using derivatives
currently and cannot reasonably determine the impact of SFAS 133 and SFAS 138
at this time. The Company expects to adopt SFAS 133 and SFAS 138 effective
October 1, 2000.
In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial
Statements" that provides guidance on the recognition, presentation and
disclosure of revenue in financial statements filed with the SEC. SAB No. 101
outlines the basic criteria that must be met to recognize revenue and provides
guidance for disclosures related to revenue recognition policies. In June 2000,
the SEC issued SAB No. 101B, which delayed the implementation of SAB No. 101 to
no later than the fourth quarter of fiscal years beginning after December 15,
1999. The Company will be required to adopt SAB No. 101 in the fourth quarter
of fiscal 2001.
NOTE 2 - RELATED PARTY TRANSACTIONS
On December 23, 1999, the Company closed a financing transaction with its
largest shareholder, Slough Estates USA Inc. ("Slough"), whereby Slough
purchased 6,329,114 shares of the Company's 1999 Series A Convertible
Cumulative Preferred Stock for $10,000,000, or $1.58 per share. At closing
Slough converted 2,900,000 shares of the convertible preferred stock into
2,900,000 shares of restricted common stock. Also, at the closing, the Company
issued Slough warrants for 1,200,000 shares of common stock at an exercise
price of $2.00 per share. The warrants may be exercised during an eight-year
period beginning December 23, 2001 and ending December 23, 2009. The Company
used $4,000,000 of proceeds from this financing to reduce bank debt from
$11,800,000 to $7,800,000. The remaining proceeds have been used for general
corporate purposes.
Effective February 29, 2000, Slough converted the remaining shares of preferred
stock into 3,429,114 shares of restricted common stock, bringing the Company's
total common stock outstanding to 24,163,587 shares. Slough currently owns
approximately 54% of the Company's outstanding common stock. During the quarter
ended June 30, 2000, the Company paid a cash dividend of approximately $79,000
to Slough for the period the preferred shares were outstanding.
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TIPPERARY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
NOTE 3 - OIL & GAS PROPERTIES HELD FOR SALE
Properties held for sale at June 30, 2000, consists of the Company's U.S. oil
and gas properties and equipment inventory, which are being divested in
connection with the Company's redirection of focus towards increasing reserves
and production of natural gas from coalbed methane properties. During the nine
months ended June 30, 2000, the Company received approximately $16,700,000 from
the sale of U.S. oil and gas assets and incurred related costs of approximately
$750,000. During the nine months ended June 30, 2000, the Company used net sales
proceeds to pay off the remaining balance of bank debt.
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS 121") requires that such assets be reported at the lower of carrying
amount or fair value less cost to sell. The Company's domestic oil and gas
properties had a total carrying value of $15,087,000 at March 31, 2000, and
$4,077,000 at June 30, 2000. The decrease of $11,010,000 resulted from sales of
75% of the Company's domestic reserve volumes as of September 30, 1999,
resulting in a recorded gain of $4,093,000. The carrying value of the properties
held for sale will also be adjusted as required until all the properties are
sold to exclude costs associated with properties that the Company may ultimately
choose not to sell and to include costs incurred to sell the properties. Assets
to be disposed of and covered by SFAS 121 are not subject to depreciation,
depletion or amortization ("DD&A") once there is a commitment or plan to dispose
of the assets. Included in DD&A expense for the period ended June 30, 2000 is
$244,000 associated with U.S. oil and gas properties for the period prior to the
date the Company decided to sell the assets. Revenues less operating expenses
from assets either sold or held for sale as of June 30, 2000, were $511,000 and
$3,485,000, respectively during the three and nine months ended.
NOTE 4 - EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings
(loss) per share (in thousands except per share data):
Three months ended Nine months ended
June 30, June 30,
--------------------- ----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
Numerator:
Net income (loss) $ 1,399 $ (578) $ 1,538 $ (9,022)
Less: preferred stock dividends -- -- (79) --
--------- --------- --------- ---------
Net income (loss) available for common stockholders $ 1,399 $ (578) $ 1,459 $ (9,022)
========= ========= ========= =========
Denominator:
Weighted average shares outstanding 24,164 15,134 20,109 14,533
Effect of dilutive securities:
Assumed conversion of dilutive options 805 -- 285 --
--------- --------- --------- ---------
Weighted average shares and dilutive potential
common shares 24,968 15,134 20,394 14,533
========= ========= ========= =========
Basic earnings (loss) per share $ 0.06 $ (0.04) $ 0.07 $ (0.62)
========= ========= ========= =========
Diluted earnings (loss) per share $ 0.06 $ (0.04) $ 0.07 $ (0.62)
========= ========= ========= =========
Potentially dilutive common stock shares from the exercise of options and
warrants were excluded from the calculation of diluted earnings (loss) per
share for the three and nine months ended June 30, 1999, as their effect was
antidilutive.
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TIPPERARY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
NOTE 5 - COMMITMENTS AND CONTINGENCIES
The Company is plaintiff in a lawsuit filed on August 6, 1998, styled Tipperary
Corporation and Tipperary Oil & Gas (Australia) Pty Ltd v. Tri-Star Petroleum
Company, Cause No. CV42,265, in the District Court of Midland County, Texas
involving the Comet Ridge coalbed methane project in Queensland, Australia. By
amended petition filed May 1, 2000, Tipperary Oil & Gas Corporation joined the
action as a plaintiff, along with the already-named plaintiffs and two
unaffiliated non-operating working interest owners who previously intervened in
the action as plaintiffs. James H. Butler, Sr., and James H. Butler, Jr.,
owners of defendant Tri-Star Petroleum Company, were also named as defendants
in the amended petition. The Company and the other plaintiffs allege, among
other matters, that Tri-Star and/or the individual defendants have failed to
operate the properties in a good and workmanlike manner and have committed
various other breaches of a joint operating contract, have breached a previous
mediation agreement between the parties, have committed certain breaches of
fiduciary and other duties owed to the plaintiffs, and have committed fraud in
connection with the project. Tri-Star has answered the original petition, and
has denied the allegations and asserted counterclaims against the Company for
breach of a joint operating agreement, breach of the mediation agreement, and
interference with prospective contracts and business relations. No specific sum
has been pleaded as damages. The defendants have not yet answered the amended
petition filed May 1, 2000. Discovery is in progress.
On March 14, 1997, the Company filed a complaint along with several other
plaintiffs in BTA Oil Producers, et al. v. MDU Resources Group, Inc., et al. in
Stark County Court in the Southwest Judicial District of North Dakota. The
plaintiffs are suing the defendants for breach of gas sales contracts, unjust
enrichment, implied trust and related business torts. The case concerns the
sale by plaintiffs and certain predecessors of natural gas processed at the
McKenzie Gas Processing Plant in North Dakota to Koch Hydrocarbons Company. It
also concerns the contracts for resale of that gas to MDU Resources Group, Inc.
and Williston Basin Interstate Pipeline Company. The defendants have answered
the complaint denying the claims, and discovery is in process.
NOTE 6 - ACQUISITION OF ADDITIONAL INTERESTS IN COMET RIDGE PROJECT
In February 2000, the Company acquired additional interests in the Comet Ridge
coalbed methane project in Queensland, Australia. The total interest acquired
was 5.5% in capital-bearing interest, bringing the Company's total interest to
61.25% The total purchase price was approximately $5,161,000 and included cash
of $3,300,000 and stock valued at $1,861,000. The cash portion of the purchase
price was paid using cash on hand of $900,000 and $2,400,000 of proceeds from
the sale of 1,518,988 shares of common stock at $1.58 per share to two
individual investors. The remaining purchase price of approximately $1,861,000
was paid to the sellers with the issuance of 1,163,328 shares of the Company's
common stock at $1.60 per share. Subsequent to June 30, 2000, the Company
acquired an additional 1.0% capital-bearing interest for 300,000 shares of the
Company's common stock valued at $3.50 per share for a total purchase price of
$1,050,000. The Company now has a capital-bearing interest of 62.25%.
NOTE 7 - COMET RIDGE DEVELOPMENT AND PROJECT FINANCING
On April 28, 2000, the Company entered into a credit agreement with TCW Asset
Management Company ("Credit Agreement") that provides a borrowing facility of up
to $17 million upon the satisfaction of certain conditions. An initial loan
advance of up to $6 million will be used to repay the existing Comet Ridge
project financing loan due to Slough with the balance to be used for
lender-approved working capital purposes. Additional loan advances of up to $11
million will be available to finance continued development of the Comet Ridge
project.
The obligation to repay the advances and accrued interest will be evidenced by
senior secured promissory notes bearing interest at the rate of 10% per annum
and payable quarterly. Principal payments will be due quarterly in an amount
equal to the greater of a percentage of cash flow as defined or a scheduled
minimum principal payment. The scheduled minimum principal payment
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TIPPERARY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
begins March 2003 and will be equal to 5% of the unpaid principal balance,
increasing to 9% in March 2004 and 10% in March 2005. The outstanding principal
balance on the notes is due and payable in full on March 30, 2006.
Among the various conditions for funding to be met under the Credit Agreement
are: 1) that TCW obtain satisfaction that a 20-well drilling program proposed by
the Company will be undertaken on a schedule acceptable to TCW under the Credit
Agreement; and 2) that the Company enter into and offer to other owners an
agreement to supply additional volumes of gas to ENERGEX. The Company has
executed and distributed the gas supply agreement and certain other owners have
elected to participate as well. The Company recently proposed a 20-well drilling
program in accordance with the provisions of the joint operating agreement
governing the project and is awaiting the execution of the program by the
operator. The Company has also offered to extend non-recourse financing to fund
the other owners' share of the proposed drilling and pipeline connection costs.
At this time it is not known what percentage, if any, of other owners will
utilize the Company's financing. The $17 million loan facility includes advances
to cover any loans that would be extended to the other owners. The Company
expects to have all conditions for funding met and for drilling operations on
the Comet Ridge project to begin in the near term.
NOTE 8 - OPERATIONS BY GEOGRAPHIC AREA
The Company has one operating and reporting segment - oil and gas exploration,
development and production - in the United States and Australia. Information
about the Company's operations for the nine months ended June 30, 2000 and 1999,
by geographic area is shown below (in thousands):
United
States Australia Total
------------ ------------ ------------
Nine months ended June 30, 2000
Revenues $ 6,248 $ 1,498 $ 7,746
Identifiable assets $ 14,821 $ 37,843 $ 52,664
Nine months ended June 30, 1999
Revenues $ 4,610 $ 810 $ 5,420
Identifiable assets $ 19,498 $ 26,141 $ 45,639
NOTE 9 - DEFERRED INCOME TAXES
Income tax expense consists of the following (in thousands):
Nine months ended
June 30,
---------------------
2000 1999
-------- ------
Current $ 340 $ --
Deferred 1,573 --
-------- ------
Total income tax expense $ 1,913 $ --
======== ======
At September 30, 1999, the Company had a net deferred tax asset of $1,573,000,
which represented management's best estimate of the realizable benefit of the
Company's net operating loss carryforwards. With the sale of U.S. oil and gas
properties during the quarter ended June 30, 2000, the Company recorded a gain
of $4,093,000 and realized a tax benefit from the utilization of net operating
loss carryforwards. Realization of the deferred tax asset resulted in deferred
income tax expense of $1,573,000. The current income tax expense is the
Company's estimate of the alternative minimum tax and other state taxes that
will be payable on the current period taxable income. With the sale of a
majority of the Company's producing properties and its history of losses,
management believes that sufficient uncertainty exists regarding the
realizability of the deferred tax benefits associated with remaining carryovers
that it recorded a valuation allowance to offset the entire deferred tax asset
as of June 30, 2000. Management will continue to evaluate its gross deferred tax
asset and to the extent management may determine that it was more likely than
not that the asset would be realized, the valuation allowance would be reduced
accordingly.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Information in this report contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 that are based
on management's beliefs, assumptions, current expectations, estimates and
projections about the oil and gas industry, the economy and about the Company
itself. Words such as "may," "will," "expect," "anticipate," "estimate" or
"continue," or comparable words are intended to identify such statements. In
addition, all statements other than statements of historical facts that address
activities that the Company expects or anticipates will or may occur in the
future are forward-looking statements. Readers are encouraged to read the SEC
reports of the Company, particularly its Form 10-K for the fiscal year ended
September 30, 1999, for meaningful cautionary language disclosing why actual
results may vary materially from those anticipated by management.
OVERVIEW
During the current fiscal year ending September 30, 2000, the Company has been
selling its conventional oil and gas producing properties in connection with a
redirection of focus toward the exploration for and development and production
of natural gas from coalbed methane properties.
The Company's major area of coalbed methane production and development is in the
Bowen Basin of Queensland, Australia, where the Company's 90%-owned subsidiary,
Tipperary Oil & Gas (Australia) Pty Ltd, owns a 62.25% non-operating interest in
the Comet Ridge project on Authority to Prospect ("ATP" 526). The Company also
has been granted by the Queensland government exploration permits covering
approximately 370,000 acres (ATP 655) and 850,000 acres (ATP 675) near ATP 526
and expects to begin exploratory drilling operations in the near term. In the
United States, the Company has a 49% non-operating working interest in a coalbed
methane exploration prospect covering approximately 38,000 acres in the Hanna
Basin of Wyoming and has recently begun evaluating several locations on the
acreage.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company had cash and temporary investments of $9,044,000 as of June 30,
2000, compared to $430,000 as of September 30, 1999. At June 30, 2000, the
Company had working capital of $13,974,000 compared to working capital of
$270,000 as of September 30, 1999. Working capital as of June 30, 2000,
included $4,077,000 of assets held for sale. During the nine months ended June
30, 2000, cash flows were provided by sales of oil and gas assets and by debt
and equity financing. A portion of the sales proceeds were used to pay off bank
debt and fund capital expenditures and operating activities.
Net cash used by operating activities was $1,650,000 during the first nine
months of fiscal 2000 compared to $408,000 during the corresponding prior year
period. The increase in net cash used by operations was attributable primarily
to lower production volumes resulting from domestic asset sales in the nine
months ended June 30, 2000, as compared to the prior fiscal year period as well
as increased cash outlays to fund ongoing litigation with the operator of the
Comet Ridge project.
During the nine months ended June 30, 2000, net cash provided by investing
activities was $8,683,000. Net proceeds from sales of domestic assets totaled
$15,950,000 net of sales costs. Capital expenditures were $9,128,000. Domestic
expenditures of $1,333,000 included approximately $847,000 for the purchase of a
non-operating interest in the Hanna Draw prospect discussed above. The remaining
$486,000 of expenditures related to assets held for sale, exploration activities
and other corporate assets. Capital expenditures of $7,795,000, related to the
Company's Australia operations included the acquisition of additional interests
in the Comet Ridge project for approximately $3,300,000 in cash and 1,163,328
shares of the Company's common stock valued at $1,861,000. See Note 6 to the
Consolidated Financial Statements. Other costs for the Comet Ridge project
included approximately $1,392,000 expended for the drilling of the Fairview 21
through 28 wells. Remaining costs of $1,242,000 related to ongoing capital
expenditures in Australia and included disputed billings of approximately
$241,000 paid to the Court in the litigation with the operator of the property.
See Note 5 to the Consolidated Financial Statements.
During the nine months ended June 30, 1999, net cash expended for investing
activities totaled $2,757,000. Capital expenditures related to domestic
operations totaled $353,000. Additional interests in two of the Company's
operated wells were purchased for $79,000 and $54,000 was expended for
non-producing leasehold costs. Other domestic capital expenditures totaled
$220,000. The Company received $705,000 from Slough for the contractual payment
right to revenue from the Comet
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Ridge project. Capital expenditures of $3,462,000 were incurred during the
nine-month period, of which $3,109,000 was attributable to the Comet Ridge
project. Costs expended to begin an eight-well drilling program in the Comet
Ridge area totaled $836,000. Of the remaining expenditures in the Comet Ridge
area, $512,00 was invested in inventory and gas gathering facilities. Two
additional wells were drilled at a cost of $372,000 net to the Company. Other
capital expenditures totaling $1,389,000 included costs associated with seismic
data gathering and other capital expenditures.
During the nine months ended June 30, 2000, net cash provided by financing
activities was $1,581,000. Total borrowings of $1,585,000 were received from
Slough in connection with the December 1998 Comet Ridge financing arrangement.
The Company also made principal payments of $150,000 to Slough on this facility.
Proceeds from equity financing of $10,000,000 were provided by Slough in
connection with the transaction that closed on December 23, 1999, and included
$1,776,000 of value assigned to warrants Slough received to acquire 1,200,000
shares of common stock at $2.00 per share. Dividends of $79,000 were paid on the
preferred stock that was outstanding between December 23, 1999, and February 29,
2000. See Note 2 to the Consolidated Financial Statements. The Company incurred
financing costs of $111,000 related to this equity financing transaction and
used $4,000,000 of the proceeds to reduce bank debt. The remaining principal
balance of $7,800,000 owed to the bank was paid in full in May 2000 with
proceeds generated by the sales of domestic assets. Additional funds of
$2,400,000 were received from the sale of stock and issuance of warrants in
connection with financing arrangements with two individual investors. These
proceeds were used to partially fund the acquisition of additional interests in
the Comet Ridge project. See Note 6 to the Consolidated Financial Statements.
Financing cash flows also include $264,000 of payments related to obtaining debt
financing. See Note 7 to the Consolidated Financial Statements.
In the prior corresponding fiscal year's period, proceeds of $8,994,000
received from Slough included loans totaling $4,994,000 and $4,000,000 from the
sale of 2,000,000 shares of the Company's common stock. Of the $4,000,000 in
proceeds, $2,375,000 was for the issuance of common stock and the premium paid
of $1,625,000 was recorded as follows: $705,000 for the contractual payment
right to revenue from Comet Ridge production, $610,000 for a minority interest
in the Australian subsidiary, and $310,000 for warrants received by Slough to
acquire restricted shares of the Company's common stock. The Company used
$4,700,000 of the total proceeds to reduce bank debt and $1,194,000 to fund a
drilling program in the Comet Ridge area. The remainder was used for working
capital and capital expenditures.
The Company has used derivatives to hedge risks associated with the volatility
of oil and gas prices. During the first half of fiscal 2000, the Company hedged
45,000 barrels (approximately 29%) of its crude oil production through swap
agreements with which the Company received a floor but retained 50% of price
increases above the floor. Net (payments) receipts pursuant to the Company's
hedging activity for the nine months ended June 30, 2000, and June 30, 1999,
were ($285,000) and ($109,000), respectively. Of the total payments made in
fiscal 2000, $93,000 was paid during the first quarter and $192,000 during the
second quarter. None of the Company's production was hedged subsequent to March
31, 2000, and the Company does not intend to enter into any further hedges of
oil or gas production in fiscal 2000 due to the ongoing sales of the Company's
domestic oil and gas properties.
The Company had no outstanding bank debt at June 30, 2000. As of September 30,
1999, bank debt totaled $11,800,000. In December 1999, $4,000,000 of proceeds
from the Slough financing was used to reduce bank debt to $7,800,000. In the
second quarter of fiscal 2000, the Company made principal payments of $835,000,
bringing the loan balance to $6,965,000. As disclosed in Note 3 to the
Consolidated Financial Statements, the Company used property sales proceeds to
pay off the entire remaining balance of bank debt in May, 2000.
Outstanding loans due Slough at June 30, 2000, include a corporate loan in the
amount of $6,500,000 and a loan for $4,575,000 for the development of the
Company's Comet Ridge project. Interest is due quarterly on the $6.5 million
note at the 90-day London Interbank Offered Rate plus 3.5%. The
weighted-average interest rate was 10.27% at June 30, 2000. The unpaid
principal balance of this note is due and payable March 11, 2002. The Company
may pay part or all of the $6.5 million corporate note balance with proceeds
from domestic asset sales. The unpaid principal balance of the Comet Ridge
project financing bears interest at a rate of 10% per annum. Principal and
interest payments are due quarterly and must equal 75% of the cash flow, as
defined in the note, from the Comet Ridge properties. The Company also agreed
to pay a finance charge of 7% of gross proceeds received from sales from the
Fairview #1 through #20 wells until the loan is repaid in full and 7% of gross
proceeds received from sales from the eight new wells (Fairview #21 through
#28) for the life of those wells. The unpaid principal balance on the
9
12
loan, together with accrued and unpaid interest and finance charges, is due and
payable five years from the date all proceeds are received. As disclosed in Note
7 to the Consolidated Financial Statements, the Company intends to use funds
expected to be obtained from a recently acquired credit facility to repay this
loan.
With the sales of the Company's domestic producing properties, operating cash
flow will continue to decrease and cash on hand and proceeds from additional
property sales will provide cash for debt reduction and capital expenditures,
and will be used to fund general and administrative expenses. It is uncertain
whether the Company will be able to replace the cash flow from the domestic
properties with new coalbed methane properties in the United States in the near
term, but the Company believes it can increase cash flow from the Comet Ridge
project substantially over the next several years through additional drilling.
In addition, the Company believes that the operating expenses, capital
expenditures and other costs charged by the operator of the project should be
reduced and is involved in litigation with the operator concerning this and
other matters. See Note 5 to the Consolidated Financial Statements. In addition
to further drilling programs on the Comet Ridge project, the Company plans to
initiate exploratory drilling on its recently acquired acreage near the Comet
Ridge project, which, if successful, could also increase operating cash flow
from Australia. Should cash flows not increase sufficiently to cover general and
administrative expenses, cash on hand may be utilized and/or general and
administrative costs may be reduced.
RESULTS OF OPERATIONS - COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2000, AND
1999
The Company reported net income of $1,399,000 for the three months ended June
30, 2000, compared to a net loss of $578,000 for the three months ended June 30,
1999. The net income in fiscal 2000 includes a gain from asset sales of
$4,093,000. See Note 3 to the Consolidated Financial Statements. Operating
losses increased $281,000 to $514,000 in the fiscal 2000 quarter from an
operating loss of $233,000 in the corresponding quarter of fiscal 1999. The
increase in operating loss was primarily due to reduced oil and gas revenues
resulting from property dispositions and significantly higher general and
administrative expenses, resulting from litigation with the operator of the
Comet Ridge project. See Note 5 to the Consolidated Financial Statements.
Detailed comparisons of the components of the respective periods follow.
Operating revenues for the three months ended June 30, 2000, decreased $252,000,
or 12%, to $1,811,000 from $2,063,000 in the corresponding fiscal 1999 quarter.
Oil volumes produced during the third fiscal 2000 quarter decreased 58,000
barrels, or 67%, to 29,000 barrels versus 87,000 barrels in the prior year
quarter, decreasing revenue by $817,000. Gas volumes sold from the Company's
U.S. properties decreased 118,000 Mcf, or 46%, to 138,000 Mcf in the current
quarter compared to 256,000 Mcf in the three months ended June 30, 1999,
resulting in a $215,000 decrease in revenue. The oil and gas volume decreases
resulted primarily from producing property sales. Average oil prices increased
85% to $26.00 per barrel for the three months ended June 30, 2000, from $14.08
per barrel for the corresponding prior year quarter, resulting in a $346,000
increase in revenue. Domestic gas prices increased 86% to $3.39 per Mcf in the
current year quarter versus $1.82 in the prior year quarter, resulting in a
$217,000 revenue increase. Sales revenues from the Company's Comet Ridge coalbed
methane project in Queensland, Australia for the quarter ended June 30, 2000,
were $561,000 as compared to $347,000 in the same quarter of fiscal 1999. Sales
volumes in Australia increased 200,000 Mcf, or 78%, to 455,000 Mcf from 255,000
Mcf in the corresponding prior year's quarter, contributing $272,000 to
increases in revenue. The U.S. dollar equivalent of gas prices received
decreased 10% to $1.23 per Mcf in the quarter ended June 30, 2000, from $1.36
per Mcf in the quarter ended June 30, 1999, resulting in an decrease of $59,000
in revenues.
Operating expenses decreased $133,000, or 11%, to $1,034,000 from $1,167,000
reported in the corresponding quarter in fiscal 1999. The Company's average
domestic lifting cost per BOE increased 96% to $13.66 in the three months ended
June 30, 2000, from $6.96 in the prior year's three month period. The increase
was primarily attributable to production tax increases resulting from higher
oil and gas prices and to volume decreases from natural production declines.
Comet Ridge operating expenses increased $52,000 to $295,000 in the current
fiscal quarter as compared to $243,000 in the three months ended June 30, 1999.
The Company's average lifting cost for the Comet Ridge project was $0.65 per
Mcf in the current fiscal quarter as compared to $0.95 per Mcf in the prior
year quarter largely due to increased sales volumes. Monthly operating and
capital expenditures billed for the Comet Ridge project have generally exceeded
revenues from the project. The Company has disputed certain charges, as
discussed above, and believes that operating expenses on a per-well basis can
be reduced and is involved in litigation with the operator concerning this and
other matters. See Note 5 to the Consolidated Financial Statements herein.
10
13
General and administrative expenses increased by $642,000, or 141%, to
$1,096,000 during the three months ended June 30, 2000, compared to $454,000 for
the prior year period. The increase was due to increased litigation costs
associated with the Comet Ridge project.
Depreciation, depletion and amortization ("DD&A") expense for the three months
ended June 30, 2000, decreased $480,000, or 71%, to $195,000 from $675,000
reported for the comparable fiscal 1999 period. The decrease is attributable to
the pending sale of domestic assets for which no DD&A has been recorded from
the time the decision was made to divest the assets.
Interest expense for the three months ended June 30, 2000, decreased $45,000,
or 11%, to $348,000 from $393,000 for the three months ended June 30, 1999. The
decrease was due to the reduction and elimination of bank debt.
Current income tax expense of $340,000 includes alternative minimum tax and
state income taxes estimated to be payable on current taxable income. Deferred
income tax expense of $1,573,000 results from the realization of the net
deferred tax asset. See Note 9 to the Consolidated Financial Statements herein.
RESULTS OF OPERATIONS - COMPARISON OF THE NINE MONTHS ENDED JUNE 30, 2000, AND
1999
The Company reported net income of $1,538,000 for the nine months ended June 30,
2000, compared to a net loss of $9,022,000 for the nine months ended June 30,
1999. The net income in fiscal 2000 included a gain of $4,093,000 on sales of
U.S. oil and properties. The loss for the first nine months of fiscal 1999
included a non-cash write-down of properties totaling $5,727,000 due to low oil
and gas prices. Operating income increased to $512,000 in the first nine months
of fiscal 2000 from a loss of $7,981,000 in the prior year period. This
improvement was attributable primarily to the aforementioned 1999 write-down of
domestic oil and gas assets as well as to higher oil and gas prices during the
first nine months of fiscal 2000 as compared to the prior year period. Detailed
comparisons of the components of the respective periods follow.
Operating revenues for the nine months ended June 30, 2000, increased
$2,326,000, or 43%, to $7,746,000 from $5,420,000 in the corresponding fiscal
1999 period. Oil volumes sold decreased 85,000 barrels, or 32%, to 184,000
barrels versus 269,000 barrels in the prior year period, decreasing revenue by
$979,000. Domestic gas volumes sold decreased 241,000 Mcf, or 26%, to 677,000
Mcf in the current year period compared to 918,000 Mcf in the nine months ended
June 30, 1999, resulting in a $373,000 decrease in revenues. Oil and gas volume
decreases resulted primarily from sales of producing properties during the
third quarter as well as to natural production declines. Average oil prices
increased 104% to $23.44 per barrel for the nine months ended June 30, 2000,
from $11.50 per barrel for the corresponding prior year period, resulting in a
$2,199,000 increase in revenue. Prices received by the Company for domestic gas
sales increased 74% to $2.72 per Mcf in the current year period versus $1.56 in
the prior year period, resulting in a $788,000 revenue increase. A 541,000 Mcf,
or 87%, increase in gas volumes sold in the current fiscal period from the
Comet Ridge project, from 621,000 Mcf to 1,162,000 Mcf, accounted for a
$707,000 revenue increase. The average U.S. dollar equivalent gas price
received from those sales decreased slightly to $1.29 per Mcf from $1.30 per
Mcf.
Operating expenses during the nine month period ended June 30, 2000, increased
$350,000, or 10%, to $3,777,000 from $3,427,000 in the prior year period.
Operating expenses related to the Company's domestic properties decreased
$47,000, or 2%, to $2,763,000 from $2,810,000 reported in the fiscal 1999
period. The Company's average lifting cost per equivalent barrel of domestic
production increased 39%, however, to $9.28 in the first nine months of fiscal
2000 from $6.70 in the prior year period. The increase per equivalent barrel was
attributable to increased production taxes resulting from higher oil and gas
prices in the current fiscal period and to volume decreases from natural
production declines and property sales. The nine months ended June 30, 2000,
included $1,014,000 of operating expenses attributable to the Comet Ridge
project in Australia, an increase of $397,000, or 64%, from $617,000 in the
prior year period. The increase is attributable primarily to additional expenses
associated with new producing wells, and to expense increases attributable to
interests acquired by the Company in the Comet Ridge project. As discussed
above, the Company is seeking to reduce operating and capital expenditures
billed by the operator. Due to the increase in sales volumes, the Company's
average lifting cost for the Comet Ridge project decreased 12% from $0.99 per
Mcf in the prior year period to $0.87 per Mcf during the nine months ended June
30, 2000.
11
14
General and administrative expenses increased $940,000, or 56%, to $2,632,000
during the nine months ended June 30, 2000, compared to $1,692,000 for the prior
year period due primarily to an increase in legal fees attributable to the Comet
Ridge litigation. See Note 5 to the Consolidated Financial Statements.
DD&A expense for the nine months ended June 30, 2000, decreased $1,730,000, or
68%, to $825,000 from $2,555,000 reported for the comparable fiscal 1999
period. The decrease is attributable to the decision to sell domestic assets
discussed above.
Interest expense for the nine months ended June 30, 2000, increased $193,000,
or 17%, to $1,350,000 from $1,157,000 for the nine months ended June 30, 1999.
The increase is attributable to higher interest rates.
Current income tax expense of $340,000 includes alternative minimum tax and
state income taxes estimated to be payable on current taxable income. Deferred
income tax expense of $1,573,000 results from the realization of the net
deferred tax asset. See Note 9 to the Consolidated Financial Statements.
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15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See Note 5 to the Consolidated Financial Statements under Part I - Item 1.
Item 2. Changes in Securities and Use of Proceeds
In February 2000, the Company issued a total of 2,682,316 shares of common
stock to five individuals in connection with the acquisition of additional
interests in the Comet Ridge coalbed methane project in Queensland,
Australia. An additional acquisition of a 1% interest in July 2000 was
purchased with the issuance of 300,000 shares to another individual
investor. The offer and sale of the shares were not registered under the
Securities Act of 1933 (the "Securities Act"), but rather were made
privately by the Company pursuant to the exemption from registration
provided by Section 4(2) of the Securities Act.
The total purchase price of the additional interests acquired totaled
approximately $6,211,000 and included cash of $3,300,000 and stock valued at
$2,911,000. The cash portion of the combined purchase price was paid using
cash on hand of $900,000 and $2,400,000 of proceeds from the sale of
1,518,988 shares of common stock at $1.58 per share to two individual
investors. The remaining purchase price of approximately $2,911,000 was paid
to the sellers with the issuance of 1,163,328 shares of the Company's common
stock at $1.60 per share in February 2000 and 300,000 shares at $3.50 per
share in July 2000.
The purchasers of the common stock had full information concerning the
business and affairs of the Company and acquired the shares for investment
purposes. The certificates representing the securities issued bear a
restrictive legend and stop transfer instructions have been entered
prohibiting transfer of the securities except in compliance with applicable
securities laws.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
During June 2000, the Company recorded proceeds of $4.4 million from the
sale of conventional oil and gas properties in connection with a redirection
of focus toward increasing reserves from coalbed methane properties. The
properties sold consisted of various interests in producing oil and natural
gas mineral leaseholds and equipment located in the Permian Basin of New
Mexico and one well in Texas. The oil and gas reserves sold comprise
approximately one third of the Company's total domestic proved reserve
volumes as of its fiscal year ended September 30, 1999.
On June 30, the Company sold its Permian Basin assets to an unaffiliated
third party for $4 million and on June 14, the Texas well sold at auction
for $400,000. Both sales were arms-length and involved either a negotiated
bid or auction process. There were no material relationships between any
person purchasing any of the properties and the Company or any of its
affiliates, any director or officer of the Company, or any associate of any
such director or officer.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Filed in Part I
11. Computation of per share earnings, filed
herewith as Note 4 to the Consolidated
Financial Statements.
27. Financial Data Schedule.
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16
Filed in Part II
3.11 Articles of Amendment of the Articles of
Incorporation of Tipperary Corporation
adopted January 25, 2000, filed as Exhibit
3.11 to Form 10-Q for the quarterly period
ended December 31, 1999 and incorporated
herein by reference.
3.12 Statement of Resolution Establishing a
Series of Shares dated December 23, 1999,
filed as Exhibit 3.12 to Form 10-Q for the
quarterly period ended December 31, 1999
and incorporated herein by reference.
4.66 Credit Agreement among Tipperary
Corporation as Borrower, Tipperary Oil &
Gas (Australia) Pty Ltd (ACN 077536871) as
Guarantor, Tipperary Oil & Gas Corporation,
Lenders party thereto and TCW Asset
Management Company in the capacities
described therein dated as of April 28,
2000, filed herewith.
10.60 Warrant to Purchase the Registrant's common
stock dated December 23, 1999, issued to
Slough Estates USA Inc., filed as Exhibit
10.60 to Form 10-Q for the quarterly period
ended December 31, 1999 and incorporated
herein by reference.
10.61 Registration Rights Agreement between
Tipperary Corporation and Slough Estates
USA Inc., dated December 23, 1999, filed as
Exhibit 10.61 to Form 10-Q for the
quarterly period ended December 31, 1999
and incorporated herein by reference.
10.62 Purchase and Sale Agreement dated January
14, 2000, between Ray W. Williams as Seller
and Tipperary Corporation as Buyer, filed
as Exhibit 10.62 to Form 10-Q for the
quarterly period ended March 31, 2000 and
incorporated herein by reference.
10.63 Purchase and Sale Agreement dated January
14, 2000, between William I. Isaac as
Seller and Tipperary Corporation as Buyer,
filed as Exhibit 10.63 to Form 10-Q for the
quarterly period ended March 31, 2000 and
incorporated herein by reference.
10.64 Purchase and Sale Agreement dated February
11, 2000, between William D. Kennedy as
Seller and Tipperary Corporation as Buyer,
filed as Exhibit 10.64 to Form 10-Q for the
quarterly period ended March 31, 2000 and
incorporated herein by reference.
10.65 Registration Rights Agreement between
Tipperary Corporation and Ray W. Williams,
dated February 10, 2000, filed as Exhibit
10.65 to Form 10-Q for the quarterly period
ended March 31, 2000 and incorporated
herein by reference.
10.66 Registration Rights Agreement between
Tipperary Corporation and William I. Isaac,
dated February 10, 2000, filed as Exhibit
10.66 to Form 10-Q for the quarterly period
ended March 31, 2000 and incorporated
herein by reference.
10.67 Registration Rights Agreement between
Tipperary Corporation and William D.
Kennedy, dated February 11, 2000, filed as
Exhibit 10.67 to Form 10-Q for the
quarterly period ended March 31, 2000 and
incorporated herein by reference.
10.68 Registration Rights Agreement between
Tipperary Corporation and James H.
Marshall, dated February 9, 2000, filed as
Exhibit 10.68 to Form 10-Q for the
quarterly period ended March 31, 2000 and
incorporated herein by reference.
10.69 Registration Rights Agreement between
Tipperary Corporation and James F. Knott,
dated February 9, 2000, filed as Exhibit
10.69 to Form 10-Q for the quarterly period
ended March 31, 2000 and incorporated
herein by reference.
10.70 Warrant to Purchase the Registrant's common
stock dated February 9, 2000, issued to
James H. Marshall, filed as Exhibit 10.70
to Form 10-Q for the quarterly period ended
March 31, 2000 and incorporated herein by
reference.
14
17
10.71 Warrant to Purchase the Registrant's common
stock dated February 9, 2000, issued to
James F. Knott, filed as Exhibit 10.71 to
Form 10-Q for the quarterly period ended
March 31, 2000 and incorporated herein by
reference.
10.72 Purchase and Sale Agreement dated April 12,
2000, between Tipperary Oil & Gas
Corporation as Seller and Nance Petroleum
Corporation as Buyer, filed as Exhibit 10.72
to Form 8-K dated May 18, 2000 and
incorporated herein by reference.
10.73 Purchase and Sale Agreement dated July 21,
2000, between Elisa A. Stoner as Seller and
Tipperary Corporation as Buyer, filed
herewith.
10.74 Registration Statement Agreement between
Tipperary Corporation and Elisa A. Stoner
dated July 21, 2000, filed herewith.
10.75 Purchase and Sale Agreement dated June 14,
2000, between Tipperary Oil & Gas
Corporation as Seller, and Transrepublic
Resources as Buyer, filed herewith.
10.76 Gas Supply Agreement between Tipperary Oil
& Gas (Australia) Pty Ltd (ACN 077 536 871)
and ENERGEX Retail Pty Ltd (ACN 078 849
055) dated June 23, 2000. A portion of the
exhibit has been omitted pursuant to a
request for confidential treatment filed
with the Securities and Exchange Commission.
(b) Reports on Form 8-K:
On May 18, 2000, the Company filed a Current Report on Form
8-K disclosing the receipt of net proceeds of approximately
$12 million from domestic asset sales in connection with its
plan to divest its U.S. conventional oil and gas properties
and redirect its focus toward increasing reserves and
production from coalbed methane properties.
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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 thereunto duly authorized.
Tipperary Corporation
Registrant
Date: August 14, 2000 By: /s/ David L. Bradshaw
----------------------------------
David L. Bradshaw, President,
Chief Executive Officer and
Chairman of the Board of Directors
Date: August 14, 2000 By: /s/ Lisa S. Wilson
----------------------------------
Lisa S. Wilson, Chief Financial
Officer and Principal Accounting
Officer
16
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- - ------- -----------
3.11 Articles of Amendment of the Articles of Incorporation of
Tipperary Corporation adopted January 25, 2000, filed as Exhibit
3.11 to Form 10-Q for the quarterly period ended December 31,
1999 and incorporated herein by reference.
3.12 Statement of Resolution Establishing a Series of Shares dated
December 23, 1999, filed as Exhibit 3.12 to Form 10-Q for the
quarterly period ended December 31, 1999 and incorporated herein
by reference.
4.66 Credit Agreement among Tipperary Corporation as Borrower,
Tipperary Oil & Gas (Australia) Pty Ltd (ACN 077536871) as
Guarantor, Tipperary Oil & Gas Corporation, Lenders party thereto
and TCW Asset Management Company in the capacities described
therein dated as of April 28, 2000, filed herewith.
10.60 Warrant to Purchase the Registrant's common stock dated December
23, 1999, issued to Slough Estates USA Inc., filed as Exhibit
10.60 to Form 10-Q for the quarterly period ended December 31,
1999 and incorporated herein by reference.
10.61 Registration Rights Agreement between Tipperary Corporation and
Slough Estates USA Inc., dated December 23, 1999, filed as
Exhibit 10.61 to Form 10-Q for the quarterly period ended
December 31, 1999 and incorporated herein by reference.
10.62 Purchase and Sale Agreement dated January 14, 2000, between Ray
W. Williams as Seller and Tipperary Corporation as Buyer, filed
as Exhibit 10.62 to Form 10-Q for the quarterly period ended
March 31, 2000 and incorporated herein by reference.
10.63 Purchase and Sale Agreement dated January 14, 2000, between
William I. Isaac as Seller and Tipperary Corporation as Buyer,
filed as Exhibit 10.63 to Form 10-Q for the quarterly period
ended March 31, 2000 and incorporated herein by reference.
10.64 Purchase and Sale Agreement dated February 11, 2000, between
William D. Kennedy as Seller and Tipperary Corporation as Buyer,
filed as Exhibit 10.64 to Form 10-Q for the quarterly period
ended March 31, 2000 and incorporated herein by reference.
10.65 Registration Rights Agreement between Tipperary Corporation and
Ray W. Williams, dated February 10, 2000, filed as Exhibit 10.65
to Form 10-Q for the quarterly period ended March 31, 2000 and
incorporated herein by reference.
10.66 Registration Rights Agreement between Tipperary Corporation and
William I. Isaac, dated February 10, 2000, filed as Exhibit 10.66
to Form 10-Q for the quarterly period ended March 31, 2000 and
incorporated herein by reference.
10.67 Registration Rights Agreement between Tipperary Corporation and
William D. Kennedy, dated February 11, 2000, filed as Exhibit
10.67 to Form 10-Q for the quarterly period ended March 31, 2000
and incorporated herein by reference.
10.68 Registration Rights Agreement between Tipperary Corporation and
James H. Marshall, dated February 9, 2000, filed as Exhibit 10.68
to Form 10-Q for the quarterly period ended March 31, 2000 and
incorporated herein by reference.
10.69 Registration Rights Agreement between Tipperary Corporation and
James F. Knott, dated February 9, 2000, filed as Exhibit 10.69 to
Form 10-Q for the quarterly period ended March 31, 2000 and
incorporated herein by reference.
10.70 Warrant to Purchase the Registrant's common stock dated February
9, 2000, issued to James H. Marshall, filed as Exhibit 10.70 to
Form 10-Q for the quarterly period ended March 31, 2000 and
incorporated herein by reference.
10.71 Warrant to Purchase the Registrant's common stock dated February
9, 2000, issued to James F. Knott, filed as Exhibit 10.71 to Form
10-Q for the quarterly period ended March 31, 2000 and
incorporated herein by reference.
10.72 Purchase and Sale Agreement dated April 12, 2000, between
Tipperary Oil & Gas Corporation as Seller and Nance Petroleum
Corporation as Buyer, filed as Exhibit 10.72 to Form 8-K dated
May 18, 2000 and incorporated herein by reference.
10.73 Purchase and Sale Agreement dated July 21, 2000, between Elisa A.
Stoner as Seller and Tipperary Corporation as Buyer, filed
herewith.
10.74 Registration Statement Agreement between Tipperary Corporation
and Elisa A. Stoner dated July 21, 2000, filed herewith.
10.75 Purchase and Sale Agreement dated June 14, 2000, between
Tipperary Oil & Gas Corporation as Seller, and Transrepublic
Resources as Buyer, filed herewith.
10.76 Gas Supply Agreement between Tipperary Oil & Gas (Australia) Pty
Ltd (ACN 077 536 871) and ENERGEX Retail Pty Ltd (ACN 078 849
055) dated June 23, 2000. A portion of the exhibit has been
omitted pursuant to a request for confidential treatment filed
with the Securities and Exchange Commission.
11. Computation of per share earnings, filed herewith as Note 4 to
the Consolidated Financial Statements.
27. Financial Data Schedule.