SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 4, 2001
CHAPARRAL RESOURCES, INC.
-------------------------
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-7261 84-0630863
-------- ------ ----------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
16945 Northchase, Suite 1620 77060
Houston, Texas (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (281) 877-7100
Item 5. Other Events.
The following press release was issued by the Company on June 4, 2001, a
copy of which is included as Exhibit 99.1 and incorporated herein by this
reference:
CHAPARRAL RESOURCES, INC. ANNOUNCES ADDITIONAL BRIDGE FINANCING AND
PROPOSAL TO RESTRUCTURE LOAN AGREEMENT WITH SHELL CAPITAL
Houston, Texas, June 4, 2001 -- Chaparral Resources, Inc. (NASDAQ: CHAR)
announced today an amendment to its existing $24.0 million credit facility
that provides for a short-term uncommitted bridge loan from Shell Capital
Inc. ("Shell Capital") in an aggregate principal amount of up to an
additional $8.0 million (the "Bridge Loan"). Chaparral has borrowed
approximately $3.0 million under the Bridge Loan to fund its working
capital requirements. To induce Shell Capital to enter into the Bridge
Loan, Chaparral issued preferred shares of stock in its subsidiary, Central
Asian Petroleum (Guernsey) Limited ("CAP(G)") to Shell Capital. In addition
to other rights and remedies of Shell Capital under the Bridge Loan, if
Chaparral fails to repay or refinance the then outstanding balance of the
Bridge Loan on or before September 30, 2001, the preferred shares in CAP(G)
will convert and entitle Shell Capital to 40% of the distributable profits
of CAP(G). Upon repayment of the Bridge Loan, the preferred shares will be
cancelled.
To facilitate refinancing on or before September 30, 2001, Chaparral
obtained a non-binding indicative proposal from Shell Capital to
restructure all of its indebtedness with Shell Capital. Under the proposal,
the restructured debt would bear interest at LIBOR plus between 12.75% and
17.75%, and a Shell Capital affiliate's existing warrant to acquire
approximately 12.5% of the outstanding common stock of Chaparral, or
1,785,455 shares, would be exchanged for a series of preferred shares in
CAP(G) that would entitle Shell Capital or its affiliate to between 5% and
15% of a net profits interest in the cash flows of CAP(G). The proposal
also includes a number of other terms and conditions, including the
revision or elimination of the requirement to reach project completion on
or before September 30, 2001. The indicative proposal from Shell Capital,
however, is non-binding. No assurances can be provided that Chaparral will
be able to successfully restructure its indebtedness on or before September
30, 2001. If Chaparral is able to restructure its indebtedness with Shell
Capital, there is no assurance the terms and conditions of such refinancing
would be favorable to Chaparral.
John G. McMillian, Co-Chairman of the Company, said, "The Bridge Loan is a
positive step forward. We will work in good faith to restructure our
indebtedness with Shell Capital and feel very fortunate to have them as a
part of this project."
Chaparral Resources, Inc. is an international oil and gas exploration and
production company. Chaparral participates in the development of the
Karakuduk Field through Closed Type JSC Karakudkmunay ("KKM") of which
Chaparral is the operator. Chaparral owns a 50% beneficial ownership
interest in KKM through CAP(G) with the other 50% ownership interest being
held by Kazakh companies, including KazakhOil, the government-owned oil
company.
Information Regarding Forward-Looking Statements: Except for historical
information contained herein, the statements in this Press Release are
forward-looking statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and
uncertainties which may cause the Chaparral's actual results in future
periods to differ materially from forecasted results. These risks and
uncertainties include, among other things, the ability of Chaparral to
secure financing, volatility of oil prices, product demand, market
competition, risks inherent in Chaparral's international operations,
imprecision of reserve estimates and Chaparral's ability to replace and
expand oil and gas reserves. These and other risks are described in the
Chaparral's Annual Report on Form 10-K and other filings with the
Securities and Exchange Commission.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Number Exhibit
------ -------
99.1 Press Release, dated June 4, 2001, of Chaparral Resources, Inc.
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.
CHAPARRAL RESOURCES, INC.
Date: June 6, 2001 By: /s/ Michael B. Young
----------------------------------
Michael B. Young
Treasurer and Controller