UNITED STATES
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) September 26, 2007
SOUTH TEXAS OIL COMPANY
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(Exact name of Registrant as specified in charter)
Nevada 0-50732 74-2949620
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification)
769 Highway 95N, Bastrop, TX 78602
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(Address of principal executive offices) (Zip Code)
(512)772-2474 (Telephone) (512)263-5046 (Fax)
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(Issuer's telephone number)
2802 Flintrock Trace, Suite 252, Austin, TX 78738
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(Former address if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ] Written communication pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 40.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4 (c))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 Entry into a Material Definitive Agreement.
A. On January 31, 2007, South Texas Oil Company received a 3 year, $15 million
revolving credit facility. On September 25, 2007, South Texas Oil Company
increased the credit facility from $15 million to $30 million.
The credit facility of prime plus 4% will be used for acquisitions, additional
well workovers and expanded drilling programs.
The original terms of the credit facility were unchanged with the addition the
exception of the following terms added to the first Amendment.
South Texas Oil Company and/or its subsidiaries will execute and deliver to
Lender those certain Conveyances of Overriding Royalty Interests, each in a
form acceptable to Lender, whereby South Texas shall, and/or shall cause the
applicable Subsidiaries to, grant perpetual overriding royalty interests in its
and the subsidiaries' current and future interests in the hydrocarbon
production of all of their leases in the Giddings and Bastrop properties (the
"Override Properties") as follows:
* Overriding royalty interests of Lender in the Override Properties equal
to 4% until the Override Properties produce 1,000 bbls per day net to the
subject working interests for 90 consecutive days;
* Thereafter, overriding royalty interests of Lender in the Override
Properties equal to 3% until the Override Properties produce 2,000 bbls per day
net to the subject working interests for 90 consecutive days; and
* Thereafter, overriding royalty interests of Lender in the Override
Properties equal to 2%.
Notwithstanding the foregoing, at any time after Borrower repays in full all of
the outstanding Notes (as defined in the Security Agreement) and the Loan
Agreement has been terminated, such overriding royalty interests of Lender in
the Override Properties shall be 2%.
B. On September 25, 2007, South Texas Oil Company, through a subsidiary STO
Properties, LLC, purchased all rights, titles and interests (of whatever kind
or character, whether legal or equitable, and whether vested or contingent) of
Diversity Petroleum, LLP (including interests in oil, gas and/or mineral leases
covering such lands and wells, overriding royalties, production payments and
net profits interests in such lands, such leases and wells, and fee mineral
interests, fee royalty interests and other interests in such oil, gas and other
minerals)for an amount of $10 million by paying $7.5 million in cash, issuing a
promissory note for $1.5 million and issuing restricted shares valued at $1
million.
SECTION 8 - OTHER EVENTS
ITEM 8.01 Other Events.
On September 26, 2007, South Texas Oil Company issued a news release announcing
that South Texas Oil Company had received an increase of $15 million to the
company's existing revolving line of credit. A copy of which is attached as
Exhibit 99.3 hereto and incorporated herein by this reference.
Additionally, in the September 26, 2007 news release, South Texas Oil Company
announced the company, through a subsidiary STO Properties, LLC, had purchased
all rights, titles and interests (of whatever kind or character, whether legal
or equitable, and whether vested or contingent) of Diversity Petroleum, LLP
(including interests in oil, gas and/or mineral leases covering such lands and
wells, overriding royalties, production payments and net profits interests in
such lands, such leases and wells, and fee mineral interests, fee royalty
interests and other interests in such oil, gas and other minerals)for an amount
of $10 million by paying $7.5 million in cash, issuing a promissory note for
$1.5 million and issuing restricted shares valued at $1 million.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01 Financial Statements and Exhibits.
(a) Financial Statements.
Not applicable.
(b) Pro Forma Financial Information.
If pro forma Information is required, as permitted by Item 9.01(b)(2) of Form
8-K, we will file the pro forma financial information required by Item
9.01(b)(1) of Form 8-K by amendment to this Current Report on Form 8-K on or
prior to 71 calendar days from the date we are required to report the
acquisition.
(c) Exhibits
Exhibit Number Description
99.1 First Amendment to Loan Agreement and Revolving Credit Note
99.2 Purchase and Sale Agreement
99.3 Press Release dated September 26, 2007
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: September 26, 2007
South Texas Oil Company
By: /s/ Murray N. Conradie
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Murray N. Conradie, Chief Executive Officer