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): November 29, 1995
Commission File Number: 0-7914
BASIC EARTH SCIENCE SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 84-0592823
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
633 Seventeenth St., Suite 1670
Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
(303) 294-9525
(Registrant telephone including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or such shorter period 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 practical date.
Common Stock: 16,580,487
<PAGE>
INFORMATION INCLUDED IN REPORT
Item 5. Other Events
Basic Earth Science Systems, Inc. (Basic) recently advised its bank that
as of October 31, 1995 it failed to satisfy the liquidity covenant in its
Loan Agreement. The Company has requested and received a waiver from its
Bank regarding said violation. The Company has drawn on its line of
credit, and expects to continue drawing on its line of credit, in order to
pay current liabilities in their normal course and attain a current ratio
acceptable to its bank.
Several events occurred to create a temporary increase in current
liabilities and adversely affect the Company's short term liquidity.
Specifically, the Company previously reported the successful recompletion
in September 1995 of the State #12-16, Richland County, Montana which cost
Basic approximately $85,000. Subsequently, Basic attempted an additional
recompletion in October 1995 in Sheridan County, Montana. This second
effort, which cost Basic approximately $80,000, was unsuccessful. During
this second recompletion effort, a water disposal (SWD) well, on an
unrelated property, developed a casing leak. This unanticipated event
necessitated immediate repairs which required Basic to shut down four
producing wells utilizing this SWD well for approximately thirty days.
While these repairs were successful, Basic spent approximately $85,000 in
the effort, of which approximately $50,000 was attributable to Basic's
interest. Furthermore, no revenues were received from the four shut-in
wells during this period.
Since October 1995, the Company has neither initiated further recompletion
work nor encountered any material, unanticipated repairs. As a result,
the Company anticipates that it will take until early in its fourth
quarter, ending March 31, 1996, to reduce current liabilities to historic
levels and thereby satisfy the current ratio covenant.
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.
(Registrant) BASIC EARTH SCIENCE SYSTEMS, INC.
By (Signature) /s/ Ray Singleton
(Name and title) Ray Singleton, President
(Date) December 21, 1995
