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As filed with the Securities and Exchange Commission on September 20, 1999
Registration No. 333-85435
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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BRIGHAM EXPLORATION COMPANY
(Exact name of Registrant as specified in its charter)
Delaware 75-2692967
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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Ben M. Brigham
6300 Bridge Point Parkway President, Chief Executive Officer
Building 2, Suite 500 and Chairman of the Board
Austin, Texas 78730 Brigham Exploration Company
(512) 427-3300 6300 Bridge Point Parkway
(Address, including zip code, and Building 2, Suite 500
telephone number, including area code, Austin, Texas 78730
of registrant's principal executive offices) (512) 427-3300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
Joe Dannenmaier
Thompson & Knight L.L.P.
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201
(214) 969-1700 (phone)
(214) 969-1751 (fax)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE(2)
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Common Stock, $.01 2,966,044
par value per share............. SHARES $2.53 $7,251,853 $2,017
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(1) With respect to the 1,211,580 shares included in the initial filing of this
Registration Statement and pursuant to rule 457(a), the proposed offering
price of $2.32 per share indicated in that filing is used. With respect to
the additional 1,754,464 shares, the indicated proposed offering price per
share is estimated pursuant to Rule 457(c) under the Securities Act of 1933
solely for the purpose of calculating the registration fee, based on the
average of the high and low sale prices of the Common Stock on the Nasdaq
National Market on September 15, 1999.
(2) $800 of this fee was paid with the initial filing of this Registration
Statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED SEPTEMBER 20, 1999
PROSPECTUS
[LOGO]
2,966,044 SHARES
BRIGHAM EXPLORATION COMPANY
6300 Bridge Point Parkway
Building 2, Suite 500
Austin, Texas 78730
(512) 427-3300
COMMON STOCK
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This prospectus covers the offer and sale by certain stockholders of
Brigham Exploration Company of up to 2,966,044 shares of Brigham common stock.
Three of the selling stockholders obtained their shares of Brigham
common stock in private placements completed prior to Brigham's initial public
offering in May 1997. The other selling stockholder obtained its shares of
Brigham common stock in a private placement by Brigham Exploration Company in
March 1999, described under the heading "Selling Stockholders."
The selling stockholders may offer their Brigham common stock through
public or private transactions, on or off The Nasdaq Stock Market's National
Market (the "Nasdaq"), at prevailing market prices, or at privately negotiated
prices. The selling stockholders can use broker-dealers to facilitate these
transactions. To the extent required, the specific shares to be sold, the terms
of the offering, including price, the names of any agent, dealer or underwriter,
and any applicable commission, discount or other compensation with respect to a
particular sale will be set forth in an accompanying prospectus supplement.
Brigham's common stock is listed on the Nasdaq under the symbol "BEXP."
On September 17, 1999, the last reported sale price of Brigham common stock on
the Nasdaq was $2.50 per share.
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 4 OF
THIS PROSPECTUS BEFORE PURCHASING ANY SHARES OF BRIGHAM COMMON STOCK.
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The shares of Brigham common stock offered or sold under this
prospectus have not been approved by the Securities and Exchange Commission or
any state securities commission, nor have these organizations determined that
this prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
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The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The date of this prospectus is September , 1999.
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You should rely only on the information contained in this document or
that to which we have referred you. We have not authorized anyone to provide you
with information that is different. This prospectus is not an offer to sell
these securities and is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front cover.
TABLE OF CONTENTS
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PAGE
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About This Prospectus........................................................3
Where You Can Find More Information..........................................3
Brigham......................................................................4
Risk Factors.................................................................4
Forward Looking Statements..................................................10
Selling Stockholders........................................................11
Plan of Distribution........................................................13
Use of Proceeds.............................................................14
Description of Capital Stock................................................14
Legal Matters...............................................................15
Experts.....................................................................15
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the SEC. This prospectus provides you with a general description of the
securities being offered. You should read this prospectus together with
additional information described under the heading "Where You Can Find More
Information" and any information contained in an accompanying prospectus
supplement.
We are complying with the SEC's plain English program. This is an
initiative launched by the SEC to make prospectuses and other information more
understandable to the general investor. To see more detail, you should read the
exhibits filed with this registration statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the SEC's Regional Offices at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and at 7 World Trade Center, Suite 1300, New York, New York 10048.
Our SEC filings are also available to the public over the Internet at the SEC's
web site at http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until all of the securities are sold.
o Annual Report on Form 10-K, as amended by Amendment No. 1 to Form 10-K,
for the year ended December 31, 1998.
o Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999
and June 30, 1999.
o Current Report on Form 8-K filed June 25, 1999. The Form 8-K includes
unaudited pro forma financial statements reflecting the divestiture by
Brigham of its entire interest in certain producing and non-producing
natural gas and oil properties.
o Proxy Statement dated April 14, 1999.
o Registration Statement on Form 8-A dated April 25, 1997 containing a
description of the Brigham common stock.
You may request a copy of these filings at no cost by writing or
telephoning us at the following address:
Brigham Exploration Company
Attn: Investor Relations
6300 Bridge Point Parkway
Building 2, Suite 500
Austin, Texas 78730
(512) 427-3300
[email protected]
You should rely only on the information incorporated by reference or
provided in this prospectus or contained in an accompanying prospectus
supplement. We have not authorized anyone else to provide you with different
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of this
document.
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BRIGHAM
Brigham Exploration Company ("we" or "Brigham") is an independent
exploration and production company that applies 3-D seismic imaging and other
advanced technologies to systematically explore and develop onshore oil and
natural gas provinces in the United States. We focus our 3-D seismic activity in
provinces where we believe 3-D technology may be effectively applied to generate
relatively large potential reserve volumes per well and per field, high
potential production rates and multiple producing objectives. Our exploration
activities are concentrated primarily in three core provinces: the Anadarko
Basin of western Oklahoma and the Texas Panhandle; the onshore Gulf Coast of
south Texas and, to a lesser extent, the transition zone of South Louisiana; and
West Texas.
We pioneered the acquisition of large scale onshore 3-D seismic surveys
for exploration, obtaining extensive 3-D seismic data and experience in
capturing undiscovered oil and natural gas reserves. As of December 31, 1998, we
have acquired over 5,200 square miles (3.3 million acres) of 3-D seismic data
and have identified an estimated 1,140 potential drilling locations, of which we
have drilled 440. We generate most of our exploratory projects and, therefore,
have the ability to retain a sizeable working interest to the extent that we
decide not to place interests with industry participants.
RISK FACTORS
Your investment in this common stock involves certain risks. In
addition to the other information contained or incorporated by reference in this
prospectus, you should carefully consider the following risk factors before
deciding whether an investment in the common stock is suitable for you.
WE ARE SUBSTANTIALLY LEVERAGED
Our outstanding long-term debt was $90 million as of June 30, 1999. The
indenture governing our senior subordinated secured notes limits the amounts of
additional debt borrowings, including borrowings under our credit facility or
other senior indebtedness. However, the indenture permits us to borrow under our
credit facility up to the lesser of $75 million or the borrowing base under the
credit facility ($56 million as of July 19, 1999), which would provide us with
the ability to borrow up to $8 million of additional indebtedness under our
credit facility as of July 19, 1999. In addition, the indenture allows us to
borrow up to $25 million of future subordinated indebtedness that is equal in
right of payment with the subordinated notes if the holders of the subordinated
notes have been given a first look and right to make a proposal for such
subordinated indebtedness.
Our level of indebtedness will have several important effects on our
operations, including those listed below.
o We will dedicate a substantial portion of our cash flow from
operations to the payment of interest on our indebtedness and
will not have these cash flows available for other purposes.
o The covenants in our credit facility and the indenture limit our
ability to borrow additional funds or dispose of assets and may
affect our flexibility in planning for, and reacting to, changes
in business conditions.
o Our ability to obtain additional financing in the future for
working capital, capital expenditures, acquisitions, general
corporate purposes or other purposes may be impaired.
We may also be required to alter our capitalization significantly to
accommodate future exploration, development or acquisition activities. These
changes in capitalization may significantly alter our leverage. Our ability to
meet our debt service obligations and to reduce our total indebtedness will be
dependent upon our future performance, which will be subject to general economic
conditions and to financial, business and other factors affecting our
operations, many of which are beyond our control. We cannot assure you that our
future performance will not be harmed by such economic conditions and financial,
business and other factors.
WE HAVE SUBSTANTIAL CAPITAL REQUIREMENTS
We make and will continue to make substantial capital expenditures in
our exploration and development projects. Our available capital resources at
June 30, 1999 were limited and not sufficient to fund our planned working
capital needs and capital expenditures for 1999. We intend to finance these
working capital needs and planned capital expenditures with cash
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flow from operations, borrowings available under the credit facility, the sales
of some of our interests in producing properties and 3-D seismic projects and
the potential issuance of additional equity securities.
We will require additional financing in the future to fund our
exploratory and developmental drilling and 3-D seismic acquisition activities at
currently budgeted levels. We cannot assure you that we will be able to secure
additional financing on reasonable terms or at all, or that financing will
continue to be available to us under our existing or new financing arrangements.
Without additional capital resources, our drilling and other activities may be
limited and our business, financial condition and results of operations may
suffer.
VOLATILITY OF OIL AND GAS MARKETS AFFECTS US
OIL AND NATURAL GAS PRICES ARE VOLATILE
Our revenues, operating results and future rate of growth depend highly
upon the prices we receive for our oil and natural gas production. Historically,
the markets for oil and natural gas have been volatile and are likely to
continue to be volatile in the future. Market prices of oil and natural gas
depend on many factors beyond our control, including:
o worldwide and domestic supplies of oil and natural gas;
o the ability of the members of the Organization of Petroleum
Exporting Countries to agree to and maintain oil price and
production controls;
o political instability or armed conflict in oil-producing
regions;
o the price and level of foreign imports;
o the level of consumer demand;
o the price and availability of alternative fuels;
o the availability of pipeline capacity;
o weather conditions;
o domestic and foreign governmental regulations and taxes; and
o the overall economic environment.
We cannot predict future oil and natural gas price movements with
certainty. During 1998, the high and low prices for oil on the NYMEX were $17.82
per Bbl and $10.72 per Bbl, and the high and low prices for natural gas on the
NYMEX were $2.69 per MMBtu and $1.65 per MMBtu. During the first six months of
1999, the high and low prices for oil on the NYMEX were $19.22 per Bbl and
$11.37 per Bbl, and the high and low prices for natural gas on the NYMEX were
$2.25 per MMBtu and $1.63 per MMBtu. Significant declines in oil and natural gas
prices for an extended period may have the following effects on our business:
o limit our financial condition, liquidity, ability to finance
planned capital expenditures and results of operations;
o reduce the amount of oil and natural gas that we can produce
economically;
o cause us to delay or postpone some of our capital projects;
o reduce our revenues and operating income; and
o reduce the carrying value of our oil and natural gas
properties.
OUR HEDGING TRANSACTIONS MAY NOT PREVENT LOSSES
In an attempt to reduce our sensitivity to energy price volatility, we
use swap arrangements that generally result in a fixed price over a period of
six to eighteen months. If we do not produce our oil and natural gas reserves at
rates equivalent to our hedged position, we would be required to satisfy our
obligations under hedging contracts on potentially unfavorable terms without the
ability to hedge that risk through sales of comparable quantities of our own
production. Because the terms of our hedging contracts are based on assumptions
and estimates of numerous factors such as cost of production and pipeline and
other transportation costs to delivery points, substantial differences between
the hedged prices and actual results could harm
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our anticipated profit margins and our ability to manage the risk associated
with fluctuations in oil and natural gas prices. Hedging contracts limit the
benefits we will realize if actual prices rise above the contract prices. We
could be financially harmed if the other party to the hedging contracts proves
unable or unwilling to perform its obligations under such contracts.
EXPLORATORY DRILLING IS A SPECULATIVE ACTIVITY INVOLVING NUMEROUS RISKS AND
UNCERTAIN COSTS
WE ARE DEPENDENT ON EXPLORATORY DRILLING ACTIVITIES
Our revenues, operating results and future rate of growth depend highly
upon the success of our exploratory drilling program. Exploratory drilling
involves numerous risks, including the risk that we will not encounter
commercially productive natural gas or oil reservoirs. We cannot always predict
the cost of drilling, and we may be forced to limit, delay or cancel drilling
operations as a result of a variety of factors, including:
o unexpected drilling conditions;
o pressure or irregularities in formations;
o equipment failures or accidents;
o adverse weather conditions;
o compliance with governmental requirements; and
o shortages or delays in the availability of drilling rigs and
the delivery of equipment.
We may not be successful in our future drilling activities because even
with the use of 3-D seismic and other advanced technologies, exploratory
drilling is a speculative activity. We could incur losses because our use of 3-D
seismic data and other advanced technologies requires greater predrilling
expenditures than traditional drilling strategies. Even when fully utilized and
properly interpreted, our 3-D seismic data and other advanced technologies only
assist us in identifying subsurface structures and do not indicate whether
hydrocarbons are in fact present in those structures. Because we interpret the
areas desirable for drilling from 3-D seismic data gathered over large areas, we
may not acquire option and lease rights until after the seismic data is
available and, in some cases, until the drilling locations are also identified.
Although we have identified numerous potential drilling locations, we cannot
assure you that we will ever lease, drill or produce oil or natural gas oil from
these or any other potential drilling locations. We cannot assure you that we
will be successful in our drilling activities, that our overall drilling success
rate for activity within a particular province will not decline, or that our
completed wells will ultimately produce our estimated economically recoverable
reserves. Unsuccessful drilling activities could materially harm our operations
and financial condition.
WE ARE SUBJECT TO VARIOUS CASUALTY RISKS
Our operations are subject to hazards and risks inherent in drilling
for and producing and transporting oil and natural gas, such as:
o fires;
o natural disasters;
o formations with abnormal pressures;
o blowouts, cratering and explosions; and
o pipeline ruptures and spills.
Any of these hazards and risks can result in the loss of hydrocarbons,
environmental pollution, personal injury claims and other damage to our
properties and the property of others.
WE MAY NOT HAVE ENOUGH INSURANCE TO COVER SOME OPERATING RISKS
We maintain insurance coverage against some, but not all, potential
losses in order to protect against operating hazards. We may elect to
self-insure if our management believes that the cost of insurance, although
available, is excessive relative to the risks presented. We generally maintain
insurance for the hazards and risks inherent in drilling for and producing and
transporting oil and natural gas and believe this insurance is adequate. If an
event occurs that is not covered, or not fully
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covered, by insurance, it could harm our financial condition and results of
operations. In addition, we cannot fully insure against pollution and
environmental risks.
THE MARKETABILITY OF OUR PRODUCTION IS DEPENDENT ON FACILITIES THAT WE
TYPICALLY DO NOT OWN OR CONTROL
The marketability of our production depends in part upon the
availability, proximity and capacity of natural gas gathering systems, pipelines
and processing facilities. We generally deliver natural gas through gas
gathering systems and gas pipelines that we do not own. Our ability to produce
and market oil and natural gas could be harmed by any dramatic change in market
factors or by:
o federal and state regulation of oil and natural gas production
and transportation;
o tax and energy policies;
o changes in supply and demand; and
o general economic conditions.
WE HAVE HISTORICAL OPERATING LOSSES AND OUR FUTURE RESULTS MAY VARY
WE HAVE INCURRED NET LOSSES IN EACH YEAR OF OPERATION
We cannot assure you that we will be profitable in the future. At June
30, 1999, we had an accumulated deficit of $51.1 million and total stockholders'
equity of $11.2 million. We have recognized the following net losses since 1994:
$1.3 million in 1994, $1.6 million in 1995, $450,000 in 1996, $1.1 million
(including a net $1.2 million non-cash deferred income tax charge incurred in
connection with our conversion from a partnership to a corporation) in 1997,
$33.3 million (including a $24.8 million non-cash writedown in the carrying
value of our natural gas and oil properties) in 1998, and $17.7 million
(including a $12.2 million non-cash loss on the sale of natural gas and oil
properties) during the first six months of 1999.
OUR FUTURE OPERATING RESULTS MAY FLUCTUATE
Our future operating results may fluctuate significantly depending upon
a number of factors, including:
o industry conditions;
o prices of oil and natural gas;
o rates of drilling success;
o capital availability;
o rates of production from completed wells; and
o the timing and amount of capital expenditures.
This variability could cause our business, financial condition and
results of operations to suffer. In addition, any failure or delay in the
realization of expected cash flows from operating activities could limit our
ability to invest and participate in economically attractive projects.
MAINTAINING RESERVES AND REVENUES IN THE FUTURE DEPENDS ON SUCCESSFUL
EXPLORATION AND DEVELOPMENT
In general, production from oil and natural gas properties declines as
reserves are depleted, with the rate of decline depending on reservoir
characteristics. Except to the extent we conduct successful exploration and
development activities or acquire properties containing proved reserves, or
both, our proved reserves will decline as reserves are produced. Our future oil
and natural gas production depends highly upon our ability to economically find,
develop or acquire reserves in commercial quantities.
The business of exploring for or developing reserves is capital
intensive. Reductions in our cash flow from operations and limitations on or
unavailability of external sources of capital may impair our ability to make the
necessary capital investment to maintain or expand our asset base of oil and
natural gas reserves. In addition, we cannot be certain that our
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future exploration and development activities will result in additional proved
reserves or that we will be able to drill productive wells at acceptable costs.
Furthermore, although significant increases in prevailing prices for oil and
natural gas could cause increases in our revenues, our finding and development
costs could also increase. Finally, we participate in a percentage of our wells
as a non-operator. The failure of an operator of our wells to adequately perform
operations, or an operator's breach of the applicable agreements, could harm us.
WE ARE SUBJECT TO UNCERTAINTIES IN RESERVE ESTIMATES AND FUTURE NET CASH FLOWS
There is substantial uncertainty in estimating quantities of proved
reserves and projecting future production rates and the timing of development
expenditures. No one can measure underground accumulations of oil and natural
gas in an exact way. Accordingly, oil and natural gas reserve engineering
requires subjective estimations of those accumulations. Estimates of other
engineers might differ widely from those of our independent petroleum engineers.
Accuracy of reserve estimates depends on the quality of available data and on
engineering and geological interpretation and judgment. Our independent
petroleum engineers may make material changes to reserve estimates based on the
results of actual drilling, testing, and production. As a result, our reserve
estimates often differ from the quantities of oil and natural gas we ultimately
recover. Also, we make certain assumptions regarding future oil and natural gas
prices, production levels, and operating and development costs that may prove
incorrect. Any significant variance from these assumptions could greatly affect
our estimates of reserves, the economically recoverable quantities of oil and
natural gas attributable to any particular group of properties, the
classifications of reserves based on risk of recovery and estimates of the
future net cash flows.
Actual future net cash flows also will be affected by factors such as:
o the amount and timing of actual production;
o supply and demand for oil and natural gas;
o limits or increases in consumption by gas purchasers; and
o changes in governmental regulations or taxation.
The timing of both our production and our incurrence of expenses in
connection with the development and production of oil and natural gas properties
will affect the timing of actual future net cash flows from proved reserves, and
thus their actual present value. In addition, the 10% discount factor we use
when calculating discounted future net cash flows in compliance with the SEC
reporting requirements may not necessarily be the most appropriate discount
factor based on interest rates in effect from time to time and risks associated
with us or the oil and gas industry in general.
WE FACE SIGNIFICANT COMPETITION
We operate in the highly competitive areas of oil and natural gas
exploration, exploitation, acquisition and production with other companies. We
face intense competition from a large number of independent, technology-driven
companies as well as both major and other independent oil and natural gas
companies in a number of areas such as:
o seeking to acquire desirable producing properties or new leases
for future exploration;
o marketing our oil and natural gas production; and
o seeking to acquire the equipment and expertise necessary to
operate and develop those properties.
Many of our competitors have financial and other resources
substantially in excess of those available to us. This highly competitive
environment could harm our business.
WE ARE SUBJECT TO VARIOUS GOVERNMENTAL REGULATIONS AND ENVIRONMENTAL RISKS
Our business is subject to federal, state and local laws and
regulations relating to the exploration for, and the development, production and
marketing of, oil and natural gas, as well as safety matters. Although we
believe we are in substantial compliance with all applicable laws and
regulations, legal requirements are frequently changed and subject to
interpretation, and we are unable to predict the ultimate cost of compliance
with these requirements or their effect on our operations. We may be required to
make significant expenditures to comply with governmental laws and regulations.
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Our operations are subject to complex environmental laws and
regulations adopted by federal, state and local governmental authorities.
Environmental laws and regulations change frequently, and the implementation of
new, or the modification of existing, laws or regulations could harm us. The
discharge of natural gas, oil, or other pollutants into the air, soil or water
may give rise to significant liabilities on our part to the government and third
parties and may require us to incur substantial costs of remediation. We cannot
be certain that existing environmental laws or regulations, as currently
interpreted or reinterpreted in the future, or future laws or regulations will
not harm our results of operations and financial condition.
OUR BUSINESS MAY SUFFER IF WE LOSE KEY PERSONNEL
We have assembled a team of geologists, geophysicists and engineers who
have considerable experience in applying 3-D imaging technology to explore for
oil and natural gas. We depend upon the knowledge, skills and experience of
these experts to provide 3-D imaging and assist us in reducing the risks
associated with our participation in oil and natural gas exploration projects.
In addition, the success of our business depends, to a significant extent, upon
the abilities and continued efforts of our management, particularly Ben M.
Brigham, our Chief Executive Officer, President and Chairman of the Board. We
have an employment agreement with Ben M. Brigham, but do not have an employment
agreement with any of our other employees. We have key man life insurance on Mr.
Brigham in the amount of $2 million. If we lose the services of our key
management personnel or technical experts, or are unable to attract additional
qualified personnel, our business, financial condition, results of operations,
development efforts and ability to grow could suffer. We cannot assure you that
we will be successful in attracting and retaining such executives,
geophysicists, geologists and engineers.
CONTROL BY CERTAIN STOCKHOLDERS AND CERTAIN ANTI-TAKEOVER PROVISIONS MAY AFFECT
YOU
CERTAIN OF OUR AFFILIATES CONTROL A MAJORITY OF THE OUTSTANDING COMMON
STOCK
As of March 26, 1999, our directors, executive officers and principal
stockholders, and certain of their affiliates, beneficially owned approximately
63% of our outstanding common stock. Accordingly, these stockholders, as a
group, will be able to control the outcome of stockholder votes, including votes
concerning the election of directors, the adoption or amendment of provisions in
our certificate of incorporation or bylaws, and the approval of mergers and
other significant corporate transactions. The existence of these levels of
ownership concentrated in a few persons makes it unlikely that any other holder
of common stock will be able to affect our management or direction. These
factors may also have the effect of delaying or preventing a change in our
management or voting control.
CERTAIN ANTI-TAKEOVER PROVISIONS MAY AFFECT YOUR RIGHTS AS A STOCKHOLDER
Our certificate of incorporation authorizes our Board of Directors to
issue up to 10 million shares of preferred stock without stockholder approval
and to set the rights, preferences and other designations, including voting
rights, of those shares as the Board of Directors may determine. These
provisions, alone or in combination with the other matters described in the
preceding paragraph may discourage transactions involving actual or potential
changes in our control, including transactions that otherwise could involve
payment of a premium over prevailing market prices to holders of our common
stock. We are also subject to provisions of the Delaware General Corporation Law
that may make some business combinations more difficult.
WE ARE SUBJECT TO GENERAL BUSINESS RISKS
WE HAVE YEAR 2000 RISKS
Many computer software systems, as well as hardware and equipment using
date-sensitive data, were structured to use a two-digit date field. As a result,
they may not be able to properly recognize dates in the Year 2000. We currently
expect that any costs necessary for us to become Year 2000 compliant will not
harm our financial condition, operations or liquidity. However, we cannot
reasonably estimate the potential impact on our financial condition and
operations if key third parties including, among others, suppliers, contractors,
joint venture participants, financial institutions, customers and governments do
not become Year 2000 compliant on a timely basis. We cannot assure you of the
following:
o that we will be able to complete any necessary remediation or
replacement of our critical systems, facilities and equipment or
establish alternative procedures in a timely manner;
o that those with whom we conduct business will be successful in
implementing timely solutions; or
o that Year 2000 issues will not have a harmful effect on our
business, financial position and results of operations.
-9-
<PAGE> 11
THE MARKET PRICE OF OUR STOCK PRICE IS VOLATILE
The trading price of our common stock and the price at which we may
sell securities in the future is subject to large fluctuations in response to
any of the following: limited trading volume in our stock, changes in government
regulations, quarterly variations in operating results, our involvement in
litigation, general market conditions, the prices of oil and natural gas,
announcements by us and our competitors, our liquidity, our ability to raise
additional funds and other events.
FORWARD-LOOKING STATEMENTS
This prospectus includes statements that are "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act of 1934, as amended, including statements
regarding our financial position, business strategy and other plans and
objectives for future operations and any other statements which are not
historical facts. Although we believe that the expectations reflected in these
forward-looking statements are reasonable, we cannot assure you that the actual
results or developments we anticipate will be realized or, even if substantially
realized, that they will have the expected effects on our business or
operations. Among the factors that could cause actual results to differ
materially from our expectations are the following:
o ability to raise additional capital;
o fluctuations in oil and natural gas prices;
o inherent uncertainties in interpreting engineering data;
o operating hazards;
o delays or cancellations of drilling operations for a variety of
reasons;
o competition;
o our ability to successfully integrate the business and
operations of acquired companies;
o general economic conditions;
o government regulations; and
o other factors disclosed under "Risk Factors" and elsewhere in
this prospectus.
These factors expressly qualify all subsequent oral and written
forward-looking statements attributable to us or persons acting on our behalf.
We assume no obligation to update any of these statements.
-10-
<PAGE> 12
SELLING STOCKHOLDERS
The following table sets forth the names of the selling stockholders,
the aggregate number of shares owned by each selling stockholder as of August
31, 1999, the percentage of our outstanding common stock owned by each such
selling stockholder as of August 31, 1999, the aggregate number of shares to be
offered by each selling stockholder, the aggregate number of shares to be owned
by each selling stockholder after the sale of all shares in this offering and
the percentage of our outstanding common stock that will be owned by each such
selling stockholder thereafter, in each case assuming the offering and sale of
all shares covered by this prospectus and no additional issuances to or
purchases by these selling stockholders of our common stock.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING AFTER OFFERING
-------------------------------- ---------------------------
NUMBER OF
NUMBER OF SHARES NUMBER OF
SELLING STOCKHOLDERS SHARES PERCENT (1) BEING OFFERED SHARES PERCENT (1)
- --------------------------------------- --------------- -------------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Veritas DGC Land, Inc. 1,211,580 8.35% 1,211,580 -- --
RIMCO Partners, L.P. II (2) 612,308 4.22% 612,308 -- --
RIMCO Partners, L.P. III (2) 307,031 2.11% 307,031 -- --
RIMCO Partners, L.P. IV (2) 835,125 5.75% 835,125 -- --
--------------- -------------- -------------- ----------- -------------
Total......................... 2,966,044 20.43% 2,966,044 -- --
=============== ============== ============== =========== =============
</TABLE>
- --------------------
(1) Based on 14,517,786 shares of Brigham common stock issued and
outstanding as of August 31, 1999.
(2) Resource Investors Management Company Limited Partnership ("RIMCO") is
the general partner of each of RIMCO Partners, L.P. II, RIMCO Partners,
L.P. III and RIMCO Partners, L.P. IV. As of August 31, 1999, RIMCO
beneficially owned no Brigham common stock other than the 1,754,464
shares of Brigham common stock owned by the three RIMCO-affiliated
selling stockholders, which collectively represented 12.08% of our
outstanding common stock as of August 31, 1999. The general partner of
RIMCO is RIMCO Associates, Inc.
Veritas Land DGC, Inc.
In the past, we have entered into certain industry alliances with
Veritas Land DGC, Inc. ("Veritas") in connection with our acquisition of seismic
data in certain project areas. In exchange for our commitment to Veritas, we and
our assignees only pay a portion of the 3-D seismic acquisition costs as the
data is acquired. As we lease acreage or drill wells in these project areas, we
pay Veritas the balance of the deferred costs in the form of leasing and
drilling fees until such deferred seismic acquisition costs are repaid or until
certain time periods have occurred. In the event that the outstanding balance of
deferred seismic acquisition costs exceeds certain threshold amounts, we must
pre-pay part of the leasing and drilling fees to cause the outstanding balance
to fall below the current threshold amount. In addition, an affiliate of Veritas
provides employees that maintain and operate seismic data processing
workstations in our offices.
Veritas obtained its shares of Brigham common stock in a private
placement pursuant to an Exchange Agreement dated as of March 30, 1999 by and
between Brigham Exploration Company and Veritas DGC Land, Inc. We are
registering the shares pursuant to a registration rights agreement entered into
at the same time. Pursuant to the exchange agreement, as of August 31, 1999 we
have issued 1,211,580 shares of our common stock valued at $3.50 per share to
Veritas in satisfaction of payment obligations due to Veritas for certain
seismic acquisition and processing services.
We may contract for additional seismic services from Veritas. The
exchange agreement provided that we may pay up to $1 million in seismic
processing services performed or invoiced by Veritas after March 26, 1999 in
newly issued shares of Brigham common stock, valued at $3.50 per share, in the
event that we do not elect to pay for such services in cash. If we do not elect
to pay for any additional seismic processing services performed by Veritas in
cash, we would issue an aggregate of approximately 104,835 additional shares to
Veritas, representing approximately .72% of Brigham's outstanding common stock
as of August 31, 1999.
-11-
<PAGE> 13
RIMCO
The RIMCO-affiliated selling stockholders obtained their shares of
Brigham common stock prior to our May 1997 initial public offering by exchanging
our 5% Notes in an aggregate principal amount of $16.0 million for an aggregate
of 1,754,464 shares of Brigham common stock, in connection with the exchange of
partnership interests in our predecessor partnership for Brigham common stock.
We are registering the shares pursuant to the exercise of "piggyback"
registration rights granted in a registration rights agreement entered into at
the time of the exchange.
In 1994, through our subsidiary Quest Resources, L.L.C., we formed
Venture Acquisitions, L.P. ("Venture") with affiliates of RIMCO to provide us
with the capital to acquire interests in certain potential drilling locations,
producing properties and 3-D seismic projects. As of August 31, 1999, the RIMCO
affiliates have contributed $6.8 million to Venture, and we have contributed
$751,345, $374,358 of which is in the form of a receivable of Venture. Until the
first payout under the Venture limited partnership agreement, our share of all
capital costs is 5%, and our share of revenues and related production expenses
and costs is 10%. Between the first and second payout levels, our share of
capital costs and revenues and related production expenses and costs is 25% and
thereafter increases to 50%. Venture acquired from us an interest in (i) a 3-D
project for approximately $75,000 in 1995, and (ii) two 3-D delineated potential
drilling locations and 3-D seismic data for approximately $83,000 in 1996. We
billed Venture approximately $16,500 in 1996, $56,658 in 1997 and $17,768 in
1998 for its proportionate share of exploration and overhead costs. Because
RIMCO was not an affiliate of Brigham when the Venture partnership was formed,
we believe that the terms of the Venture partnership are no less favorable than
could be obtained from an unaffiliated third party.
In November 1994, Brigham, certain RIMCO affiliates and other unrelated
industry participants entered into a geophysical exploration agreement creating
an area of mutual interest in our Esperson Dome Project in Liberty and Harris
counties, Texas. We financed our participation in this project by assigning our
interest, and obligation to bear costs, to Vaquero Gas Company, Inc.
("Vaquero"), a RIMCO affiliate, subject to a 5% net profits overriding royalty
interest and the right to receive up to 50% of Vaquero's interest on the
occurrence of certain payouts. We also retained responsibility for managing the
3-D seismic data acquisition and interpretation of the data after it had been
acquired. During 1996, 1997 and 1998, we received approximately $123,000,
$50,000 and $23,000, respectively, from the RIMCO affiliates, including Vaquero,
for workstation time and geoscientists' time in interpreting the 3-D seismic
data that were acquired. Because RIMCO was not an affiliate of Brigham when the
project was initiated and the interest to Vaquero was transferred, we believe
that the terms of the arrangement are no less favorable than could be obtained
from an unaffiliated third party.
In January 1997, Brigham, certain RIMCO affiliates and Tigre Energy
Corporation ("Tigre") entered into an agreement under which Brigham had been
initially assigned an undivided 25% interest (subject to a proportionately
reduced 3% overriding royalty interest) in a project ("Tigre Point") located in
Vermillion Parish, Louisiana in return for paying certain costs of acquiring 3-D
seismic and land within the project area. We acquired an additional 12.5%
working interest from those RIMCO affiliates and an additional 37.5% working
interest from Tigre in parts of the project under the same terms as the initial
25% interest. We believe that the arrangements with RIMCO affiliates relating to
Tigre Point are on terms no less favorable than could be obtained from an
unaffiliated third party, because those RIMCO affiliates and Tigre, an
unaffiliated third party, are participants in the project on substantially
similar terms.
Brigham and an affiliate of Universal Seismic Associates, Inc. ("USA")
in July 1996 entered into a geophysical exploration agreement covering an area
of mutual interest on the Gulf Coast. At the time the agreement was made, RIMCO
affiliates beneficially owned approximately 22% of the outstanding common stock
of USA, a public company. Under the terms of the agreement, USA conducted a 3-D
seismic program established by Brigham and USA and processed the data acquired
under the program at cost, and we will interpret the resulting seismic data for
the benefit of Brigham and USA at no charge to USA. Subject to a party's
electing not to participate in an acquired interest, Brigham and USA will each
own an undivided 50% interest in all land interests acquired within the area of
mutual interest. Through December 31, 1997, we had incurred $209,314 of costs
under those arrangements. We did not incur any costs in 1998 under those
arrangements. Based on our experience in acquiring 3-D seismic data, we believe
that we have acquired 3-D seismic data under this agreement on terms, and that
the arrangement is on terms, no less favorable than could be obtained from an
unaffiliated third party.
In 1996 and 1997, we recognized interest expense payable to the
RIMCO-affiliated selling stockholders of approximately $800,000 and $170,000,
respectively, on the 5% Notes that were exchanged in 1997 for Brigham common
stock. Of this obligation, $320,000 and $50,000 recognized in 1996 and 1997,
respectively, was not paid in cash to RIMCO affiliates, but was exchanged in
1997 for Brigham common stock as part of the exchange of partnership interests
described above. In 1996, 1997 and 1998, we distributed to RIMCO $82,097,
$48,150 and $25,934, respectively for RIMCO's
-12-
<PAGE> 14
overriding royalty interest in certain natural gas and oil properties. Gary J.
Milavec, a former director of Brigham and a former member of our Compensation
Committee, was employed by RIMCO until June 11, 1999, and is as of the date of
this prospectus a consultant to RIMCO.
PLAN OF DISTRIBUTION
The Brigham common stock may be sold from time to time by the selling
stockholders, or by their donees or pledgees selling shares received after the
date of this prospectus, subject to certain restrictions. All sales may be made
by the selling stockholders on the Nasdaq National Market, in privately
negotiated transactions or otherwise. The selling stockholders may sell their
shares at market prices prevailing at the time of sale, at prices related to
such prevailing market prices, at negotiated prices or at fixed prices. The
common stock may be sold by one or more of the following methods:
o a block trade in which the broker or dealer so engaged will
attempt to sell the common stock as agent, but may position and
resell a portion of a block as principal to facilitate the
transaction;
o an underwritten public offering;
o sales to a broker or dealer as principal, and resale by such
broker or dealer, for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
o privately negotiated transactions.
The selling stockholders may effect such transactions by selling the
common stock through or to brokers or dealers, and such brokers or dealers may
receive compensation in the form of discounts or commissions from the selling
stockholders, and may receive commissions from the purchasers of the common
stock for whom they may act as agent. Upon our being notified by a selling
stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of any of the common stock offered hereby through a
block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, to the extent required a prospectus
supplement will be filed that will set forth the specific shares to be sold and
the terms of the offering, including the name or names of any underwriters or
dealer-agents, any discounts, commissions and other items constituting
compensation from the selling stockholders and any discounts, commission or
concessions allowed or reallowed or paid to dealers. In addition, upon our being
notified that a donee or pledgee intends to sell more than 500 shares, if
required a supplement to this prospectus will be filed.
Any of the shares covered by this prospectus which qualifies for sale
pursuant to Rule 144 or Rule 145 under the Securities Act of 1933 may be sold
under that rule rather than pursuant to this prospectus.
We cannot assure you that the selling stockholders will sell any or all
of the common stock offered by them under this prospectus.
We will pay all fees and expenses incident to the preparation and
filing of the Registration Statement and this prospectus, including legal and
accounting fees and expenses and any printing expenses, except for costs of
separate counsel for selling stockholders other than Veritas DGC Land, Inc. All
underwriting discounts and any selling commissions payable with respect to sales
of the common stock will be paid by the selling stockholders. We will receive no
part of the proceeds from sales of the common stock. We intend to keep the
Registration Statement effective until the earlier of the completion of the
offering or March 30, 2001.
The selling stockholders and any broker-dealer acting in connection
with the sale of the common stock offered hereby may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, in which any
discounts, concessions or commissions received by them, which are not expected
to exceed those customary in the types of transactions involved, or any profit
on resales of the common stock by them, may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933. We have advised the
selling stockholders that the anti-manipulation rules of Regulation M
promulgated by the Securities and Exchange Commission may apply to their sales
in the market and have informed them that they will be subject to the prospectus
delivery requirements of the Securities Act of 1933. We have agreed to indemnify
the selling stockholders against certain liabilities arising under the
Securities Act of 1933 from sales of our common stock.
-13-
<PAGE> 15
USE OF PROCEEDS
All net proceeds from the sale of the Brigham shares will go to the
selling stockholders. Accordingly, we will not receive any proceeds from sales
of the Brigham shares.
DESCRIPTION OF CAPITAL STOCK
The following descriptions provide a summary of our capital stock.
COMMON STOCK
Brigham is authorized to issue up to 30 million shares of common stock,
par value $.01 per share. The holders of Brigham common stock are entitled to
one vote for each share held of record on all matters submitted to the
stockholders. Our certificate of incorporation does not allow the stockholders
to take action by less than unanimous consent. The holders of Brigham common
stock are entitled to participate equally in dividends, if any are declared by
our Board of Directors out of legally available funds, and in the distribution
of assets in the event of liquidation. However, the payment of any dividends and
the distribution of assets to holders of our common stock will be subject to any
prior rights of outstanding shares of Brigham preferred stock. We have never
paid cash dividends on our common stock. The holders of Brigham common stock
have no preemptive or conversion rights, redemption rights, or sinking fund
provisions. The Brigham common stock is not assessable.
PREFERRED STOCK
Brigham is authorized to issue up to 10 million shares of preferred
stock, par value $.01 per share. No shares of Brigham preferred stock were
outstanding as of the date of this prospectus. Our Board of Directors may
establish, without stockholder approval, one or more classes or series of
Brigham preferred stock having the number of shares, designations, relative
voting rights, dividend rates, liquidation and other rights, preferences, and
limitations that our Board of Directors may designate. The issuance of Brigham
preferred stock could adversely affect the voting power of holders of Brigham
common stock and restrict their rights to receive payments upon our liquidation.
It could also have the effect of delaying, deferring or preventing a change in
control of Brigham. We have no present intention to issue Brigham preferred
stock.
DELAWARE LAW PROVISIONS
Section 203 of the Delaware General Corporation Law applies to our
company. Generally, Section 203 prohibits us from engaging in a "business
combination" (as defined in Section 203) with an "interested stockholder"
(defined generally as a person owning 15% or more of our outstanding voting
stock) for three years following the date that person becomes an interested
stockholder, unless one of the following applies:
o before such person became an interested stockholder, our Board
of Directors approved the transaction in which the interested
stockholder became an interested stockholder or approved the
business combination;
o upon completion of the transaction that resulted in the
interested stockholder's becoming an interested stockholder,
the interested stockholder owns at least 85% of the voting
stock outstanding at the time the transaction commenced
(excluding stock held by directors who are also officers of
Brigham and by employee stock plans that do not provide
employees with the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender or
exchange offer); or
o following the transaction in which such person became an
interested stockholder, the business combination is approved by
our Board of Directors and authorized at a meeting of
stockholders by the affirmative vote of the holders of at least
two-thirds of the outstanding voting stock not owned by the
interested stockholder.
Under Section 203, these restrictions also do not apply to certain
business combinations if both of the following conditions are satisfied:
o the business combination is proposed by an interested
stockholder following the announcement or notification of one
of certain extraordinary transactions involving Brigham and a
person who either
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<PAGE> 16
-- was not an interested stockholder during the previous
three years; or
-- who became an interested stockholder with the
approval of a majority of our directors
o that extraordinary transaction is approved or not opposed by a
majority of our directors who were directors before any person
became an interested stockholder in the previous three years or
who were recommended for election or elected to succeed such
directors by a majority of such directors then in office.
LEGAL MATTERS
The legality of the common stock offered hereby will be passed upon for
us by Thompson & Knight, P.C., Dallas, Texas.
EXPERTS
The financial statements incorporated in this prospectus by reference
to the Annual Report on Form 10-K, as amended by Amendment No. 1 to Form 10-K,
of Brigham Exploration Company for the year ended December 31, 1998, have been
so incorporated in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and auditing.
The references to the report of Cawley, Gillespie & Associates, Inc.,
independent petroleum engineers, incorporated by reference in this prospectus,
have been so incorporated in reliance on the report of Cawley, Gillespie &
Associates, Inc. that estimates proved reserves, future net cash flows from such
proved reserves and the present value of such estimated future net cash flows
for Brigham's properties as of December 31, 1998, and is made in reliance upon
the authority of such firm as experts with respect to such matters.
-15-
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Except for the SEC registration fee, all expenses are estimated. All
such expenses will be paid by the Registrant.
<TABLE>
<S> <C>
SEC registration fee.............................................. $ 2,017
Nasdaq listing fee................................................ $ 17,500
Accounting fees and expenses...................................... 1,000
Legal fees and expenses........................................... 5,000
Printing and engraving expense.................................... $ 1,000
Miscellaneous..................................................... $ 483
---------
Total.................................................... $ 27,000
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with Section 102(b)(7) of the Delaware General
Corporation Law ("DGCL"), Brigham's Certificate of Incorporation includes a
provision that, to the fullest extent permitted by law, eliminates the personal
liability of members of its Board of Directors to Brigham or its stockholders
for monetary damages for breach of fiduciary duty as a director. Such provision
does not eliminate or limit the liability of a director (1) for any breach of a
director's duty of loyalty to Brigham or its stockholders, (2) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of a law, (3) for paying an unlawful dividend or approving an illegal
stock repurchase (as provided in Section 174 of the DGCL) or (4) for any
transaction from which the director derived an improper personal benefit.
Under Section 145 of the DGCL, the Registrant has the power to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding (other than
an action by or in the right of the corporation) by reason of the fact that the
person is or was a director, officer, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, reasonably incurred in
connection with such action, suit or proceeding. The power to indemnify applies
only if the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the corporation, and
with respect to any criminal action or proceeding, had no reasonable cause to
believe the person's conduct was unlawful.
In the case of an action by or in the right of the Registrant, no
indemnification may be made with respect to any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Registrant unless
and only to the extent that the court of chancery or the court in which such
action or suit was brought shall determine that despite the adjudication of
liability such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper. Section 145 of the DGCL further
provides that to the extent a director or officer of the Registrant has been
successful in the defense of any action, suit or proceeding referred to above or
in the defense of any claim, issue or matter therein, that person shall be
indemnified against expenses (including attorney's fees) actually and reasonably
incurred in connection therewith.
The Registrant also has the power to purchase and maintain insurance on
behalf of any person covering any liability incurred in that person's capacity
as a director, officer, employee or agent of the corporation, or arising out of
that person's status as such, whether or not the corporation would have the
power to indemnify against the liability.
The Certificate of Incorporation and Bylaws provide that the Registrant
will indemnify its officers and directors and former officers and directors
against any expenses, judgments or settlement payments sustained or paid by such
persons as a result of having acted as an officer or director of the Registrant,
or, at the request of the Registrant, as an officer, director, agent or employee
of another business entity. The Certificate of Incorporation and Bylaws further
provide that the Registrant may, by action of its Board of Directors, provide
indemnification to employees and agents of the Registrant, individually or as a
group, with the same scope and effect as the indemnification of directors and
officers.
Each Indemnity Agreement between Brigham and its executive officers
provides for the indemnification in certain instances against liability and
expenses incurred in connection with proceedings brought by or in the right of
Brigham or by third parties by reason of a person serving as an officer or
director of Brigham.
II-1
<PAGE> 18
ITEM 16. EXHIBITS.
The information required by this Item 16 is set forth in the Index to
Exhibits accompanying this Registration Statement.
ITEM 17. UNDERTAKINGS.
(a) Rule 415 Offering.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) Filings incorporating subsequent Exchange Act documents by
reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Request for acceleration of effective date.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described in Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
II-2
<PAGE> 19
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-3
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Austin, State of Texas,
on September 20, 1999.
BRIGHAM EXPLORATION COMPANY
(Registrant)
By: /s/ Ben M. Brigham
----------------------------
Ben M. Brigham
Chief Executive Officer and
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Ben M. Brigham President, Chief Executive Officer and September 20, 1999
- ------------------------------------ Chairman of the Board (principal executive
Ben M. Brigham officer)
/s/ Curtis F. Harrell Chief Financial Officer and Director (principal September 20, 1999
- ------------------------------------ financial and accounting officer)
Curtis F. Harrell
/s/ Anne L. Brigham* Director September 20, 1999
- ------------------------------------
Anne L. Brigham
/s/ Harold D. Carter* Director September 20, 1999
- ------------------------------------
Harold D. Carter
/s/ Alexis M. Cranberg* Director September 20, 1999
- ------------------------------------
Alexis M. Cranberg
/s/ Stephen P. Reynolds* Director September 20, 1999
- ------------------------------------
Stephen P. Reynolds
/s/ W. Craig Childers* Director September 20, 1999
- ------------------------------------
W. Craig Childers
*By: /s/ Ben M. Brigham September 20, 1999
--------------------------------
Ben M. Brigham
Attorney-in-fact
</TABLE>
II-4
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
3.1 Certificate of Incorporation (filed as Exhibit 3.1 to Brigham's
Registration Statement on Form S-1 (Registration No. 333-22491), and
incorporated herein by reference).
3.2 Bylaws (filed as Exhibit 3.2 to Brigham's Registration Statement on
Form S-1 (Registration No. 333-22491), and incorporated herein by
reference).
4.1 Form of Common Stock Certificate (filed as Exhibit 4.1 to Brigham's
Registration Statement on Form S-1 (Registration No. 333-22491), and
incorporated herein by reference).
4.2 Exchange Agreement dated as of March 30, 1999 by and between Brigham
Exploration Company and Veritas DGC Land, Inc. (filed as Exhibit 10.41
to Amendment No. 1 to Brigham's Annual Report on Form 10-K for the
year ended December 31, 1998, and incorporated herein by reference).
4.3 Registration Rights Agreement dated as of March 30, 1999 by and
between Brigham Exploration Company and Veritas DGC Land, Inc.(filed
as Exhibit 10.42 to Amendment No. 2 to Brigham's Annual Report on Form
10-K for the year ended December 31, 1998, and incorporated herein by
reference).
4.4 Registration Rights Agreement dated February 26, 1997 by and among
Brigham Exploration Company, General Atlantic Partners III L.P.,
GAP-Brigham Partners, L.P., RIMCO Partners, L.P. II, RIMCO Partners
L.P. III, and RIMCO Partners, L.P. IV, Ben M. Brigham, Anne L.
Brigham, Harold D. Carter, Craig M. Fleming, David T. Brigham and Jon
L. Glass (filed as Exhibit 10.29 to the Company's Registration
Statement on Form S-1 (Registration No. 333-22491), and incorporated
herein by reference).
5.1* Opinion of Thompson & Knight, P.C.
23.1* Consent of counsel (included in the opinion of Thompson & Knight, P.C.
filed herewith as Exhibit 5.1).
23.2* Consent of independent accountants.
23.3** Consent of independent petroleum engineers.
24** Power of Attorney.
</TABLE>
- --------------------
* Filed herewith.
** Previously filed.
<PAGE> 1
EXHIBIT 5.1
(214) 969-1700
September 20, 1999
Brigham Exploration Company
6300 Bridge Point Parkway
Building 2, Suite 500
Austin, Texas 87730
Re: BRIGHAM EXPLORATION COMPANY; FORM S-3 REGISTRATION STATEMENT
Gentlemen:
We have acted as counsel for Brigham Exploration Company (the
"Company"), in connection with the preparation of its Registration Statement on
Form S-3, as amended (the "Registration Statement"), filed with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), covering the proposed sale of up to 2,966,044
shares (the "Shares") of Common Stock, par value $.01 per share, of the Company
by the selling stockholders named therein (the "selling stockholders"). The
Shares are proposed to be sold by the selling stockholders in the manner set
forth in the prospectus constituting Part I of the Registration Statement under
the caption "Plan of Distribution."
In connection with the foregoing, we have examined the originals or
copies, certified or otherwise authenticated to our satisfaction, of such
corporate records of the Company, certificates of public officials and other
instruments and documents as we have deemed necessary to require as a basis for
the opinion hereinafter expressed. As to questions of fact material to such
opinion, we have, where relevant facts are not independently established, relied
upon statements of officers of the Company.
On the basis of the foregoing and in reliance thereon, we advise you
that in our opinion the Shares to be sold by the selling stockholders pursuant
to the Registration Statement have been duly and validly authorized by the
Company and, when sold by the selling stockholders as described in the
Registration Statement, will be legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 of the Registration Statement and to the reference to us in the
prospectus under the caption "Legal Matters." In giving this consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act or the rules or regulations of
the Commission thereunder.
Respectfully submitted,
THOMPSON & KNIGHT L.L.P.
By: /s/ Joe Dannenmaier
---------------------------------
Joe Dannenmaier, Attorney
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Amendment
No. 1 to Registration Statement on Form S-3 of our report dated March 30, 1999
relating to the financial statements of Brigham Exploration Company and our
report dated April 14, 1999 relating to the financial statements of Brigham Oil
& Gas, L.P., Brigham, Inc., Brigham Holdings I, LLC and Brigham Holdings II,
LLC, both of which appear in Brigham Exploration Company's Annual Report on Form
10-K, as amended by Amendment No. 1 to Form 10-K, for the year ended December
31, 1998. We also consent to the reference to us under the heading "Experts" in
such Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
Dallas, Texas
September 20, 1999
