As filed with the Securities and Exchange Commission on May 31, 2000
Registration No. 333-37558
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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.)
Ben M. Brigham
President, Chief Executive Officer
6300 Bridge Point Parkway and Chairman of the Board
Building 2, Suite 500 Brigham Exploration Company
Austin, Texas 78730 6300 Bridge Point Parkway
(512) 427-3300 Building 2, Suite 500
(Address, including zip code, and Austin, Texas 78730
telephone number, including area code, (512) 427-3300
of registrant's principal executive offices) (Name, address, including zip code,
and telephone number, including
area code, of agent for service)
-------------
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)
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. [ ]
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================ =============== ==================== ==================== =================
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED (1) OFFERING PRICE OFFERING PRICE REGISTRATION
REGISTERED PER SHARE (2) (2)(3) FEE(3)
---------------------------- --------------- -------------------- -------------------- -----------------
<S> <C> <C> <C> <C>
COMMON STOCK, $.01
PAR VALUE PER SHARE..... 3,678,648 $2.69 $9,798,002 $2,587
---------------------------- --------------- -------------------- -------------------- -----------------
</TABLE>
(1) Includes (a) 2,272,144 shares of common stock outstanding and (b) 1,406,504
shares of common stock issuable to certain selling stockholders upon the
exercise of stock purchase warrants. In addition to the shares set forth in
the table, the amounts to be registered includes an indeterminate number of
shares issuable upon exercise of such stock purchase warrants, as such
number may be adjusted as a result of stock splits, stock dividends and
antidilution provisions in accordance with Rule 416.
(2) With respect to the 1,626,016 shares included in the initial filing of this
Registration Statement and pursuant to Rule 457(a), the proposed offering
price of $2.63 per share indicated in that filing is used. With respect to
the additional 2,052,632 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 May 24, 2000.
(3) Pursuant to Rule 429 under the Securities Act of 1933, the prospectus
included in this Registration Statement is a combined prospectus and also
relates to 2,966,044 shares of Common Stock registered pursuant to
Registration Statement No. 333-85435 previously filed with the Commission by
the Registrant and declared effective and as to which a registration fee of
$2,017 was paid. In addition, $1,129 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.
================================================================================
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 31, 2000
PROSPECTUS
[LOGO]
6,644,692 SHARES
BRIGHAM EXPLORATION COMPANY
6300 Bridge Point Parkway
Building 2, Suite 500
Austin, Texas 78730
(512) 427-3300
COMMON STOCK
---------------------
This prospectus covers the offer and sale by certain stockholders of
Brigham Exploration Company of up to 6,644,692 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 stockholders obtained their shares of
Brigham common stock and warrants to purchase common stock in private placements
by Brigham Exploration Company in August 1998, March 1999 and February 2000,
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 May 24, 2000, the last reported sale price of Brigham common stock on the
Nasdaq was $2.69 per share.
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 2 OF
THIS PROSPECTUS BEFORE PURCHASING ANY SHARES OF BRIGHAM COMMON STOCK.
--------------------
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.
--------------------
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 ______________, 2000.
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.
<PAGE>
TABLE OF CONTENTS
PAGE
About This Prospectus........................................................1
Where You Can Find More Information..........................................1
Brigham......................................................................2
Risk Factors.................................................................2
Forward Looking Statements...................................................8
Selling Stockholders.........................................................9
Plan of Distribution........................................................12
Use of Proceeds.............................................................13
Description of Capital Stock................................................13
Experts.....................................................................14
<PAGE>
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 for the year ended December 31, 1999.
o Quarterly Report on Form 10-Q for the three months ended March 31, 2000.
o Current Report on Form 8-K filed February 29, 2000 (date of event February
17, 2000).
o Current Report on Form 8-K filed March 9, 2000 (date of event February 24,
2000).
o Proxy Statement filed on April 20, 2000.
o Current Report on Form 8-K filed April 24, 2000 (date of event April 17,
2000).
o Current Report on Form 8-K filed May 26, 2000 (date of event May 11, 2000).
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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<PAGE>
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 Texas Gulf Coast 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, 1999, we
have acquired 5,122 square miles of 3-D seismic data and have identified an
estimated 1,050 potential drilling locations, of which we have drilled 469. 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
The principal amount of our outstanding long-term debt was $101.5
million as of December 31, 1999. The indenture governing our senior subordinated
secured notes limits the amounts of additional debt borrowings, including
borrowings under our senior credit facility or other senior indebtedness.
However, the indenture permits us to borrow under our senior credit facility up
to the lesser of $75 million or the loan commitments under the facility, which
were $70 million as of May 31, 2000. We had $62 million of borrowings
outstanding under our senior credit facility as of May 31, 2000.
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 senior 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 and dilute the
equity interests of existing stockholders. 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. While we believe that our cash flow
from operations and borrowings under our credit facility should allow us to
finance our planned operations through 2000 based on current conditions and
expectations, additional financing will be required in the future to fund our
exploration and development activities. 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
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<PAGE>
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 1999, the high and low prices for oil on the NYMEX were $27.07
per Bbl and $11.37 per Bbl, and the high and low prices for natural gas on the
NYMEX were $3.09 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, operating income and cash flow; 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 and collar hedging arrangements that generally result in a fixed price
or a range of minimum and maximum price limits over a specified monthly time
period. 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 and marketing costs to delivery points, substantial
differences between the hedged prices and actual results could harm 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.
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<PAGE>
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 covered, by insurance, it could
harm our financial condition and results of operations. In addition, we cannot
fully insure against pollution and environmental risks.
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<PAGE>
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 March
31, 2000, we had an accumulated deficit of $57.2 million and total stockholders'
equity of $11.3 million. We have recognized the following net losses since 1995:
$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 $25.9 million non-cash writedown in the carrying value of our
natural gas and oil properties) in 1998, $21.6 million (including a $12.2
million non-cash loss on the sale of natural gas and oil properties) in 1999,
and $2.2 million in the three months ended March 31, 2000.
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 future
exploration and
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<PAGE>
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 from our oil and natural gas properties
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
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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.
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
and to develop oil and natural gas. We depend upon the knowledge, skills and
experience of these experts to provide 3-D imaging and to assist us in reducing
the risks associated with our participation in oil and natural gas exploration
and development 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 May 31, 2000, our directors, executive officers and principal
stockholders, and certain of their affiliates, beneficially owned approximately
52% 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.
FUTURE SALES OF OUR COMMON STOCK COULD CAUSE OUR STOCK PRICE TO DECLINE
As of May 31, 2000, we had a total of 16,712,908 shares of common stock
outstanding. We have registered for resale an aggregate of 6,644,692 shares of
our common stock, including 1,406,504 shares issuable upon the exercise of
currently exercisable warrants. Except for 975,610 shares that we privately
placed in February 2000 but have not registered for resale, all of our
outstanding shares are available for sale to the public, subject in some cases
to volume limitations.
As of May 31, 2000, we had outstanding options entitling their holders
to acquire an aggregate of 1,825,071 shares of our common stock, of which
options covering 348,848 shares were currently exercisable. As of May 31, 2000,
we had outstanding warrants entitling their holders to acquire an aggregate of
6,129,143 shares of our common stock, all of which were currently exercisable.
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The market price of our common stock could drop due to sales of a large
number of shares of our common stock by the selling stockholders or otherwise or
the perception that these sales could occur. These factors could also make it
more difficult to raise funds through future offerings of common stock.
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.
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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 May 31,
2000, the percentage of our outstanding common stock owned by each such selling
stockholder as of May 31, 2000, 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, other than pursuant
to the exercise of warrants relating to shares covered by this prospectus.
<TABLE>
<CAPTION>
-------------------------------------- ------------------------ ---------------- -----------------------
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING AFTER OFFERING
-------------------------- -------------------------
NUMBER OF
SHARES
NUMBER OF BEING NUMBER OF
SELLING STOCKHOLDERS SHARES PERCENT (1) OFFERED SHARES PERCENT (1)
----------------------------------- ------------ ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Veritas DGC Land, Inc. 1,211,580 7.25% 1,211,580 -- --
RIMCO Partners, L.P. II (2) 612,308 3.66% 612,308 -- --
RIMCO Partners, L.P. III (2) 307,031 1.84% 307,031 -- --
RIMCO Partners, L.P. IV (2) 835,125 5.00% 835,125 -- --
Special Situations Private Equity 975,609 5.75% 975,609 -- --
Fund, L.P.(3)
Aspect Resources, LLC (4) 650,407 3.85% 650,407 -- --
ECT Merchant Investments Corp. (5) 513,158 3.03% 513,158 -- --
Joint Energy Development Investments
II Limited Partnership (5) 1,539,474 8.82% 1,539,474 -- --
---------- ------- ----------- -------- -------
Total....................... 6,644,692 36.67% 6,644,692 -- --
========== ======= =========== ======== =======
</TABLE>
-------------------------
(1) Based on 16,712,908 shares of Brigham common stock issued and
outstanding as of May 31, 2000.
(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 May 31, 2000, 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 10.50% of our
outstanding common stock as of May 31, 2000. The general partner of
RIMCO is RIMCO Associates, Inc.
(3) The shares of Brigham common stock beneficially owned by Special
Situations Private Equity Fund, L.P. ("Special Situations") as of May
31, 2000, and covered by this prospectus consist of 731,707 outstanding
shares of Brigham common stock and 243,902 shares issuable upon the
exercise of currently exercisable warrants.
(4) The shares of common stock beneficially owned by Aspect Resources, LLC
("Aspect") as of May 31, 2000, and covered by this prospectus consist of
487,805 outstanding shares of Brigham common stock and 162,602 shares
issuable upon the exercise of currently exercisable warrants.
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(5) Enron North America Corp. ("Enron N.A.") may be deemed beneficially to
own 2,052,632 shares as a result of the holdings of ECT Merchant
Investments Corp. ("ECT Investments") and Joint Energy Development
Investments II Limited Partnership ("JEDI II"). The shares of Brigham
common stock beneficially owned by Enron N.A. represented 10.94% of our
outstanding common stock as of May 31, 2000. ECT Investments holds
263,158 shares and currently exercisable warrants to purchase 250,000
shares, and JEDI II holds 789,474 shares and currently exercisable
warrants to purchase 750,000 shares. All of such outstanding shares and
shares underlying warrants are covered by this prospectus. ECT
Investments is a wholly-owned subsidiary of Enron N.A. Because a
subsidiary of Enron N.A. is the general partner of Enron Capital
Management II Limited Partnership, which is in turn the general partner
of JEDI II, Enron N.A. may be deemed to be the beneficial owner of the
shares owned by JEDI II, although Enron N.A. disclaims beneficial
ownership of these shares. Enron N.A. is a wholly-owned subsidiary of
Enron Corp. ("Enron"); Enron disclaims beneficial ownership of any
shares beneficially owned by either Enron N.A. or JEDI II.
VERITAS DGC LAND, INC.
In the past, we have entered into certain industry alliances with
Veritas DGC Land, 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 have
registered the shares pursuant to a registration rights agreement entered into
at the same time. Pursuant to the Exchange Agreement, we issued 1,211,580 shares
of our common stock valued at $3.50 per share to Veritas during 1999 in
satisfaction of payment obligations due to Veritas for certain seismic
acquisition and processing services.
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 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 have registered 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 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. We billed approximately $50,000 in 1997, $23,000 in 1998 and $30,000
in 1999 to 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.
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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 interpreted 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 or 1999 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 1997, we recognized interest expense payable to the RIMCO-affiliated
selling stockholders of approximately $170,000 on the 5% Notes that were
exchanged in 1997 for Brigham common stock. Of this obligation, $50,000
recognized in 1997 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. We distributed to RIMCO $48,150 in 1997, $25,934 in
1998 and $10,219 in 1999 for RIMCO's 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.
SPECIAL SITUATIONS AND ASPECT
Special Situations and Aspect obtained their shares of Brigham common
stock and warrants in a private placement pursuant to a Securities Purchase and
Registration Rights Agreement dated as of February 22, 2000, by and between
Brigham Exploration Company, Special Situations, Aspect and GAP Coinvestment
Partners II, L.P. ("GAP Coinvestment") (the "Purchase Agreement"). Pursuant to
the Purchase Agreement, for an aggregate purchase price of $4,512,805 million we
issued (1) 2,195,122 shares of our common stock (975,610 to GAP Coinvestment,
731,707 to Special Situations and 487,805 to Aspect, priced at $2.05 per share,
and (2) warrants to purchase 731,707 shares of our common stock (325,203 to GAP
Coinvestment, 243,902 to Special Situations and 162,602 to Aspect) at an
exercise price of $2.5625 per share with a three-year term. Pricing of this
private equity placement was based on the average market price of our common
stock during a twenty trading day period prior to issuance. We have registered
those shares and shares underlying warrants issued pursuant to the Purchase
Agreement that were issued to Special Situations and Aspect, but GAP
Coinvestment has waived its registration rights in connection with this
prospectus.
On February 10, 1999, Brigham and Aspect entered into a Joint
Development Agreement, under which Aspect has agreed to pay for 100% of certain
land acquisition costs we incur within one of our South Texas projects prior to
February 10, 2001. In return for funding 100% of such costs, Aspect will be
initially assigned 25% of the oil and gas leasehold interests and 50% of the
mineral or royalty interests which we acquire with such funds. We have an
election to reimburse Aspect for 75% of the costs we funded for the oil and gas
leasehold interests within the time period specified in the Joint Development
Agreement; however, in the event that we do not elect to reimburse Aspect for
75% of such costs, we must subsequently assign to Aspect an additional 25%
interest in the leasehold interests acquired. We do not have the option to
reimburse Aspect for 75% of the costs incurred to acquire mineral or royalty
interests, as opposed to leasehold interests. Alexis M. Cranberg, a Brigham
director and member of the Audit and Compensation Committees, is President of
Aspect. In October 1999, we entered into an Acquisition and Participation
Agreement with Aspect under which Aspect secured anywhere from a 20% undivided
interest to a 50% undivided interest in four of our South Texas prospects.
ECT and JEDI II
In August 1998, we issued $50 million of debt and equity securities to
two affiliates of Enron, Enron N.A. and JEDI II, pursuant to a securities
purchase agreement (the "Enron Purchase Agreement") among Brigham, Enron N.A.
and JEDI II. Securities issued by us in connection with this financing
transaction included: (i) $40 million of Senior Subordinated Secured Notes due
2003 (the "Subordinated Notes"), (ii) warrants to purchase 1,000,000 shares of
our common stock at a price of $10.45 per share (the "Subordinated Note
Warrants") and (iii) 1,052,632 shares of our common stock at a price of $9.50
per share. In 1998, we paid Enron affiliates $1.2 million in interest payments
on the Subordinated Notes. In connection with the closing of the Enron Purchase
Agreement, we paid an aggregate of $2.1 million in fees to JEDI II and ECT
Securities Corp., an Enron affiliate. We also entered into a registration rights
agreement with Enron N.A. and JEDI II, granting them certain demand registration
rights for two registrations with respect to the shares of our common stock
(including shares issuable upon the exercise of the Subordinated Note Warrants)
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and the Subordinated Note Warrants, as well as certain "piggyback" registration
rights. The Enron Purchase Agreement also granted Enron N.A. or its designated
affiliate certain rights to designate one member of our Board of Directors for
so long as Enron N.A. and/or JEDI II own 5% or more of our outstanding common
stock. According to an amendment dated January 12, 1999 to a Schedule 13D of the
applicable Enron entities, Enron N.A. contributed its shares of common stock of
Brigham, its Subordinated Note Warrants and its rights under the Enron Purchase
Agreement and the registration rights agreement to ECT Investments on December
31, 1998. In March, 1999, we and the trustee under the indenture governing the
Subordinated Notes entered into an amendment to the indenture. This amendment
provided us with the option to pay interest due on the Subordinated Notes in
kind, for any reason, through the second quarter of 2000. In addition, certain
financial and other covenants were amended. The Subordinated Note Warrants were
also amended to provide for a reduction in the exercise price per share of the
Subordinated Note Warrants from $10.45 per share to $3.50 per share. W. Craig
Childers, a former Brigham director who was appointed to the Board of Directors
pursuant to the Enron Purchase Agreement, was a Managing Director of Enron N.A.
in 1998 and 1999. On February 17, 2000, we entered into a second amendment to
the terms of the indenture. In this amendment, the holders of the Subordinated
Notes agreed to waive the minimum consolidated interest coverage ratio covenant
through June 30, 2000 and to adjust subsequent levels under this test. In
addition, the amendment to the Subordinated Notes provides us with an extension
of its right to pay interest through issuance of additional Subordinated Notes
in lieu of cash (or "in-kind") through the third quarter of 2000 and potentially
through the fourth quarter of 2000 if certain conditions are met. In exchange
for granting these amendments, we agreed to (i) reset the price of the
Subordinated Note Warrants from an exercise price of $3.50 per share to $2.43
per share, and (ii) grant to holders of the Subordinated Notes a term overriding
royalty interest that provides for the limited right to receive 4%,or 3% if
certain conditions are met, of our net production revenue to reduce any
outstanding Subordinated Notes issued as interest paid in-kind. We have
registered ECT's and JEDI II's shares, and the shares issuable upon the exercise
of JEDI II's warrants, pursuant to the exercise of their "piggyback"
registration rights granted in the registration rights agreement referred to
above.
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.
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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.
Under our registration rights agreements with the selling stockholders,
we are required to bear the expenses relating to this offering, excluding:
o any underwriting discounts, commissions or cost reimbursement;
o costs of separate counsel for selling stockholders other than
Veritas DGC Land, Inc.; and
o certain other costs relating to the registration of Special
Situations', GAP Co.'s and Aspect's shares.
We will receive no part of the proceeds from sales of the common stock.
This offering by any selling stockholder will terminate on the date specified in
the selling stockholder's registration rights agreement with us or, if earlier,
on the date on which the selling stockholder has sold all of its shares.
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.
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. We will, however, receive the exercise price of various
selling stockholders' warrants at the time of exercise.
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 written consent, in lieu of a
shareholder's meeting. 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.
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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
-- 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.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K of Brigham Exploration Company for the year ended
December 31, 1999, 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, 1999, and is made in reliance upon
the authority of such firm as experts with respect to such matters.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Except for the SEC registration fee, all of the following expenses are
estimated. All such expenses will be paid by the Registrant.
SEC registration fee...........................................$ 2,587
Nasdaq listing fee.............................................$ 16,260
Legal fees and expenses........................................$ 3,000
Printing and engraving expense.................................$ 1,000
Miscellaneous..................................................$ 653
--------
Total...................................................$ 23,500
========
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.
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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.
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.
(C) 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
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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 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.
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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 May 31, 2000.
BRIGHAM EXPLORATION COMPANY
(Registrant)
By: /s/ Ben M. Brigham
---------------------------------------
Ben M. Brigham
Chief Executive Officer and President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Ben
M. Brigham and David T. Brigham, and each of them (with full power to each of
them to act alone), his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities to sign on his behalf individually and in each
capacity stated below any amendment, including post-effective amendments, to
this Registration Statement under the Securities Act of 1933, as amended, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
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.
Signature Title Date
--------- ----- ----
/s/ Ben M. Brigham President, Chief Executive May 31, 2000
----------------------------- Officer and Chairman of the
Ben M. Brigham Board (principal executive
officer)
/s/ Curtis F. Harrell Chief Financial Officer and May 31, 2000
----------------------------- Director (principal financial
Curtis F. Harrell and accounting officer)
/s/ Anne L. Brigham Director May 31, 2000
-----------------------------
Anne L. Brigham
/s/ Harold D. Carter Director May 31, 2000
-----------------------------
Harold D. Carter
/s/ Alexis M. Cranberg Director May 31, 2000
-----------------------------
Alexis M. Cranberg
/s/ Stephen P. Reynolds Director May 31, 2000
-----------------------------
Stephen P. Reynolds
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<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ------------------------------------------------------------------------
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).
3.1.1* Certificates of Amendment to Certificate of Incorporation.
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 Securities Purchase and Registration Rights Agreement dated as of
February 22, 2000 by and between Brigham Exploration Company, Special
Situations Private Equity Fund, L.P., GAP Coinvestment Partners II, L.P.
and Aspect Resources L.L.C. (filed as Exhibit 10.15 to Brigham's Current
Report on Form 8-K filed February 29, 2000 (date of event February 17,
2000), and incorporated herein by reference).
4.3 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).
4.4 Registration Rights Agreement dated as of August 20, 1998, among the
Brigham Exploration Company, a Delaware corporation (the "Company"),
Joint Energy Development Investments II Limited Partnership, a Delaware
limited partnership ("JEDI-II") and Enron Capital & Trade Resources
Corp., a Delaware corporation, as amended by Amendment to Registration
Rights Agreement dated as of March 26, 1999, among the Company, JEDI-II
and ECT Merchant Investments Corp. (filed as Exhibit 10.39 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1998, and as Exhibit 10.39.1 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1998, and incorporated herein by
reference).
5.1* Opinion of Thompson & Knight, L.L.P.
23.1* Consent of counsel (included in the opinion of Thompson & Knight, L.L.P.
filed herewith as Exhibit 5.1).
23.2* Consent of independent accountants.
23.3* Consent of independent petroleum engineers.
24* Power of Attorney (a power of attorney pursuant to which amendments to
this Registration Statement may be filed is included on the signature
page hereof).
--------------------
* Filed herewith.
