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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 21, 2000
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PETSEC ENERGY INC.
(Exact name of registrant as specified in its charter)
NEVADA 333-31625* 84-1157209
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification No.)
143 RIDGEWAY DRIVE, SUITE 113
LAFAYETTE, LOUISIANA 70503
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (337) 989-1942
*Petsec Energy Inc. is a wholly owned operating subsidiary of Petsec Energy
Ltd, a listed Australian public company registered with the Commission as a
result of its public offering of American Depositary Receipts ("ADRs") traded
on the OTC Bulletin Board (symbol: PSJEY). Shareholders and holders of American
Depositary Shares are advised to refer to the filings of Petsec Energy Ltd for
the consolidated results.
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Forward Looking Statements
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This Form 8-K Current Report includes "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 (the "Exchange Act"). All
statements other than statements of historical facts included in this Form 8-K
Current Report, including without limitation statements regarding the projected
cash flows, planned capital expenditures, oil and gas production and reserve
estimates and analyses, Petsec Energy Inc.'s (the "Company") financial
position, business strategy and other plans and objectives for future
operations, are forward-looking statements. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable,
it can give no assurance that such expectations will prove to have been
correct. There are numerous risks and uncertainties that can affect the outcome
of certain events including many factors beyond the control of the Company
including without limitation those described in the Company's latest Annual
Report filed on Form 10-K with the Securities and Exchange Commission for the
year ended December 31, 1999. All written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by such factors.
Item 2. Other Events.
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On December 4, 2000, the Company completed the sale of all of its
interest (being a 50% ownership interest) in certain of its oil and gas
properties to Apache Corporation ("Apache"). The sale price negotiated with
Apache and received by the Company was $51.2 million. The effective date of the
transaction was October 1, 2000.
All of the Company's mineral interests together with all of its
interest in related facilities and equipment were sold in the following 22
mineral leases: OCS-G 16461 covering all of Grand Isle Block 45; OCS-G 19853
covering all of Main Pass Block 90; OCS-G 19854 covering a portion of Main
Pass Block 91; OCS-G 14576 covering a portion of Main Pass Block 91; OCS-G
19855 covering a portion of Main Pass Block 93; OCS-G13960 covering all of
Main Pass Block 104; OCS-G 19857 covering all of Main Pass Block 105; OCS-G
16390 covering all of Ship Shoal Block 192; OCS-G 13917 covering all of Ship
Shoal Block 193; OCS-G 15288 covering all of Ship Shoal Block 194; OCS-G 13896
covering all of South Marsh Island Block 7; OCS-G 2833 covering all of West
Cameron Block 237; OCS-G 12802 covering all of West Cameron Block 543;
OCS-G14342 covering all of West Cameron Block 544; OCS-G 17827 covering all of
West Cameron Block 653; State of Louisiana Lease 13580 covering a portion of
Main Pass Block 6; State of Louisiana Lease 13890 covering a portion of Main
Pass Block 5; State of Louisiana Lease 13891 covering a portion of Main Pass
Block 6; State of Louisiana Lease 13892 covering a portion of Main Pass Block
7; State of Louisiana Lease 3771 covering a portion of Main Pass Block 6;
State of Louisiana Lease 3773 covering a portion of Main Pass Block 7; and
State of Louisiana Lease 14680 covering a portion of Main Pass Block 84.
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Item 3. Bankruptcy.
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On November 21, 2000, the United States Bankruptcy Court for the
Western District of Louisiana, Opelousas Division, (the "Bankruptcy Court")
issued an order confirming Petsec Energy Inc.'s First Amended Plan of
Reorganization (the "Plan") in In Re Petsec Energy Inc., Case No. 00BK50741
(the "Bankruptcy Case"). The Plan provides for the sale of substantially all of
the Company's assets and all of the Company's proved hydrocarbon reserves in
six distinct transactions. Five asset sale transactions were consummated
between November 27, 2000 and December 4, 2000 with four different purchasers:
Apache, ATP Oil & Gas Corporation, Stone Energy Corporation, California
Hydrocarbons Corporation. The aggregate consideration received by the Company
from these sales is $56.9 million. In addition, the Company's parent, Petsec
(U.S.A.) Inc. ("PUSA") will retain ownership of certain of the Company's
assets.
PUSA has agreed to purchase from the Company five exploration leases,
the Company's seismic database and all of the Company's furniture, fixtures and
equipment except for its oil field equipment. This acquisition will be effected
through asset sale transactions for the leases and by PUSA's retention of all
of the Company's outstanding common stock (being one share of common stock) by
which PUSA will retain ownership of the Company's seismic database and
furniture, fixtures and equipment. The consideration to be received by the
Company from these transactions is $3,034,000, and the sale proceeds will be
included in the funds available to pay the allowed claims of the Company's
administrative claimholders and unsecured creditors in the Bankruptcy Case.
The Company expects to close the lease sales with PUSA on or before December
15, 2000 for consideration in the amount of $2,884,000, and PUSA will make a
$150,000 payment on the date that the Plan becomes effective for the retention
of ownership of the Company's common stock.
The oilfield equipment is expected to be sold in an auction that will
be conducted by NetWork Oil, Inc. in Houston, Texas on December 6, 2000. The
sale proceeds will be used to pay the allowed administrative and unsecured
claims in the Bankruptcy Case.
On the effective date of the Plan, all of the Company's cash assets and
causes of action will be transferred to a liquidating trust (the "Liquidating
Trust") for the benefit of the Company's creditors. The Liquidating Trust will
distribute the cash proceeds (including any proceeds obtained on account of the
causes of action) to the Company's administrative and unsecured creditors,
subject to a carve-out in favor of PUSA and the Company's senior management.
The carve-out will be payable out of the amounts otherwise available for
distribution to the holders of the Company's 9 1/2% senior subordinated notes
(the "Noteholders"). In the Disclosure Statement filed by the Company in the
Bankruptcy Case and approved by the Bankruptcy Court, the Company estimated a
cash distribution to unsecured creditors equal to 60% to 65% of allowed
unsecured claims, subject to the carve-out from distributions to the
Noteholders. While the Company believes that this estimate continues to be
reasonable, there can be no assurance that, after all of the administrative and
priority claims owed by the Company are paid by the Liquidating Trust,
distributions made on account of allowed unsecured claims will be in this
range. No equity or debt securities of the Company will be issued to the
Liquidating Trust or to the Company's creditors on account of their allowed
claims.
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The trustee of the Liquidating Trust is John J. Caliolo, 2068 Lansing
Place, Muttontown, NY 11791. He was appointed upon the recommendation of the
Official Committee of Unsecured Creditors (the "Creditors' Committee") in the
Bankruptcy Case. The Liquidating Trust will be administered by the Plan
Administration Committee, which is comprised of Fidelity Management & Research
Co., Evergreen Investment Management Company and Sun America Investments, Inc.
The only condition remaining to be satisfied prior to the Plan
becoming effective is that "final settlement" with each of the five purchasers
of the Company's assets must occur. The Company expects that this will take
place within the next 60 days, although there can be no assurance that this
will occur within this time period. The Company, with the consent of the
Creditor's Committee, can waive this condition, in which the Plan can become
effective immediately. The initial distribution to the Company's creditors can
be made by the Liquidating Trust on the forty-fifth day following the date on
which the Plan becomes effective, with subsequent distributions thereafter on
December 31, March 31, June 30 and September 30 of each year.
The Company's unaudited balance sheet, as of October 31, 2000, is as
follows:
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Petsec Energy Inc.
(Debtor-in-Possession as of April 13, 2000)
a wholly-owned subsidiary of Petsec Energy Ltd
Unaudited Balance Sheet
(Dollars in thousands, except share amounts)
<TABLE>
<CAPTION>
October 31,
2000
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<S> <C>
ASSETS
Current Assets
Cash $ 20,204
Accounts receivable 6,538
Other receivables 37
Inventories of crude oil 45
Prepaid expenses 1,898
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Total Current Assets 28,723
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Property, plant and equipment - at cost under the successful
efforts method of accounting for oil and gas properties
Proved oil and gas properties 163,065
Unproved oil and gas properties 6,499
Production facilities 45,934
Other 30
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215,527
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Less accumulated depletion, depreciation and amortization (154,037)
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Net property, plant and equipment 61,490
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Other Assets 3,697
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Total Assets $ 93,909
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LIABILITIES
Post-Petition Liabilities
Taxes payable 9
Trade accounts payable 2,457
Other accounts payable 3,836
Secured debt 3
Accrued royalties and joint venture expenditures 2,759
Provision for Rehabilitation 3,257
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Total Post Petition Liabilities 12,321
Senior Subordinated notes
Bank credit facility
Pre-Petition Liabilities
Secured debt 110
Priority claims 48
Non-Priority claims 1,985
Unsecured debt 146,503
Trade accounts payable 401
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Total Pre- Petition Liabilities 149,047
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Total Liabilities 161,367
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Shareholder's Deficit:
Common stock, $1 par value; authorized 1,000,000 shares;
issued and outstanding 1 share
Additional paid-in-capital 21,931
Accumulated deficit: Filing date (95,920)
Retained earnings (accumulated deficit): Post filing date 6,531
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Total Shareholder's Deficit (67,458)
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Total Liabilities and Shareholder's Deficit $ 93,909
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</TABLE>
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The Company's Plan is attached hereto as Exhibit 2.2. The Bankruptcy
Court's order confirming the Plan is attached hereto as Exhibit 2.3.
Item 7. Financial Statements and Exhibits.
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(b) Exhibits.
2.2 First Amended Plan of Reorganization for Petsec Energy Inc.
dated October 13, 2000.
2.3 Order Confirming First Amended Plan of Reorganization for
Petsec Energy Inc., as Modified, entered by the Honorable
Gerald H. Schiff, United States Bankruptcy Judge for the
United States Bankruptcy Court for the Western District of
Louisiana, Opelousas Division, dated November 21, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PETSEC ENERGY INC.
Date: December 5, 2000 By: /s/ ROSS A. KEOGH
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Name: Ross A. Keogh
Title: Vice-President--Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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2.2 First Amended Plan of Reorganization for Petsec Energy Inc.
dated October 13, 2000.
2.3 Order Confirming First Amended Plan of Reorganization for
Petsec Energy Inc., as Modified, entered by the Honorable
Gerald H. Schiff, United States Bankruptcy Judge for the
United States Bankruptcy Court for the Western District of
Louisiana, Opelousas Division, dated November 21, 2000.
