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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 27, 1999
MICHAEL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Texas 333-52263* 76-0510239
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
13101 Northwest Freeway, Suite 320 77040
Houston, Texas
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(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (713) 895-0909
* The Commission File Number refers to a Form S-4 Registration Statement
filed by the Registrant under the Securities Act of 1933 which was declared
effective on July 22, 1998.
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Item 5. Other Events
On August 27, 1999, Michael Petroleum Corporation (the "Company") reported
that the Company's total proved natural gas and oil reserves as of June 30,
1999 consisted of 191.7 Bcf of natural gas and 1.49 MMBbls of oil (200.7
Bcfe), having an aggregate estimated PV-10 value of $184.7 million. The
natural gas and oil reserves were comprised of proved developed reserves of
66.0 Bcf of natural gas and 475 MBbls of oil (68.9 Bcfe), and proved
undeveloped reserves of 125.7 Bcf of natural gas and 1.012 MMBbls of oil
(131.8 Bcfe). The PV-10 value of the June 30, 1999 natural gas reserves were
computed using NYMEX strip pricing less an appropriate transportation and
marketing adjustment as of August 16, 1999, wherein the average natural gas
price for the six months ending December 31, 1999 was $2.693 per MMBtu. The
assumed natural gas prices for the years ending December 31, 2000 and 2001,
were $2.561 and $2.511 per MMBtu, respectively. The assumed natural gas price
for the eight months ending August 31, 2002 was $2.516 per MMBtu. For periods
after August 2002 the assumed natural gas price was escalated 3% per year to
a maximum of $4.00 per MMBtu. Oil price assumptions were also based on the
NYMEX strip as of August 16, 1999, with the average oil prices ranging from
$14.72 per Bbl in July 1999 to $17.88 per Bbl in July 2002, net of basis
differentials. After August 2002, the price of oil was also escalated 3% per
year to a maximum of $40 per Bbl. Lease and well operating and capital costs
were also escalated 3% per year after January 1, 2000. Because actual natural
gas prices were not utilized and prices and costs were escalated and not held
constant, the calculations of PV-10 value of proved reserves were not
prepared in accordance with all of the requirements of applicable Securities
and Exchange Commission rules and regulations.
This Form 8-K contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. The
estimation of reserves requires substantial judgment on the part of petroleum
engineers, resulting in imprecise determinations. Estimates of economically
recoverable oil and natural gas reserves and of future net revenues
necessarily depend on a number of variable factors and assumptions. There can
be no assurance that the prices utilized in the reserve estimates will be
realized over the period of production, that the estimated production volumes
will be produced or that the proved undeveloped reserves will be developed
during the period specified in the reserve estimates. The estimated reserves
and future net revenues may be subject to material revision based upon
production history, results of
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future development, prevailing oil and natural gas prices and other factors.
The PV-10 value of the Company's proved reserves mentioned above does not
necessarily represent the current or fair market value of those proved
reserves or the fair market value of the Company's proved oil and natural gas
properties. Actual results may differ materially from the results estimated.
SIGNATURE
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.
MICHAEL PETROLEUM CORPORATION
By:/s/ ROBERT L. SWANSON
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Robert L. Swanson
Vice President -- Finance
Dated: August 27, 1999
