Rule 424 (b)(3)
Registration Number 333-46255
PROSPECTUS
100,000 SHARES
DOUBLE EAGLE PETROLEUM AND MINING CO.
COMMON STOCK
($.10 Par Value)
This Prospectus relates to the transfer of 100,000 shares (the "Shares") of
the $.10 par value common stock (the "Common Stock") of Double Eagle Petroleum
And Mining Co. (the "Company") by a certain shareholder (the "Selling
Shareholder") that may acquire restricted shares of the Company's Common Stock
upon the exercise of options held by the Selling Shareholder in transactions
exempt from registration pursuant to federal and state securities laws. See
"OFFERING BY SELLING SHAREHOLDER". The Shares offered through this Prospectus
may be sold from time to time by the Selling Shareholder. The Company will
receive no proceeds from the sales of the Shares by the Selling Shareholder. No
underwriting arrangements have been entered into by the Selling Shareholder. The
distribution of the Shares by the Selling Shareholder may be offered in one or
more transactions that may take place in the over-the-counter market, including
ordinary brokers' transactions, privately negotiated transactions or through
sales to one or more dealers for resale of such Shares as principals, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, or at negotiated prices. Usual and customary or specifically
negotiated brokerage fees or commissions may be paid by the Selling Shareholder
in connection with sales of the Shares by the Selling Shareholder. See
"OFFERING BY SELLING SHAREHOLDER".
The Company's Common Stock trades in the over-the-counter market and is
listed on the Nasdaq SmallCap Stock Market ("Nasdaq") under the symbol "DBLE".
On February 24, 1998, the closing bid price of the Common Stock as quoted on
Nasdaq was $2.00 per share.
SEE "RISK FACTORS" FOR CERTAIN CONSIDERATIONS RELEVANT TO AN INVESTMENT IN
THE COMMON STOCK OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The expenses of the offering described in this Prospectus, which are
payable by the Company, are estimated to be approximately $4,000.
The date of this Prospectus is February 24, 1998.
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AVAILABLE INFORMATION
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein referred to, together with all amendments, as the "Registration
Statement") filed by the Company with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Securities
Act"). This Prospectus does not contain all the information set forth in the
Registration Statement and exhibits thereto, and statements included in this
Prospectus as to the content of any contract or other document referred to are
not necessarily complete. For further information, reference is made to the
Registration Statement and to the exhibits and schedules filed therewith. All
these documents may be inspected at the Commission's principal office in
Washington, D.C. without charge, and copies of them may be obtained from the
Commission upon payment of prescribed fees. Statements contained in this
Prospectus as to the contents of any contract or other document filed as an
exhibit to the Registration Statement are not necessarily complete, and in each
instance reference is hereby made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, Room 1024 and at
the following Regional Offices of the Commission: 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, New York,
New York 10048. Copies of such material also can be obtained at prescribed
rates by writing to the Commission, Public Reference Section, 450 Fifth Street,
N.W., Washington, D.C. 20549. In addition, such materials filed electronically
by the Company with the Commission are available at the Commission's World Wide
Web site at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents that previously were, or are required in the future
to be, filed with the Commission (File No. 0-6529) pursuant to the Exchange Act
are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-KSB for the year ended
August 31, 1997;
(ii) the Company's Quarterly Report on Form 10-QSB for the quarter ended
November 30, 1997;
(iii) the description of the Company's common stock contained in the
Company's registration statement on Form 10 as filed with the
Commission on September 11, 1972;
(iv) the Company's Proxy Statement dated December 16, 1997 concerning
the Company's Annual Meeting of Shareholders held on January 21,
1998; and
(v) all documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering made
hereby.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that such statement is modified or replaced by a statement contained
in this Prospectus or in any other subsequently filed document that also is, or
is deemed to be, incorporated by reference into this Prospectus. Any such
statement so modified or superseded shall not be deemed, except as so modified
or replaced, to constitute a part of this Prospectus. The Company will provide
without charge to each person to whom a copy of this Prospectus has been
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delivered, upon the written or oral request of any such person, a copy of any or
all of the documents referred to above that have been or may be incorporated in
this Prospectus by reference, other than exhibits to such documents. Written or
oral requests for such copies should be directed to Stephen H. Hollis,
President, Double Eagle Petroleum And Mining Co., 777 Overland Trail (P.O. Box
766), Casper, Wyoming 82602, (307) 237-9330.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS AND
CAUTIONARY STATEMENTS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All
statements other than statements of historical fact included in or incorporated
into this Prospectus, regarding the Company's financial position, business
strategy, plans and objectives of management of the Company for future
operations and capital expenditures 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.
Additional statements concerning important factors that could cause actual
results to differ materially from the Company's expectations ("Cautionary
Statements") are disclosed in this Prospectus and in the documents incorporated
into this Prospectus. All written and oral forward-looking statements
attributable to the Company or persons acting on its behalf subsequent to the
date of this Prospectus are expressly qualified in their entirety by the
Cautionary Statements.
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THE COMPANY
Double Eagle Petroleum And Mining Co., which was formed on January 13,
1972, explores for, develops, produces and sells crude oil and natural gas. The
Company concentrates its activities in areas in which it believes it has
accumulated detailed geologic knowledge and developed significant management
experience. Current areas of exploration and development focus for the Company
include the Moxa Arch in southwestern Wyoming, the Powder River Basin in
northeastern Wyoming, the Washakie Basin in south central Wyoming, the Wind
River Basin in central Wyoming, and the Christmas Meadows area in northeastern
Utah. The Company currently owns interests in a total of 199 producing wells,
with oil constituting approximately 30 percent and natural gas constituting
approximately 70 percent of its current production (calculating six Mcf of gas
production as equal to one barrel of oil production). The Company also has
undeveloped acreage in other basins and is evaluating the possibility of
additional activity in other areas.
The Company's strategy is to increase its cash flow and oil and gas
reserves by developing and marketing oil and gas prospects. Upon marketing a
prospect to another entity, the Company will attempt to receive a promoted or
carried interest in the initial well for the prospect. The Company will then
participate proportionately in the drilling of any development wells on the
prospect. In prior years, the Company has undertaken to assemble a large
acreage position and sell it to others while retaining a royalty position. By
attempting to direct its focus to generation of geologic prospects with a
promoted interest at the exploratory phase and a participating interest at the
development stage, the Company will be utilizing more resources for drilling
rather than for lease acquisition. In this manner, the Company believes that in
a shorter time period it will be exposed to a greater number of opportunities to
increase reserves and cash flow.
In December 1996, the Company completed a public offering of 1,118,250
Units, each consisting of one share of Common Stock and one Common Stock
Purchase Warrant, for $1.50 per Unit. Each Warrant allows its holder to
purchase one share of Common Stock for $3.00 until December 17, 2001. The
Company received net proceeds of approximately $1,524,571 from that offering.
RISK FACTORS
Prospective purchasers of the Company's Common Stock should carefully
consider, together with the other information included herein and incorporated
by reference herein, the following factors that affect the Company:
~ Past~Operating~Losses~. The Company has reported net losses for three of
its past five fiscal years, including losses of $21,143 in 1996, $341,616 in
1994, and $76,421 in 1993. In addition, without considering proceeds from sales
of properties, the Company had net losses from operations of $19,820 in 1997,
$139,638 in 1996, $387,583 in 1995, $350,088 in 1994, and $213,500 in 1993.
There is no assurance that the Company's current or future operations will be
profitable.
~ Dependence~On~Key~Personnel~. The Company is highly dependent on the
services of Stephen H. Hollis, the Chairman Of The Board and Chief Executive
Officer of the Company. The loss of Mr. Hollis could have a material adverse
effect on the Company. The Company does not carry "key man" life insurance on
Mr. Hollis.
~ Oil~And~Gas~Prices;~Marketability~Of~Production~. The Company's revenues,
profitability and liquidity are substantially dependent upon prevailing prices
for oil and natural gas. Oil and gas prices can be extremely volatile and in
recent years have been depressed by excess total domestic and imported supplies.
There can be no assurance that current price levels can be sustained. Prices
also are affected by actions of state and local agencies, the United States and
foreign governments, and international cartels. These external factors and the
volatile nature of the energy markets make it difficult to estimate future
prices of oil and natural gas. Any substantial or extended decline in the price
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of oil and/or natural gas would have a material adverse effect on the Company's
financial condition and results of operations, including reduced cash flow and
borrowing capacity. All of these factors are beyond the control of the Company.
Sales of oil and natural gas may be seasonal in nature, leading to substantial
differences in cash flow at various times throughout the year. The
marketability of the Company's gas production depends in part upon the
availability, proximity and capacity of gas gathering systems, pipelines and
processing facilities. Federal and state regulation of oil and gas production
and transportation, general economic conditions, changes in supply and changes
in demand all could adversely affect the Company's ability to produce and market
its oil and natural gas. If market factors were to change dramatically, the
financial impact on the Company could be substantial. The availability of
markets and the volatility of product prices are beyond the control of the
Company and thus represent a significant risk.
The Company uses the "successful efforts" method for capitalizing costs of
completed oil and gas wells. Pursuant to the successful efforts method, only
the costs attributable to successful exploratory wells and the costs of
development wells within a producing field are reflected in property and
equipment. Producing and non-producing properties are evaluated periodically
and, if conditions warrant, an impairment allowance is provided. The impairment
allowance is a one-time charge to earnings which does not impact cash flow from
operating activities.
The Company's revenues also depend on its level of success in acquiring or
finding additional reserves. Except to the extent that the Company acquires
properties containing proved reserves or conducts successful exploration and
development activities, or both, the proved reserves of the Company will decline
as reserves are produced. There can be no assurance that the Company's planned
exploration and development projects will result in significant additional
reserves or that the Company will have future success in drilling productive
wells at low reserve replacement costs.
~ Competition;~General~Risks~Of~Oil~And~Gas~Operations~. The Company
competes in the areas of oil and gas exploration, production, development and
transportation with other companies, many of which may have substantially larger
financial and other resources. The nature of the oil and gas business also
involves a variety of risks, including the risks of operating hazards such as
fires, explosions, cratering, blow-outs, and encountering formations with
abnormal pressures, the occurrence of any of which could result in losses to the
Company. The Company maintains insurance against some, but not all, of these
risks in amounts that management believes to be reasonable in accordance with
customary industry practices. The occurrence of a significant event, however,
that is not fully insured could have a material adverse effect on the Company's
financial position.
~ Government~Regulation~And~Environmental~Risks~. The production and sale of
oil and gas are subject to a variety of federal, state and local government
regulations including regulation concerning the prevention of waste, the
discharge of materials into the environment, the conservation of oil and natural
gas, pollution, permits for drilling operations, drilling bonds, reports
concerning operations, the spacing of wells, the unitization and pooling of
properties, and various other matters including taxes. Many jurisdictions have
at various times imposed limitations on the production of oil and gas by
restricting the rate of flow for oil and gas wells below their actual capacity
to produce. During the past few years there has been a significant amount of
discussion by legislators and the presidential administration concerning a
variety of energy tax proposals. There can be no certainty that any such
measure will be passed or what its effect will be on oil and natural gas prices
if it is passed. In addition, many states have raised state taxes on energy
sources and additional increases may occur, although there can be no certainty
of the effect that increases in state energy taxes would have on oil and natural
gas prices. Although the Company believes it is in substantial compliance with
applicable environmental and other government laws and regulations, there can be
no assurance that significant costs for compliance will not be incurred in the
future.
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~Equity~Ownership~By~Directors~And~Officers~. As of February 24, 1998, the
Company's current officers and directors as a group, together with their
affiliates, owned approximately 16.2 percent of the outstanding Common Stock.
~Estimates~of~Reserves~And~Future~Net~Revenues;~No~Review~By~Independent~En
gineer~. The documents incorporated by reference into this Prospectus contain
estimates of the Company's reserves and of future net revenues which were
prepared by the Company and have not been reviewed by an independent petroleum
engineer. However, these estimates are not exact and are based on many variable
and uncertain factors. Estimates of reserves and of future net revenues may
vary substantially, depending, in part, on the assumptions made and may be
subject to adjustment either up or down in the future. The actual amounts of
production, revenues, taxes, development expenditures, operating expenses, and
quantities of recoverable oil and gas reserves to be encountered may vary
substantially from the estimated amounts. Estimates of reserves also are
extremely sensitive to the market prices for oil and gas.
OFFERING BY SELLING SHAREHOLDER
The Company is registering the transfer of an aggregate of 100,000 shares
of Common Stock by the Selling Shareholder. The Selling Shareholder may sell
its Common Stock at such prices as it is able to obtain in the market or as
otherwise negotiated. The Company will receive no proceeds from the sale of
Common Stock by the Selling Shareholder. Additionally, agents, brokers or
dealers may acquire Shares or interests therein as a pledgee and may, from time
to time, effect distributions of the Shares or interests in such capacity. The
Selling Shareholder informed the Company that it does not have any arrangements
or agreements with any underwriters or broker/dealers to sell the Shares, and
intends to contact various broker/dealers to identify prospective purchasers.
Prior to this offering, the Selling Shareholder beneficially owned 100,000
Shares of Common Stock underlying options held by the Selling Shareholder, or
approximately 2.5 percent of the Company's outstanding Common Stock. If the
Selling Shareholder sells all the Shares offered hereby, the Selling Shareholder
will not own any shares of the Company's Common Stock after this offering.
Phoenix Alliance, Inc. ("Phoenix"), the Selling Shareholder, entered into a
Services Agreement with the Company effective as of September 23, 1997. The
Services Agreement provides as follows: (A) Phoenix will provide consulting
services to the Company during the term of the agreement, (B) the initial term
of the agreement will be for a period of six months, and the agreement will
continue on a month-to-month basis for six months thereafter unless otherwise
terminated, (C) Phoenix will be paid $5,000 per month during the term of the
agreement, (D) the Company immediately will issue Phoenix options (the
"Options") to purchase 100,000 shares of the Company's Common Stock (the "Option
Shares"), (E) the Options will expire on April 1, 1999 and be exercisable at
$1.25 per share, and (F) Phoenix will not sell or otherwise transfer, encumber,
or hypothecate more than an aggregate of 25,000 of the Option Shares on or
before December 23, 1997, more than an aggregate of 50,000 of the Option Shares
on or before March 23, 1998, and more than an aggregate of 75,000 of the Option
Shares on or before June 23, 1998, and more than an aggregate of 100,000 of the
Option Shares on or before September 30, 1998.
The following table sets forth the name of the Selling Shareholder, the
number of shares of Common Stock owned by the Selling Shareholder before the
offering, the number of shares of Common Stock to be sold by the Selling
Shareholder, the number of shares owned by the Selling Shareholder after the
offering, and the percentage of shares of Common Stock owned after the offering.
<TABLE>
<CAPTION>
Number Of Shares Number Of Number Of Shares Percentage Of
Of Common Stock Shares To Owned After Shares Owned
Name Owned Before Offering Be Sold Offering After Offering
<S> <C> <C> <C> <C>
Phoenix Alliance, Inc. 100,000 (1) 100,000 0 0
<FN>
(1) The number of shares of Common Stock indicated represents 100,000 shares
underlying options that currently are exercisable.
</TABLE>
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LEGAL MATTERS
Bearman Talesnick & Clowdus Professional Corporation, Denver, Colorado, has
acted as counsel for the Company in connection with this offering. Attorneys
employed by that law firm beneficially own 31,000 shares of the Company's Common
Stock, and 31,000 Common Stock Purchase Warrants that were issued in the
Company's December 1996 public offering.
EXPERTS
The consolidated financial statements of Double Eagle Petroleum And Mining
Co. appearing in the Company's Annual Report on Form 10-KSB for the fiscal year
ended August 31, 1997 have been audited by Hocker, Lovelett, Hargens & Skogen,
P.C., independent auditors, as set forth in their report included therein and
incorporated herein by reference. Such financial statements are incorporated
herein by reference in reliance upon such report and upon the authority of such
firm as experts in auditing and accounting.
CERTAIN PROVISIONS OF WYOMING LAW
The following paragraph summarizes certain provisions of Wyoming law
concerning limitations on changes in control of the Company. The summary does
not purport to be complete and is subject to and qualified in its entirety by
reference to Wyoming law for complete information.
The provisions of Sections 17-18-101, ~et~seq.~, of the Wyoming Business
Corporation Act, which sections are referred to as the "Wyoming Management
Stability Act", could have the effect of delaying, deferring or preventing
change in control of the Company or the removal of existing management, and as a
result could prevent the stockholders of the Company from being paid a premium
for their shares of Common Stock.
SECURITIES AND EXCHANGE COMMISSION POSITION ON
CERTAIN INDEMNIFICATION
The Wyoming Business Corporation Act provides for indemnification by a
corporation of costs incurred by directors, employees, and agents in connection
with an action suit, or proceeding brought by reason of their position as a
director, employee, or agent. The person being indemnified must have acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation.
The Board Of Directors is empowered to make other indemnification as
authorized by the Articles Of Incorporation or by corporate resolution so long
as the indemnification is consistent with the Wyoming Business Corporation Act.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that, in the
opinion of the Securities And Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
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NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATION OTHER THAN
THOSE CONTAINED IN THIS
PROSPECTUS AND, IF SO GIVEN OR TABLE OF CONTENTS
MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE Page
RELIED UPON AS HAVING BEEN ----
PROVIDED BY DOUBLE EAGLE
PETROLEUM AND MINING CO. THIS AVAILABLE INFORMATION 2
PROSPECTUS DOES NOT CONSTITUTE INCORPORATION OF CERTAIN
AN OFFER TO SELL OR THE DOCUMENTS BYREFERENCE 2
SOLICITATION OF AN OFFER TO DISCLOSURE REGARDING FORWARD-
PURCHASE, ANY SECURITIES THAT LOOKING STATEMENTS AND
ARE COVERED BY THIS PROSPECTUS, CAUTIONARY STATEMENTS 3
TO ANY PERSON IN A JURISDICTION THE COMPANY 4
IN WHICH IT IS UNLAWFUL TO MAKE RISK FACTORS 4
SUCH AN OFFER OR SOLICITATION. OFFERING BY SELLING SHAREHOLDERS. 6
NEITHER THE DELIVERY OF THIS LEGAL MATTERS 7
PROSPECTUS NOR THE DISTRIBUTION EXPERTS 7
OF ANY SECURITIES TO WHICH THIS CERTAIN PROVISIONS OF WYOMING
PROSPECTUS RELATES SHALL CREATE LAW 7
ANY IMPLICATION THAT THERE HAS SECURITIES AND EXCHANGE
NOT BEEN A CHANGE IN THE AFFAIRS COMMISSION POSITION ON
OF DOUBLE EAGLE PETROLEUM AND CERTAIN INDEMNIFICATION 7
MINING CO., OR THAT THE
INFORMATION CONTAINED IN THIS
PROSPECTUS IS CORRECT, AT ANY
TIME SUBSEQUENT TO THE DATE OF
THIS PROSPECTUS.
DOUBLE EAGLE PETROLEUM
AND MINING CO.
100,000 SHARES
COMMON STOCK
($.10 Par Value)
PROSPECTUS
February 24, 1998
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