As filed with the Securities and Exchange Commission on February 29, 2000
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
KESTREL ENERGY, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0772451
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
999 18th Street, Suite 2490
Denver, Colorado 80202
(303) 295-0344
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
------------------------------------
With copies to:
TIMOTHY L. HOOPS LEE TERRY, JR., ESQ.
President Gorsuch Kirgis LLP
Kestrel Energy, Inc. Tower I, Suite 1000
999 18th Street, Suite 2490 1515 Arapahoe Street
Denver, Colorado 80202 Denver, Colorado 80202
(303) 295-0344 (303) 376-5000
(303) 295-1862 (303) 376-5001 Fax
(Names, addresses, including zip codes, and telephone numbers, including
area codes, of agent for service)
-----------------------------------
Approximate date of commencement of proposed sale to the public:
From time to time after this registration statement becomes effective.
If the only securities being registered on this Form are being
offered pursuant to a 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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================
Title of each Proposed Proposed
class of maximum maximum
securities offering aggregate
to be Amount to be price per offering Amount of
registered registered share (1) price (1) registration fee
---------- ------------ ---------- --------- ----------------
<S> <C> <C> <C> <C>
Common
Stock(2) 2,768,271 $2.875 $7,958,779.13 $2,101.12
Warrants(3) 728,250 $.01 $7,282.50 $1.92
Total $7,996,603.63 $2,103.04
=========================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee.
Pursuant to Rule 457(c), the offering price of $2.875 per share is
the last sale price reported by The Nasdaq SmallCap Stock Market on
February 25, 2000.
(2) Includes 2,040,021 Shares of common stock and 728,250 shares of
common stock underlying warrants held by the selling shareholders for
subsequent resale by the selling shareholders, and pursuant to Rule
416 under the Securities Act, an indeterminate number of shares of
common stock as may be issued from time to time upon exercise of such
warrants by reason of adjustment of the number of shares of common
stock to be issued upon such exercises under certain circumstances
outlines herein.
(3) Warrants registered on behalf of selling shareholders, based on the
fair market value of the options at the date of grant
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 in accordance with Section 8(a), may determine.
PROSPECTUS
KESTREL ENERGY, INC.
2,768,271 SHARES
COMMON STOCK
728,250 WARRANTS
---------------------
This prospectus relates to 2,768,271 shares and 728,250 warrants that
may be sold from time to time by the selling shareholders named in this
prospectus. The shares offered include 950,000 shares sold in a private
placement by us in December 1999; 728,250 shares, subject to adjustment,
for exercise of the warrants; and 1,080,021 shares issued in private
placements by us in June 1992, January 1994 and May 1994. The warrants
were distributed by us as a dividend to our shareholders and entitle the
holder to purchase an equal number of shares of our common stock at an
exercise price of $3.125 per share.
This offering is not being underwritten. The offering price for the
common stock that may be sold by the selling shareholders may be the
market price for our common stock prevailing at the time of sale, a price
related to the prevailing market price, a negotiated price or such other
prices as the selling shareholders determine from time to time. Our
warrants do not have an established trading market and will not be listed
on any securities exchange. The offering price for the warrants that may
be sold by the selling shareholders may be the market price, if a market
develops, a negotiated price or such other prices as the selling
shareholders determine from time to time.
We will receive up to $2,275,781 upon the exercise of the warrants by
our shareholders, based upon an exercise price of $3.125 per share. We
will not receive any proceeds from the sales of common stock or warrants
by the selling shareholders.
Our common stock is traded on the Nasdaq SmallCap Market under the
symbol "KEST." On February 28, 2000, the last reported sale price of the
common stock was $2.6875 per share.
INVESTING IN SHARES OF OUR COMMON STOCK INVOLVES RISK. YOU SHOULD
CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
KESTREL ENERGY, INC.
999 18th Street, Suite 2490
Denver, Colorado 80202
(303) 295-0344
The date of this Prospectus is _________, 2000.
The information in this prospectus is not complete and may change. 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 is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
[INSIDE FRONT COVER]
TABLE OF CONTENTS
Risk Factors 3
Forward-Looking Statements 6
Where You Can Find More Information 6
Our Business 7
Recent Developments 7
Stock Ownership of Principal Shareholders and Management 8
Use of Proceeds 9
Selling Shareholders 9
Plan of Distribution 15
Experts 16
Legal Matters 16
You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with information different
from that contained in this prospectus. The selling shareholders are
offering to sell, and seeking offers to buy, shares of common stock and
warrants only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date
of this prospectus, regardless of the time of delivery of this prospectus
or of any sale of common stock.
RISK FACTORS
WE MUST CONTINUE TO EXPAND OUR OPERATIONS
Our long term success is ultimately dependent on our ability to
expand our revenue base through the acquisition of producing properties
and, to a much greater extent, by successful results in our exploration
efforts. We have recently made significant investments in exploration
properties in the Green River Basin in Wyoming. There is no assurance
that these acquisitions or other acquisitions will be as successful as
projected. Although our international exploration program has been
relatively low risk for us because of the smaller investments we have made
in those high risk drilling programs, we have made a larger investment in
specific properties in the Green River Basin. All of our exploration
projects are subject to failure and the loss of our investment.
PRICES OF OIL AND NATURAL GAS FLUCTUATE WIDELY BASED ON MARKET CONDITIONS
AND ANY DECLINE WILL ADVERSELY AFFECT OUR FINANCIAL CONDITION
Our revenues, operating results, cash flow and future rate of growth
are very dependent upon prevailing prices for oil and gas. For the fiscal
year ended June 30, 1999, approximately 82% of our revenue was from the
sale of oil and gas. Historically, oil and gas prices and markets have
been volatile and not predictable, and they are likely to continue to be
volatile in the future. Prices for oil and gas are subject to wide
fluctuations in response to relatively minor changes in the supply of and
demand for oil and gas, market uncertainty and a variety of additional
factors that are beyond our control, including:
o political conditions in the Middle East
o the supply and price of foreign oil and gas
o the level of consumer product demand
o the price and availability of alternative fuels
o the effect of federal and state regulation of production
and transportation
o the proximity of our natural gas to pipelines and their
capacity
WE MUST REPLACE THE RESERVES WE PRODUCE
A substantial portion of our oil and gas properties are proved
undeveloped reserves and probable reserves. Successful development and
production of those reserves cannot be assured. Additional drilling will
be necessary in future years both to maintain production levels and to
define the extent and recoverability of existing reserves. There is no
assurance that our present oil and gas wells will continue to produce at
current or anticipated rates of production, that development drilling will
be successful, that production of oil and gas will commence when expected,
that there will be favorable markets for oil and gas which may be produced
in the future or that production rates achieved in early periods can be
maintained.
THERE ARE MANY RISKS IN DRILLING OIL AND GAS WELLS
The cost of drilling, completing and operating wells is often
uncertain. Moreover, drilling may be curtailed, delayed or canceled as a
result of many factors, including title problems, weather conditions,
shortages of or delays in delivery of equipment, as well as the financial
instability of well operators, major working interest owners and well
servicing companies. Our gas wells may be shut-in for lack of a market
until a gas pipeline or gathering system with available capacity is
extended into our area. Our oil wells may have production curtailed until
production facilities and delivery arrangements are acquired or developed
for them.
WE FACE INTENSE COMPETITION
The oil and natural gas industry is highly competitive. We compete
with others for property acquisitions and for opportunities to explore or
to develop and produce oil and natural gas. We have formed acquisition
joint ventures with several other companies, including Victoria Petroleum
N.L. and other affiliates, which have allowed us more access to
acquisition candidates and to share the evaluation costs with them. We
face strong competition from many companies and individuals with greater
capital, financial resources and larger technical staffs. We also face
strong competition in procuring services from a limited pool of laborers,
drilling service contractors and equipment vendors.
THE AMOUNT OF INSURANCE WE CARRY MAY NOT BE SUFFICIENT TO PROTECT US
We, our partners, co-venturers and well operators maintain general
liability insurance but it may not cover all future claims. If a large
claim is successfully asserted against us, we might not be covered by
insurance, or it might be covered but cause us to pay much higher
insurance premiums or a large deductible or co-payment. Furthermore,
regardless of the outcome, litigation involving our operations, or even
insurance companies disputing coverage could divert management's
attentions and energies away from operations. The nature of the oil and
gas business involves a variety of operating hazards such as fires,
explosions, cratering, blow-outs, adverse weather conditions, pollution
and environmental risks, encountering formations with abnormal pressures,
and, in horizontal wellbores, the increased risk of mechanical failure and
collapsed holes, the occurrence of any of which could result in
substantial losses to us.
OUR SUCCESS MAY BE DEPENDENT ON OUR ABILITY TO RETAIN TIM HOOPS, RICK
VINE, JOHN KOPCHEFF, BOB PETT AND IRA PASTERNACK AS KEY PERSONNEL
We believe that the oil and gas exploration and development and
related management experience of our key personnel is important to our
success. The active participation in Kestrel of Timothy L. Hoops, our
president, Richard L. Vine, vice president of Engineering, John T.
Kopcheff, vice president of International, Robert J. Pett, our chairman,
and Ira Pasternack, vice president of Exploration, is a necessity for our
continued operations. We do not have any employment contracts with these
individuals and we do not have key person life insurance on their lives.
We compete with bigger and better financed oil and gas exploration
companies for these individuals. Our future success may depend on whether
we can attract, retain and motivate highly qualified personnel. We can't
assure you that we will be able to do so.
OUR RESERVES ARE UNCERTAIN
Estimating our proved reserves involves many uncertainties, including
factors beyond our control. Our annual report on Form 10-K for fiscal
year 1999 contained estimates of our oil and natural gas reserves and the
future cash flow to be realized from those reserves for fiscal years 1999,
1998 and 1997, as prepared by independent petroleum engineers. There are
uncertainties inherent in estimating quantities of proved oil and natural
gas reserves since petroleum engineering is not an exact science.
Estimates of commercially recoverable oil and gas reserves and of the
future net cash flows from them are based upon a number of variable
factors and assumptions including:
o historical production from the properties compared with
production from other producing properties
o the effects of regulation by governmental agencies
o future oil and gas prices
o future operating costs, severance and excise taxes,
abandonment costs, development costs and workover and remedial
costs
GOVERNMENTAL REGULATION, ENVIRONMENTAL RISKS AND TAXES COULD ADVERSELY
AFFECT OUR OIL AND GAS OPERATIONS IN THE UNITED STATES
Our oil and natural gas operations in the United States are subject
to regulation by federal and state government, including environmental
laws. To date, we have not had to expend significant resources in order
to satisfy environmental laws and regulations presently in effect.
However, compliance costs under any new laws and regulations that might be
enacted could adversely affect our business and increase the costs of
planning, designing, drilling, installing, operating and abandoning our
oil and gas wells and other facilities. Additional matters that are, or
have been from time to time, subject to governmental regulation include
land tenure, royalties, production rates, spacing, completion procedures,
water injections, utilization, the maximum price at which products could
be sold, energy taxes and the discharge of materials into the environment.
OUR OPERATIONS IN FOREIGN COUNTRIES ARE AT RISK BECAUSE OF THEIR
GOVERNMENTAL REGULATIONS AND TAXES
Our proposed operations in other countries may involve comparable or
even greater risks from governmental regulations and taxes, including the
risk of partial or complete forfeiture of our interests to a foreign
government as the result of a new government's policies. We do not
believe that there is a material risk of an outright government seizure of
our interests in any of the foreign countries in which we currently
propose doing business but government participation in a successful
exploration effort is possible in some cases.
THE SALE OF THE SHARES BY THE SELLING SHAREHOLDERS COULD HAVE AN ADVERSE
IMPACT ON OUR STOCK
Our stock is traded on the Nasdaq SmallCap Market and there has
historically been a relatively low volume of trading in the shares.
Consequently, the price at which the shares trade may be highly volatile.
The selling shareholders are not restricted as to the price or prices at
which they may sell their shares. Sales of their shares at less than the
market prices may depress the market price of our stock. Moreover, the
selling shareholders are not restricted as to the number of shares which
may be sold at any one time, and it is possible that a significant number
of shares could be sold at the same time which may depress the market
price of our stock. The shares being offered by the selling shareholders
represent approximately 34.8% of our current outstanding shares. In
addition, although our stock is currently traded on the Nasdaq SmallCap
Market, there is no assurance that it will remain eligible to be included
on Nasdaq.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. We use words
such as "anticipate", "believe", "expect", "future", "may", "will",
"should", "plan", "intend", and similar expressions to identify forward-
looking statements. These statements are based on our beliefs and the
assurances we made using information currently available to us. Because
these statements reflect our current views concerning future events, these
statements involve risks, uncertainties and assumptions. Our actual
results could differ materially from the results discussed in the forward-
looking statements. Some, but not all, of the factors that may cause
these differences include those discussed in the risk factors in this
prospectus. You should not place undue reliance on these forward-looking
statements. You should also remember that these statements are made only
as of the date of this prospectus and future events may cause them to be
less likely to prove to be true.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, special reports, proxy statements, and
other information with the Securities and Exchange Commission. You can
read and copy any document filed by us at the SEC's Public Reference Room,
450 Fifth Street N.W., Washington, D.C. 20549. You may request copies of
these documents, upon payment of a duplicating fee, by writing the SEC at
the address in the previous sentence. Please call the SEC at 1-800-SEC-
0330 for further information on the operation of its Public Reference
Room. Our SEC filings are also available on the SEC's website at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" information from
other documents that we file with it, which means that we can disclose
important information 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 following documents:
o our Annual Report on Form 10-K for the year ended June 30,
1999;
o our Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1999 and December 31, 1999;
o the description of our securities contained in our
registration statement on Form 8-A, File No. 0-9261, filed on
May 2, 1980 pursuant to Section 12(g) of the Securities Exchange
Act of 1934, and as amended by our Form S-3, File No. 33-89716,
declared effective on May 12, 1995;
o the description of our warrants contained in our
registration statement on Form 8-A, File No. 0-09261, filed on
January 20, 2000 pursuant to Section 12(g) of the Securities
Exchange Act of 1934, and
o all documents and reports subsequently filed with the
Commission by us pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and prior
to the termination of this offering of common stock.
You may request a copy of any of these documents, except exhibits to
the documents, unless they are specifically incorporated by reference, at
no cost by writing or telephoning us at the following address:
Mark A. Boatright
Kestrel Energy, Inc.
999 18th Street, Suite 2490
Denver, Colorado 80202
(303)295-0344
You should rely only on the information contained in this document or
that we have referred you to. We have not authorized anyone else to
provide you with different information.
OUR BUSINESS
Our principal business is exploration for oil and gas reserves in the
United States and in Australia and surrounding areas. In addition, we own
working interests, which are expense bearing interests, in proved
developed producing and proved undeveloped oil and gas leases that are not
operated by us, in several areas in the United States. We also own some
royalty interests, which are expense-free interests in properties which
are operated by others, in oil and gas leases across the country. Proved
developed reserves are oil and gas reserves which can be expected to be
recovered through existing wells with existing equipment and operating
methods. Proved undeveloped reserves are oil and gas reserves which can
be expected to be recovered from new wells on undrilled acreage or from
existing wells where a relatively major expenditure is required for
recompletion. Normally we use existing working capital and cash flow for
the development of our exploration and development properties. However,
we have in the past obtained debt and equity financing to fund our
development efforts and expect to do so again in the future.
We presently own oil and gas interests in the states of California,
Colorado, Louisiana, New Mexico, Oklahoma, South Dakota, Texas and
Wyoming, as well as in Papua New Guinea and Australia.
We were incorporated in Colorado on November 1, 1978 as Tanner Pruitt
Exploration, Inc. In March 1995, we changed our name to Kestrel Energy,
Inc. Our offices are located at 999 18th Street, Suite 2490, Denver,
Colorado 80202, and our telephone number is (303) 295-0344.
RECENT DEVELOPMENTS
In December 1999, we sold 950,000 shares of our no par value common
stock pursuant to an offering under Regulation S to qualified non-U.S.
investors for an aggregate of $2,565,000. An aggregate of $22,545 was
paid in commissions to one person, Neil MacLachlan, a non-U.S. resident,
for placement of the offering. Mr. MacLachlan is a director of Samson
Exploration N.L. which owns 1,503,000 shares.
On January 18, 2000, our board of directors declared a dividend
distribution of 10 warrants for each 100 shares of common stock, no par
value per share, held by the holders of our common stock outstanding at
the close of business on February 4, 2000. We did not issue warrants in
increments of less than 10 warrants per 100 shares of common stock, but in
lieu of issuing warrants in increments of less than 10 warrants, we
rounded up or down to the nearest 100 shares held by each shareholder on
the record date. We distributed 728,500 warrants to our shareholders; no
warrants were issued to shareholders holding less than 100 shares on the
record date. The warrants entitle the holder to purchase an equal number
of shares of our common stock at an exercise price of $3.125 per share,
subject to adjustment under certain circumstances. The warrants cannot be
transferred or exercised by the holder unless we have filed a registration
statement which has been declared effective by the Securities and Exchange
Commission, registering the warrants and the common stock issuable upon
exercise of the warrants, and that registration statement continues to be
effective at the time of transfer or exercise. We may redeem the warrants
upon written notice for $.01 per warrant, at any time until their
expiration date, which is February 4, 2001, provided, however, our common
stock has traded at an average price of $3.75 or more (120% of the
exercise price) for a period of five consecutive trading days prior to the
notice of redemption and we have an effective registration statement
permitting the exercise at that time. The warrants may be exercised
through the close of business on the day preceding the redemption date.
STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS
AND MANAGEMENT
The following shareholder information about the beneficial ownership
of our common stock, prior to the sale and/or exercise of warrants, and as
of the date of this prospectus, provides the information for:
o each person known by us to beneficially own more than 5% of
our common stock;
o each of our directors;
o each of our executive officers; and
o our current directors and executive officers as a group.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
Voting and Investment Power
- -------------------------------------------------------------------------
Name Direct Indirect Total Shares Percent
Owned
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Victoria
International
Petroleum N.L. 1,415,221 --- 1,415,221 19.4%
Victoria
Petroleum N.L. --- 1,415,221 1,415,221 19.4%
Samson
Exploration N.L.1,503,000 --- 1,503,000 20.6%
The Equitable
Life Assurance
Society 840,000 --- 840,000 11.5%
CIBC Eyres
Reed Australian
Resources Fund 875,000 --- 875,000 12.0%
Timothy L. Hoops 264,490 1,415,221 1,679,711 22.3%
Robert J. Pett 140,208 1,415,221 1,555,429 21.0%
John T. Kopcheff 189,415 1,415,221 1,604,637 21.5%
Mark A. Boatright 56,164 -- 56,164 <1%
Kenneth W.
Nickerson 37,409 -- 37,409 <1%
Mark A.E.
Syropoulo 140,000 38,000 178,000 2.4%
All Directors and
Officers as a
Group (6 persons) 2,280,907 28.3%
</TABLE>
o Victoria International Petroleum N.L. is a wholly owned subsidiary of
Victoria Petroleum N.L. and both companies are deemed to be the
beneficial owners of the shares. Resolute Limited, a publicly held
Australian mining and natural resources company, owns 16.8% of
Victoria Petroleum N.L. Resolute disclaims beneficial ownership of
the shares.
o Messrs. Hoops, Pett and Kopcheff are directors of Victoria
International Petroleum N.L. and Victoria Petroleum N.L., and as a
result, all shares beneficially owned by those companies are listed
as indirectly held by each individual.
o Mr. Syropoulo owns 38,000 shares indirectly through Syrops & Co. Pty.
Ltd.
o The shares owned by the executive officers and directors include or
consist of the following shares acquirable upon exercise of stock
options which are exercisable within 60 days of this prospectus: Mr.
Hoops 236,580, Mr. Pett 130,208, Mr. Kopcheff 185,415, Mr. Boatright
52,164, Mr. Nickerson 37,409 and Mr. Syropoulo 140,000.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock
offered by the selling shareholders pursuant to this prospectus. We will
receive proceeds if selling shareholders exercise their warrants to
purchase shares of common stock. If all of the selling shareholders were
to exercise their warrants, we would receive gross proceeds of $2,275,781.
When and if we receive these funds, they will be used for general
corporate purposes. As there is no assurance that any or all of the
warrants will be exercised, we are unable to predict the amount to be used
for such purposes.
SELLING SHAREHOLDERS
The shares offered pursuant to this prospectus have been or will be
issued to the selling shareholders (or their assignees) directly by us.
Of the shares of our common stock and warrants covered by this prospectus,
we:
o issued 950,000 shares in a private placement completed in
December 1999, under Regulation S to non-U.S. residents of
Canada, Europe and Australia and elsewhere to the following
persons, which shares are included in the number of shares to be
sold by them in the offering:
<TABLE>
<CAPTION>
Selling Shareholder Number of Shares
------------------- ----------------
<S> <C>
Samson Exploration N.L. 240,000
Victoria International Petroleum N.L. 220,000
Golden Prospect PLC 20,000
Gayle Ann Davies 2,500
Maryanne Louisa Young 5,000
NT MacLachlan 25,000
Oyama Pty Ltd 2,000
Hill Young & Associates 43,000
Cornwall Holdings Pty Ltd 50,000
Exchange Nominee Pty Ltd 10,000
Hydra Energy Services Pty Ltd 10,000
Europa Investment Services Ltd 5,000
William John Evans 10,000
Lippo Securities Limited 40,000
Christopher Anthony Evans 5,000
CIBC Eyres Reed Australian Resources Fund 150,000
Hill Samuel Bank (Jersey) Ltd 25,000
BSI (Channel Islands) Ltd 20,000
James Capel Asset Mgmt 50,000
VLH Pty, Ltd 5,000
Richard James Hill 4,500
Philomena Pty Ltd 7,500
-------
Total 950,000
=======
</TABLE>
o issued 728,250 warrants as a dividend to our shareholders
of record on February 4, 2000;
o will issue up to 728,250 shares, subject to adjustment
under certain circumstances, upon exercise of the warrants
issued as a dividend to our shareholders;
o issued 1,090,021 shares to Victoria International Petroleum
N.L. for conversion of promissory notes and the exchange of
shares for Victoria Exploration, Inc., one of our wholly-owned
subsidiaries.
We agreed to file this registration statement for the resale of the
shares purchased in the Regulation S offering, the sale of the warrants,
the shares underlying the warrants and shares previously issued to
Victoria International Petroleum N.L. We agreed to bear all out-of-pocket
expenses of this offering, other than underwriting discounts and selling
commissions. The selling shareholders may sell none, some, or all of the
common stock and warrants offered by them as listed below.
To the best of our knowledge, none of the selling shareholders has
had any position, office or other material relationship with our company
or any of its affiliates except as described below:
o Timothy L. Hoops is our president and one of our directors.
o Samson Exploration N.L. is one of our principal
shareholders.
o Mark A.E. Syropoulo is one of our directors. He is also an
officer and director of Syrops & Co. Pty. Ltd.
o Victoria International Petroleum N.L. is one of our
principal shareholders and the following officers and directors
of our company are also directors of Victoria - Timothy L.
Hoops, Robert J. Pett and John T. Kopcheff.
The following table sets forth certain information with respect to
the beneficial ownership of shares of our common stock by the selling
shareholders as of the date of this prospectus and the number of shares
which may be offered pursuant to this prospectus for the account of each
of the selling shareholders or their transferees from time to time.
The table assumes:
o the exercise of all warrants beneficially owned by the
selling shareholder at the exercise price and for the maximum
number of shares permitted as of the date of this prospectus;
o that each selling shareholder will sell all shares of
common stock offered pursuant to this prospectus, but not any
other shares of common stock beneficially owned by such
shareholder; and
o that each selling shareholder will sell all warrants to
purchase shares of common stock offered pursuant to this
prospectus.
<TABLE>
<CAPTION>
Maximum
Shares Warrants Shares
Owned Owned To Be Sold
Prior To Prior To In The
Name Offering Offering Offering
---- -------- -------- ---------
<S> <C> <C> <C>
William John Evans 33,000 3,000 13,000
Sandra Abrams 194 20 20
Advena Nominees Pty Ltd. 16,500 1,500 1,500
Albatross Investment
Services Ltd. 26,400 2,400 2,400
Anz Grindlays Nominee
Ltd Acct 1084 137,500 12,500 12,500
William C. Arthur 440 40 40
Australasian Syndication
Management Services Pty Ltd. 5,500 500 500
Ray Barnes 11,000 1,000 1,000
Raymond G. Barnes 11,000 1,000 1,000
James F. Barton 360 30 30
Berenes Nominees Pty Ltd. 4,400 400 400
John K. Beumee 110 10 10
Betty M. Billingsley 150 10 10
Alex Boardman 110 10 10
Gerald E. Boatright 2,750 250 250
The Equitable Life
Assurance Society 924,000 84,000 84,000
Pamela Anne Boucher 6,425 580 580
Robert G. Boucher 1,100 100 100
Sharon Kay Braden 138 10 10
Timothy K. Bradley 1,320 120 120
Michael Thomas Breitbart 280 30 30
Randall S. Brich 1,100 100 100
Kathleen H. Brinkhaus 220 20 20
George Brunacini 220 20 20
BSI (Channel Islands) Ltd. 22,000 2,000 22,000
John V. Buglewicz TTEE
John V. Buglewicz Self
Emp Ret. Acct. 220 20 20
CIBC Eyres Reed Australian
Resources Fund 962,500 87,500 237,500
David M. Carroll 330 30 30
Betsy Ann Carulli 2,750 250 250
Cede & Co. 771,650 70,150 70,150
Rosanna Chang 2,200 200 200
C M S & Co. A Partnership 110 10 10
Cornwall Holdings Pty Ltd. 55,000 5,000 55,000
Ben S. Curtis 880 80 80
Victor L. Damon 228 20 20
David Jones-Prichard 4,400 400 400
Derain Pty Ltd. 16,500 1,500 1,500
Douglas Financial Consultants 33,000 3,000 3,000
Evan Duval & Ann Duval JTWROS 220 20 20
Charles E. Dyke &
Geraldine Dyke JTWROS 194 20 20
Economic Consultants Pty Ltd. 11,000 1,000 1,000
Charlotte Edberg 220 20 20
Energy Minerals Corporation 956 90 90
Bruce E. Engquist 228 20 20
Ken Erikson 110 10 10
Europo Investment Services Ltd. 5,500 500 5,500
Christopher Anthony Evans 5,500 500 5,500
Exchange Nominees Pty Ltd. 118,890 10,810 20,810
Falcon Resources Pty Ltd. 28,600 2,600 2,600
Alvern K. Gardner 1,050 100 100
Omer R. Gaskins TTEE
Omer R. Gaskins Trust 110 10 10
Richard Gaver 110 10 10
Gaye Anne Davies 2,750 250 2,750
James Gilsdorf 390 40 40
Golden Prospect Plc. 22,000 2,000 22,000
Graceview Pty Ltd.
Superannuation 5,500 500 500
Graceview Pty Ltd. 5,500 500 500
David A. Graham 110 10 10
David Graham 110 10 10
Green River Resources Ltd. 27,500 2,500 2,500
John W. Green 1,100 100 100
Sarah L. Grove 130 10 10
Ross Haldane & Catherina
Haldane JTWROS 2,200 200 200
Stanley B. Hallman Tr. FBO
Andrea Ann Boucher Trust 6,812 620 620
Stanley B. Hallman Tr. FBO
Denise Ann Boucher Trust 6,812 620 620
Jack K. Hallowell & Colene
N. Hallowell JTWROS 110 10 10
Hare & Co. 82,500 7,500 7,500
Richard L. Hawkins 334 30 30
Hill Young & Associates 47,300 4,300 47,300
Richard James Hill 4,950 450 4,950
Timothy L. Hoops & Linda
Sue Hoops JTWROS 5,500 500 500
Timothy L. Hoops 15,520 1,410 1,410
Valerie Hundley 150 10 10
Hydra Energy Services Pty Ltd. 11,000 1,000 11,000
Ivanhoe Pty Ltd. 1,100 100 100
James Capel Asset Management 55,000 5,000 55,000
James Capel Investment Mgmt. 272,800 24,800 24,800
D. Robert Johnson 2,530 230 230
B. Todd Jones & Marguerite
L. Jones JTWROS 180 20 20
Gilbert E. Jones Jr. 190 20 20
Rosemary P. Kelley &
Kevin C. Kelley JTWROS 180 20
Judith S. Kennedy 440 40 40
Verne C. Knight TTEE
Verne C. Knight TR UA
Dtd. Dec. 27, 1973 68,841 6,260 6,260
George M. Kolman Jr. 110 10 10
Nicholas Kondua 495 50 50
Harry Kramer 220 20 20
Lakes Oil NL 55,000 5,000 5,000
Ezra Lamm 660 60 60
John R. Lee 110 10 10
Lippo Securities Limited 44,000 4,000 44,000
Michael Thomas Loncar 180 20 20
John E. Maas 136 10 10
MacDougall MacDougall
& Mactier Inc. 44,000 4,000 4,000
Hank Marohnich 350 30 30
Maryanne Louisa Young 5,500 500 5,500
Jim McCall 280 30 30
Evelyn M. Mitchell 116 10 10
MJH Nightingale & Co. Ltd. 4,400 400 400
Moco Resources Inc. 110 10 10
Montgomery Burns Pty Ltd. 8,800 800 800
W. Bruce Moore 220 20 20
Steven Moschonas 1,100 100 100
William Moskovits 370 30 30
Narrow Lane Pty Ltd. 16,500 1,500 1,500
Gerald L. Nelson 110 10 10
Nieuport Pty Ltd. 66,000 6,000 6,000
Nightingale Development
Capital 4,400 400 400
Alan W. Noyes 130 10 10
NT MacLachlan 82,500 7,500 32,500
James Omalley 620 60 60
Oyama Pty Ltd. 2,200 200 2,200
Robert B. Perry & Patricia
S. Perry JTWROS 1,210 110 110
Tom Phillips 550 50 50
Philomena Pty Ltd. 8,250 750 8,250
C.F. Pofahl 1,448 130 130
Russell A. Pomeroy 880 80 80
Ron Prefontaine 2,200 200 200
Mary Loren Pruit Trust 110 10 10
Sally Lynn Pruit Trust 134 10 10
Thomas Branch Pruit Trust 110 10 10
Jonathan M. Roitman 110 10 10
Steven A. Roitman 2,200 200 200
J. Mark Roper 110 10 10
Michele R. Rounds 660 60 60
Samson Exploration N.L. 1,653,300 150,300 390,300
Hill Samuel Bank (Jersey) Ltd. 27,500 2,500 27,500
Al Sayers 1,100 100 100
Cleone E. Sayers 1,100 100 100
Anthony E. Schiffer & Mary
B. Schiffer JTWROS 440 40 40
Morin M. Scott 660 60 60
Larry O'Connor & Ellen
O'Connor TTEES Shamrock
Fibers Inc. Pen PL 220 20 20
Shertim Investments Pty Ltd. 26,400 2,400 2,400
Shertim Pty Ltd. 22,460 2,040 2,040
Hanish Smith 5,500 500 500
Larry D. Smith 390 40 40
Stenbank Pty Ltd. 11,000 1,000 1,000
Marie T. Sullivan 116 10 10
James M. Swanson 610 50 50
Syrops & Co. Pty Ltd. 5,500 500 500
L.R. Tanner & B.A. Tanner JTWROS 540 50 50
Randy L. Tanner 145 10 10
E.A. Teas 910 80 80
Teddy Bear Shop London Ltd. 5,500 500 500
Thomas Phillip John Conn. 11,000 1,000 1,000
Jane M. Tibbs 440 40 40
Joseph A. Tibbs 440 40 40
David A. Todd 220 20 20
Louis G. Trilikis & Betty
A. Trilikis JTWROS 110 10 10
Louis G. Trilikis 110 10 10
Estelle Trubow Leslie Trubow &
Marshall Trubow Jt. Ten. 110 10 10
Donald Tulloch 5,500 500 500
William Tulloch 5,500 500 500
Kenneth Lewis Tulloch 5,500 500 500
Johnnie L. Tyler 260 20 20
Ronald D. Vanderhoef & Kathy
J. Vanderhoef JTWROS 220 20 20
Ronald D. Vanderhoef C/F Tyler
H. Vanderhoef UGMA WY 350 30 30
Ronald D. Vanderhoef C/F Christian
J. Vanderhoef UGMA WY 350 30 30
Emily Vaughan-Spruce 1,380 130 130
Ian Vaughan-Spruce 1,380 130 130
Isabel Vaughan-Spruce 1,380 130 130
Rufus Vaughan-Spruce 1,380 130 130
Victoria International
Petroleum NL 1,556,743 141,522 1,451,543
VLH Pty Ltd. TTEE VLH Pty
Ltd. Superannuation Fund 11,000 1,000 1,000
VLH Pty Ltd. 5,500 500 5,500
Charles Don Wachtman 110 10 10
Mike A. Wachtman 220 20 20
Suzan Debra Wagner 3,300 300 300
Carol Waltz 11,000 1,000 1,000
Wendell C. Weaver 220 20 20
Theodore B. Zimmerman 460 40 40
</TABLE>
<TABLE>
<CAPTION>
Shares Owned Warrants
After Offering Owned
-------------- After
Name Number Percentage Offering
---- ------ ---------- ---------
<S> <C> <C> <C>
William John Evans 20,000 <1% -0-
Sandra Abrams 174 <1% -0-
Advena Nominees Pty Ltd. 15,000 <1% -0-
Albatross Investment
Services Ltd. 24,000 <1% -0-
Anz Grindlays Nominee
Ltd Acct 1084 125,000 6.2% -0-
William C. Arthur 400 <1% -0-
Australasian Syndication
Management Services Pty Ltd. 5,000 <1% -0-
Ray Barnes 10,000 <1% -0-
Raymond G. Barnes 11,000 <1% -0-
James F. Barton 330 <1% -0-
Berenes Nominees Pty Ltd. 4,000 <1% -0-
John K. Beumee 100 <1% -0-
Betty M. Billingsley 140 <1% -0-
Alex Boardman 100 <1% -0-
Gerald E. Boatright 2,500 <1% -0-
The Equitable Life
Assurance Society 840,000 10.5% -0-
Pamela Anne Boucher 5,845 <1% -0-
Robert G. Boucher 1,000 <1% -0-
Sharon Kay Braden 128 <1% -0-
Timothy K. Bradley 1,200 <1% -0-
Michael Thomas Breitbart 250 <1% -0-
Randall S. Brich 1,000 <1% -0-
Kathleen H. Brinkhaus 200 <1% -0-
George Brunacini 200 <1% -0-
BSI (Channel Islands) Ltd. 22,000 <1% -0-
John V. Buglewicz TTEE
John V. Buglewicz Self
Emp Ret. Acct. 200 <1% -0-
CIBC Eyres Reed Australian
Resources Fund 725,000 9.0% -0-
David M. Carroll 300 <1% -0-
Betsy Ann Carulli 2,500 <1% -0-
Cede & Co. 701,500 9.0% -0-
Rosanna Chang 2,000 <1% -0-
C M S & Co. A Partnership 100 <1% -0-
Cornwall Holdings Pty Ltd. -0- <1% -0-
Ben S. Curtis 800 <1% -0-
Victor L. Damon 208 <1% -0-
David Jones-Prichard 4,000 <1% -0-
Derain Pty Ltd. 15,000 <1% -0-
Douglas Financial Consultants 30,000 <1% -0-
Evan Duval & Ann Duval JTWROS 200 <1% -0-
Charles E. Dyke &
Geraldine Dyke JTWROS 174 <1% -0-
Economic Consultants Pty Ltd. 10,000 <1% -0-
Charlotte Edberg 200 <1% -0-
Energy Minerals Corporation 866 <1% -0-
Bruce E. Engquist 208 <1% -0-
Ken Erikson 100 <1% -0-
Europo Investment Services Ltd. -0- <1% -0-
Christopher Anthony Evans -0- <1% -0-
Exchange Nominees Pty Ltd. 98,090 <1% -0-
Falcon Resources Pty Ltd. 26,000 <1% -0-
Alvern K. Gardner 950 <1% -0-
Omer R. Gaskins TTEE
Omer R. Gaskins Trust 100 <1% -0-
Richard Gaver 100 <1% -0-
Gaye Anne Davies -0- <1% -0-
James Gilsdorf 350 <1% -0-
Golden Prospect Plc. -0- <1% -0-
Graceview Pty Ltd.
Superannuation 5,000 <1% -0-
Graceview Pty Ltd. 5,000 <1% -0-
David A. Graham 100 <1% -0-
David Graham 100 <1% -0-
Green River Resources Ltd. 25,000 <1% -0-
John W. Green 1,100 <1% -0-
Sarah L. Grove 120 <1% -0-
Ross Haldane & Catherina
Haldane JTWROS 2,000 <1% -0-
Stanley B. Hallman Tr. FBO
Andrea Ann Boucher Trust 6,192 <1% -0-
Stanley B. Hallman Tr. FBO
Denise Ann Boucher Trust 6,192 <1% -0-
Jack K. Hallowell & Colene
N. Hallowell JTWROS 100 <1% -0-
Hare & Co. 75,000 <1% -0-
Richard L. Hawkins 304 <1% -0-
Hill Young & Associates -0- <1% -0-
Richard James Hill -0- <1% -0-
Timothy L. Hoops & Linda
Sue Hoops JTWROS 5,000 <1% -0-
Timothy L. Hoops 14,110 <1% -0-
Valerie Hundley 140 <1% -0-
Hydra Energy Services Pty Ltd. -0- <1% -0-
Ivanhoe Pty Ltd. 1,000 <1% -0-
James Capel Asset Management -0- <1% -0-
James Capel Investment Mgmt. 248,000 <1% -0-
D. Robert Johnson 2,300 <1% -0-
B. Todd Jones & Marguerite
L. Jones JTWROS 160 <1% -0-
Gilbert E. Jones Jr. 170 <1% -0-
Rosemary P. Kelley &
Kevin C. Kelley JTWROS 160 <1% -0-
Judith S. Kennedy 400 <1% -0-
Verne C. Knight TTEE
Verne C. Knight TR UA
Dtd. Dec. 27, 1973 62,581 <1% -0-
George M. Kolman Jr. 100 <1% -0-
Nicholas Kondua 445 <1% -0-
Harry Kramer 200 <1% -0-
Lakes Oil NL 50,000 <1% -0-
Ezra Lamm 660 <1% -0-
John R. Lee 100 <1% -0-
Lippo Securities Limited -0- <1% -0-
Michael Thomas Loncar 160 <1% -0-
John E. Maas 126 <1% -0-
MacDougall MacDougall
& Mactier Inc. 40,000 <1% -0-
Hank Marohnich 320 <1% -0-
Maryanne Louisa Young -0- <1% -0-
Jim McCall 250 <1% -0-
Evelyn M. Mitchell 106 <1% -0-
MJH Nightingale & Co. Ltd. 4,000 <1% -0-
Moco Resources Inc. 100 <1% -0-
Montgomery Burns Pty Ltd. 8,000 <1% -0-
W. Bruce Moore 200 <1% -0-
Steven Moschonas 1,000 <1% -0-
William Moskovits 340 <1% -0-
Narrow Lane Pty Ltd. 15,000 <1% -0-
Gerald L. Nelson 100 <1% -0-
Nieuport Pty Ltd. 60,000 <1% -0-
Nightingale Development
Capital 4,000 <1% -0-
Alan W. Noyes 120 <1% -0-
NT MacLachlan 50,000 <1% -0-
James Omalley 560 <1% -0-
Oyama Pty Ltd. -0- <1% -0-
Robert B. Perry & Patricia
S. Perry JTWROS 1,100 <1% -0-
Tom Phillips 500 <1% -0-
Philomena Pty Ltd. -0- <1% -0-
C.F. Pofahl 1,318 <1% -0-
Russell A. Pomeroy 800 <1% -0-
Ron Prefontaine 2,000 <1% -0-
Mary Loren Pruit Trust 100 <1% -0-
Sally Lynn Pruit Trust 124 <1% -0-
Thomas Branch Pruit Trust 100 <1% -0-
Jonathan M. Roitman 100 <1% -0-
Steven A. Roitman 2,000 <1% -0-
J. Mark Roper 100 <1% -0-
Michele R. Rounds 660 <1% -0-
Samson Exploration N.L. 1,263,000 15.8% -0-
Hill Samuel Bank (Jersey) Ltd. -0- <1% -0-
Al Sayers 1,000 <1% -0-
Cleone E. Sayers 1,000 <1% -0-
Anthony E. Schiffer & Mary
B. Schiffer JTWROS 400 <1% -0-
Morin M. Scott 600 <1% -0-
Larry O'Connor & Ellen
O'Connor TTEES Shamrock
Fibers Inc. Pen PL 200 <1% -0-
Shertim Investments Pty Ltd. 24,000 <1% -0-
Shertim Pty Ltd. 20,420 <1% -0-
Hanish Smith 5,000 <1% -0-
Larry D. Smith 350 <1% -0-
Stenbank Pty Ltd. 10,000 <1% -0-
Marie T. Sullivan 116 <1% -0-
James M. Swanson 550 <1% -0-
Syrops & Co. Pty Ltd. 5,000 <1% -0-
L.R. Tanner & B.A. Tanner JTWROS 490 <1% -0-
Randy L. Tanner 135 <1% -0-
E.A. Teas 830 <1% -0-
Teddy Bear Shop London Ltd. 5,000 <1% -0-
Thomas Phillip John Conn. 10,000 <1% -0-
Jane M. Tibbs 400 <1% -0-
Joseph A. Tibbs 400 <1% -0-
David A. Todd 200 <1% -0-
Louis G. Trilikis & Betty
A. Trilikis JTWROS 100 <1% -0-
Louis G. Trilikis 100 <1% -0-
Estelle Trubow Leslie Trubow &
Marshall Trubow Jt. Ten. 100 <1% -0-
Donald Tulloch 5,000 <1% -0-
William Tulloch 5,000 <1% -0-
Kenneth Lewis Tulloch 5,000 <1% -0-
Johnnie L. Tyler 240 <1% -0-
Ronald D. Vanderhoef & Kathy
J. Vanderhoef JTWROS 200 <1% -0-
Ronald D. Vanderhoef C/F Tyler
H. Vanderhoef UGMA WY 320 <1% -0-
Ronald D. Vanderhoef C/F Christian
J. Vanderhoef UGMA WY 320 <1% -0-
Emily Vaughan-Spruce 1,250 <1% -0-
Ian Vaughan-Spruce 1,250 <1% -0-
Isabel Vaughan-Spruce 1,250 <1% -0-
Rufus Vaughan-Spruce 1,250 <1% -0-
Victoria International
Petroleum NL 105,200 1.3% -0-
VLH Pty Ltd. TTEE VLH Pty
Ltd. Superannuation Fund 10,000 <1% -0-
VLH Pty Ltd. -0- <1% -0-
Charles Don Wachtman 100 <1% -0-
Mike A. Wachtman 200 <1% -0-
Suzan Debra Wagner 3,000 <1% -0-
Carol Waltz 10,000 <1% -0-
Wendell C. Weaver 200 <1% -0-
Theodore B. Zimmerman 420 <1% -0-
</TABLE>
PLAN OF DISTRIBUTION
The securities, shares of common stock and warrants, offered hereby
may be sold by the selling shareholders or by their respective pledgees,
donees, transferees or other successors in interest. Such sales may be
made at fixed prices that may be changed, at market prices prevailing at
the time of sale, at prices related to such prevailing market prices, or
at negotiated prices. The securities may be sold by one or more of the
following:
o one or more block trades in which a broker or dealer so
engaged will attempt to sell all or a portion of the securities
held by the selling shareholders as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
o purchase by a broker or dealer as principal and resale by
such 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 between the selling
shareholders and purchasers without a broker-dealer.
The selling shareholder may effect such transactions by selling
securities to or through broker-dealers, and such broker-dealers will
receive compensation in negotiated amounts in the form of discounts,
concessions, commission or fees from the selling shareholders and/or the
purchasers of the securities for whom such broker-dealers may act as agent
or to whom they sell as principal, or both (which compensation to a
particular broker-dealer might be in excess of customary commissions).
Such brokers or dealers or other participating brokers or dealers and the
selling shareholders may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933, in connection with such sales. Except for
customary selling commissions in ordinary transactions, any such
underwriter or agent will be identified, and any compensation paid to such
persons will be described, in a prospectus supplement. In addition, any
securities covered by this prospectus that qualify for sale pursuant to
Rule 144 might be sold under Rule 144 rather than pursuant to this
prospectus.
To comply with some states' securities laws, if applicable, the
securities may be offered or sold by the selling shareholders in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in some states the securities may not be offered or sold by the
selling shareholders unless they have been registered or qualified for
sale in such states or an exemption from registration or qualification is
available and is complied with.
EXPERTS
The consolidated financial statements of Kestrel Energy, Inc. as of
June 30, 1999 and 1998, and for each of the years in the three-year period
ended June 30, 1999, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP,
independent certified public accountants, also incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
LEGAL MATTERS
The validity of the common stock and warrants offered by this
prospectus will be passed upon for us by Gorsuch Kirgis LLP, Denver,
Colorado.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table shows the estimated expenses to be incurred in
connection with the issuance of the securities being registered by us:
Registration Fee--Securities and Exchange Commission $ 2,103
Nasdaq Notification Fee--The Nasdaq Stock Market, Inc. $ 7,500
Printing and Mailing Costs and Fees $ 6,500
Accountants' Fees and Expenses $ 5,000
Legal Fees and Expenses $ 25,000
Miscellaneous $ 3,897
-------
Total Costs $ 50,000
=======
All of the above expenses except the SEC registration fee are
estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Colorado Business Corporation Act provides at Article 109 for
indemnification by a corporation of officers and directors in connection
with proceedings brought against them by reason of their position with the
corporation the person being indemnified must, in civil matters, have
acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the corporation. In criminal
matters, indemnification is permitted where the person had no reasonable
cause to believe that his or her conduct was unlawful. Indemnification is
required (unless limited by a corporation's Articles of Incorporation)
where the officer or director is wholly successful, on the merits or
otherwise, in the defense of any proceeding. The Act also establishes
procedures by which persons seeking indemnification can obtain cost
advances from the corporation and procedures by which indemnification
determinations can be made.
Article VI of Kestrel's Amended and Restated Articles of
Incorporation requires us to indemnify to the fullest extent permitted by
applicable law against all liability and expense, including attorneys'
fees, incurred by reason of the fact that a person is or was a director or
officer of Kestrel.
Article V of Kestrel's Amended and Restated Bylaws contains
provisions requiring indemnification by the corporation of officers and
directors where the person seeking indemnification acted in good faith and
in a manner reasonably believed to be in the best interest of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Indemnification by
us is also required in connection with derivative actions where the party
seeking indemnification is found to have acted in good faith and in a
manner he reasonably believed to be in the best interest of Kestrel.
Finally, indemnification is required where the officer or director seeking
indemnification has been successful on the merits in the defense of the
action. The Bylaws also contain provisions setting forth procedures by
which parties seeking indemnification may obtain payment in advance of
expenses incurred by them.
The above discussion of the Colorado Business Corporation Act,
Kestrel's Amended and Restated Articles of Incorporation and Kestrel's
Amended and Restated Bylaws is intended to be only a summary and is
qualified in its entirety by the full text of each of the foregoing.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
4.1 Amended and Restated Articles of Incorporation, as filed
with the Secretary of State of Colorado on March 16, 1995, filed
as Exhibit (3)1 to the Annual Report on Form 10-K/A for the
fiscal year ended June 30, 1994 and incorporated herein by
reference.
4.2 Amended and Restated Bylaws, as adopted by the Board of
Directors on January 16, 1995, filed as Exhibit (3)2 to the
Annual Report on Form 10-K/A for the fiscal year ended June 30,
1994 and incorporated herein by reference.
4.3 The form of common stock share certificate filed as
Exhibits 5.1 to the Registrant's Form S-2 Registration Statement
under the Securities Act of 1933, as amended, Registration No. 2-
65317 and incorporated herein by reference.
4.4 The form of Warrant Certificate issued as a dividend
distribution to shareholders of record at the close of business
on February 4, 2000, filed as Exhibit 4.2, on Form 8/A, File No.
0-9261 on January 20, 2000, and incorporated hereby by
reference.
4.5 That portion entitled "Selling Restrictions" of the
Registrant's Private Placement Memorandum dated November 12,
1999.
5 Opinion of Gorsuch Kirgis LLP
23.1 Consent of KPMG LLP.
23.2 Consent of Gorsuch Kirgis LLP is contained in its opinion
filed as Exhibit 5
ITEM 17. UNDERTAKINGS
We undertake:
(a) 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;
(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; 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)(i) and (a)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by us pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act 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.
(c) 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.
(d) For the purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as a part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed us pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be a part of
this registration statement as of the time it was declared effective.
(e) For the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus 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.
(f) We hereby undertake that, for purposes of determining any
liability under the Act, each filing of Kestrel's annual report pursuant
to section 13(a) or section 15(d) of the Exchange Act, and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Exchange Act, 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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and controlling
persons pursuant to the foregoing provisions, or otherwise, we have been
advised 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. In the event that a claim for
indemnification against such liabilities, other than the payment by us of
expenses incurred or paid by a director, officer or controlling person of
Kestrel in the successful defense of any action, suit or proceeding, is
asserted by that director, officer or controlling person in connection
with the securities being registered, we will, unless in the opinion of
our 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 and will be governed by the final adjudication of such
issue.
Signatures
Pursuant to the requirements of the Securities Act of 1933, 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 Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in City of Denver, State of Colorado, on the
28th day of February, 2000.
KESTREL ENERGY, INC.
By:/s/ Timothy L. Hoops
-----------------------------------
Timothy L. Hoops, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signatures Title Date
---------- ----- ----
/s/Timothy L. Hoops President, Chief Executive February 28, 2000
- ----------------------- Officer, Principal Executive
Timothy L. Hoops Officer, and Director
/s/Mark A. Boatright Vice President-Finance, February 28, 2000
- ----------------------- Chief Financial Officer,
Mark A. Boatright Principal Financial and
Accounting Officer and Director
/s/Robert J. Pett Chairman of the Board February 28, 2000
- -----------------------
Robert J. Pett
/s/John T. Kopcheff Vice President-International February 28, 2000
- ----------------------- and Director
John T. Kopcheff
/s/Kenneth W. Nickerson February 28, 2000
- ----------------------- Director
Kenneth W. Nickerson
/s/Mark A.E. Syropoulo February 28, 2000
- ----------------------- Director
Mark A.E. Syropoulo
EXHIBIT INDEX
The following documents are filed here with electronically.
No. Description
- --- -----------
4.5 That portion entitled "Selling Restrictions" of the Registrant's
Private Placement Memorandum dated November 12, 1999
5 Opinion of Gorsuch Kirgis LLP
23.1 Consent of KPMG LLP
GORSUCH KIRGIS LLP
Attorneys at Law
Tower I, Suite 1000 1515 Arapahoe Street Denver, Colorado 80202
Telephone (303) 376-5000 Facsimile (303) 376-5001
February 28, 2000
Kestrel Energy, Inc.
999 18th Street, Suite 2490
Denver, Colorado 80202
Re: Kestrel Energy, Inc.
Registration Statement on Form S-3
Gentlemen:
We are counsel to Kestrel Energy, Inc., a Colorado corporation (the
"Company"), in connection with the preparation of a Registration Statement
on Form S-3 filed with the Securities and Exchange Commission on February
29, 2000 (the "Registration Statement"), relating to a proposed offering
by the Selling Shareholders to the public of a maximum of 2,786,271 shares
of the Company's Common Stock, no par value (the "Common Stock") and
728,250 warrants to purchase the Common Stock at an exercise price of
$3.125 per share (the "Warrants").
In this connection, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of such corporate records,
certificates and written and oral statements of officers, legal counsel
and accountants of the Company and of public officials, and other
documents that we have considered necessary and appropriate for this
opinion, and, based thereon, we advise you that, in our opinion:
1. The Company is a corporation duly organized and validly existing
under the laws of the State of Colorado; and
2. The Common Stock, when sold pursuant to and in accordance with
the Registration Statement, will be validly issued, fully paid and
nonassessable.
3. The Warrants, when sold pursuant to and in accordance with the
Registration Statement, will be validly issued, fully paid and
nonassessable.
4. The shares of Common Stock, when issued upon exercise of the
Warrants in accordance with the terms thereof, will be validly issued,
fully paid and nonassessable.
We hereby consent to the use of our name beneath the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement
and to the filing of this opinion as Exhibit 5 thereto.
Very truly yours,
GORSUCH KIRGIS LLP
/s/Gorsuch Kirgis LLP
Consent of Independent Auditors
The Board of Directors
Kestrel Energy, Inc.:
We consent to the incorporation by reference in the registration statement
on Form S-3 of Kestrel Energy, Inc. of our report dated September 10, 1999
relating to the consolidated balance sheets of Kestrel Energy, Inc. and
subsidiaries as of June 30, 1999 and 1998, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of
the years in the three-year period ended June 30, 1999, which report
appears in the June 30, 1999 Annual Report on Form 10-K of Kestrel Energy,
Inc. and to the reference to our firm under the heading "Experts" in the
registration statement.
/s/KPMG LLP
KPMG LLP
Denver, Colorado
February 28, 2000
SELLING RESTRICTIONS
The Shares have not been and will not be registered under the United
States Securities Act of 1933, as amended (the "Securities Act"), or with
any securities regulatory authority of any state or territory within the
jurisdiction of the United States, and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons,
except in accordance with Regulation S under the Securities Act. The
Shares will be placed in accordance with Rule 903 of Regulation S (as
provided below) under the Securities Act and in compliance with the
offering restrictions requirement of Regulation S. (Terms used herein
have the meanings given to them by Regulation S.) Each person that
purchases a share in this Issue will receive a share certificate bearing a
legend substantially to the following effect:
"THE SHARES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES
ACT), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE
OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE
OFFERED AND SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT. TERMS USED ABOVE HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S AS PROMULGATED BY THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION."
An offer or sale of Shares within the United States except as
described above, may violate the registration requirements of the
Securities Act. The U.S. Securities and Exchange Commission (the "SEC")
has recently amended Regulation S to change the holding period for resales
back into the United States from forty (40) days to one (1) year.
Securities sold under Regulation S are now classified as "restricted
securities" subject to the resale restrictions of Rule 144. As a result,
unless the Shares acquired in this Issue are registered with the SEC for
resale, purchasers of Shares may not resell their Shares into the United
States or to United States persons except in accordance with the volume
limitations, manner of sale, and filing requirements of Rule 144 after the
one (1) year holding period. As a result, the Company has agreed to file
a Form S-3 registration statement with the SEC covering the Shares sold
hereunder as soon as practicable after the close of this Issue. The
effect of such registration, when it is declared effective by the SEC,
will be to remove all restrictions on resales into the U.S. by purchasers
in the Issue other than a prospectus delivery requirement. There can be
no assurance as to how quickly the SEC will exercise its discretionary
authority to register the Shares. In the Company's last registration of
Shares that had been previously issued in a Regulation S offering, the
registration statement was declared effective only 35 days after the close
of the Issue. In the preceding instance, however, the Shares were not
registered until 75 days after the registration statement was first filed
with the SEC. While the Company will make its best efforts to effect a
prompt registration of the Shares for resale, the recent advent of "Plain
English" review of registration statements by the SEC has delayed the
registration process for many issuers by an additional thirty (30) days or
more.
Generally speaking, in the absence of an effective registration with
the SEC, purchasers of the Shares may sell their Shares into the U.S. only
under Rule 144. In general, under Rule 144 as currently in effect, an
"affiliate" of the Company, or a person who has beneficially owned shares
which are "restricted securities" for at least one year, is entitled to
sell within any three-month period a number of shares that does not exceed
the greater of: (i) one percent (1%) of the then outstanding shares of
Common Stock of the Company, or (ii) the average weekly trading volume of
the Common Stock during the four calendar weeks preceding a sale by such
person. Sales under Rule 144 are also subject to certain manner of sale
provisions, notice requirements and the availability of current public
information about the Company. Under Rule 144(k), however, a person who
is not, and for the three months prior to the sale of such shares has not
been, an "affiliate" of the Company is free to sell shares which are
"restricted securities" which have been held for at least two years
without regard to the limitations contained in Rule 144.
Kestrel, and each participating broker, if any ("Seller") (i) will
not offer or sell any Shares in the United Kingdom, by means of any
document, other than to persons whose ordinary business it is to buy or
sell shares or debentures, whether as principal or agent (or in
circumstances which do not constitute an offer to the public within the
meaning of the Companies Act 1985); (ii) has complied and will comply with
all applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Shares in, from or otherwise
involving the United Kingdom; and (iii) has only issued or passed on and
will only issue or pass on in the United Kingdom this document or any
other document received by it in connection with the issue of the Shares
to a person who is of a kind described in Article 9(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1988 or
is a person to whom the document may otherwise lawfully be issued and
passed on.
Seller will comply with all applicable securities laws and
regulations in each jurisdiction in which it offers, sells or delivers
Shares and will ensure that no obligations are imposed on the Company in
any such jurisdiction as a result of any of the foregoing actions. Seller
will obtain any consent, approval or permission required of it for the
offer, sale or delivery by it of Shares under the laws and regulations in
force in any jurisdiction to which it is subject or in or from which it
makes any offer, sale or delivery. No one is authorized to make any
representation or use any information in connection with the issue,
subscription and sale of the Shares that is inconsistent with that
contained in this document.
The purchase of shares is subject to completion, execution and
satisfactory review of the Offshore Securities Subscription Agreement
attached hereto.
In addition to the purchase price, purchasers of Shares in this Issue
may be required to pay stamp taxes and other charges in accordance with
the laws and practices of the country of purchase.
