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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
THE EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
500 NORTH LOOP 1604 EAST, SUITE 250, SAN ANTONIO, TEXAS 78232
(Address of principal executive offices)
(210) 496-5300
(Registrant's telephone number, including area code)
COLORADO 0-9120 84-0793089
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
Date of Report (Date of Earliest Event Reported): MAY 31, 1996
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective May 31, 1996, the Company entered into agreements with
several foreign investors involving the exchange of 3,498,485 shares of its
common stock for a twenty-five percent (25%) interest in 129,551.12 acres of
oil and gas leases and $1,750,000 cash.
Under terms of the agreements, each of the parties listed below (the
"Purchasers") exchanged its individually owned five percent (5%) undivided
leasehold working interest (total 25% working interest) in certain Oil and Gas
Leases in the Williston Basin covering a total of 129,551.12 net acres, more
or less, in the counties of Stark, Hettinger, Slope, Billings, Golden Valley
and Bowman Counties of North Dakota and in Fallon, Richland and Wibaux
Counties of Montana for 2,498,485 shares of the Company's common stock under
Regulation S as promulgated under the Securities Act of 1933, as amended ("the
Act"). None of the purchasers are US persons under the meaning of Rule 902
promulgated under the Act. Of the total acres, 59,654.54 acres has been paid
in full by the Purchasers and assigned to the Company while the remaining
69,896.58 acres, more or less, are under contract to the Purchasers and are to
be purchased and assigned to the Company over the next ninety days. The price
of the leases was placed at $135.00 per acre which is the cash price paid by
the Purchasers plus $10.00 per acre.
Lease Transaction Concluded as of May 31, 1996:
<TABLE>
<CAPTION>
Non-US Person Interest Acres Basis Shares Issued
------------- -------- ----- ----- -------------
<S> <C> <C> <C> <C>
Comstar BioCapital, Inc. 5% 59,654.54 $420,668.15 230,096
TransEuro Capital, Inc. 5% 59,654.54 $420,668.15 230,096
Pan Pacific Investments, Inc. 5% 59,654.54 $420,668.15 230,096
Sorbus Investments, Inc. 5% 59,654.54 $420,668.15 230,096
John L. Hales, Individually 5% 59,654.54 $420,668.15 230,096
-- --------- ----------- -------
Totals 25% 59,654.54 $2,103,340.75 1,150,480
</TABLE>
Lease Transaction To Be Concluded within 90 days:
<TABLE>
<CAPTION>
Shares
Non-US Person Interest Acres Basis To Be Issued
------------- -------- ----- ----- ------------
<S> <C> <C> <C> <C>
Comstar BioCapital, Inc. 5% 69,896.58 $471,801.92 269,601
TransEuro Capital, Inc. 5% 69,896.58 $471,801.92 269,601
Pan Pacific Investments, Inc. 5% 69,896.58 $471,801.92 269,601
Sorbus Investments, Inc. 5% 69,896.58 $471,801.92 269,601
John L. Hales, Individually 5% 69,896.58 $471,801.92 269,601
-- --------- ----------- -------
Totals 25% 69,896.58 $2,359,009.60 1,348,005
</TABLE>
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Concurrently, Comstar BioCapital, Inc., for itself and its clients,
agreed to purchase 600,000 shares of the Company's common stock at $1.75 per
share for a total consideration of $1,050,000 cash. Additionally, Comstar
BioCapital, Inc., for itself and its clients, granted the Company a put option
that will require Comstar to purchase, if the Company so desires, an
additional 400,000 shares of its common stock for $700,000 cash at any time up
to and including October 1, 1996 provided the Company has acquired a
twenty-five percent (25%) interest in not less than 100,000 net acres of the
129,551.12 net acres that the Company is acquiring for common stock.
As of May 31, 1996, the Company has acquired leases valued at $2,103,340 and
anticipates receiving by June 21, 1996, $1,050,000 cash in exchange for
1,750,480 shares of its common stock thereby increasing its issued and
outstanding shares total to 7,484,115 shares.
Should the remaining transactions close as contemplated, the Company will
acquire additional leases valued at $2,359,010 and an additional $700,000 cash
in exchange for issuing a total of 1,748,005 additional shares which would
increase the issued and outstanding shares total of the Company to 9,232,120
shares.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE EXPLORATION COMPANY
(Registrant)
/s/ James E. Sigmon
---------------------
James E. Sigmon
President
Date: June 14, 1996
