UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: December 13, 1999
POWER EXPLORATION, INC
----------------------
(Exact name of registrant as specified in its charter)
NEVADA
------
(State or other jurisdiction of incorporation or organization)
000-09419 84-0811647
--------- ----------
(Commission File Number) (IRS Employer Identification Number)
5416 BIRCHMAN AVENUE
FORT WORTH, TEXAS 76107
-----------------------
(Address of principal executive offices)
(817) 377-4460
--------------
(Registrant's telephone number, including area code)
N/A
(Former name or address, if changed since last report)
1
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 9, 1999 the Registrant acquired approximately 32 sets of
oil leases, representing mineral rights to approximately Two Hundred Forty (240)
producing oil wells, as well as approximately 39 injection wells, in the
Corsicana Shallow Field, Navarro County, Texas (collectively, the "Oil Leases").
The Registrant acquired the Oil Leases from Rife Oil Properties, Inc., a Nevada
corporation ("Rife Oil"), as set forth in the attached Acquisition Agreement,
Exhibit A. By the same agreement, the Registrant also acquired approximately
$950,000 of debt owed to Rife Oil. In exchange for both the Oil Leases and the
debt, the Registrant paid a total of Nine Million (9,000,000) shares of its
common stock, restricted under Rule 144 of the Securities Act of 1933. The
source of the stock used to make the purchase was from the Registrant's
authorized but unissued common stock. The purchase price was determined based on
the fact that the closing price of Registrant's common stock on the OTC-BB was
$2 5/8 as of 12/9/99, the stock used to purchase the assets was restricted and
therefore valued at half its market price, and its estimate that the Oil Leases
and the debt together were worth approximately $11.8 million. Moreover, the
purchase price was based on estimates of potential production from certified
engineers that the undiscounted cash flow derived from these leases could exceed
$200 million over a five year period. M.O. Rife III is the Chairman of the Board
of Directors of the Registrant, and is also President and majority owner of Rife
Oil Properties, Inc. Rife used the leases as part of its business of oil
exploration and production, and Registrant intends to continue using the leases
as part of its oil exploration and production business.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are included:
Exhibit 1. Acquisition Agreement dated December 8, 1999, by and between
Power Exploration, Inc. and Rife Oil Properties, Inc.
Exhibit 2. Financial Statements to be filed with an amendment hereto within
sixty (60) days.
Pursuant to the requirement of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 13, 1999
POWER EXPLORATION, INC.
BY: /s/
----------------------------
Name: Joe Bill Bennett
Title: President
2
Exhibit 1
ACQUISITION AGREEMENT
BETWEEN
POWER EXPLORATION, INC.
AND
RIFE OIL PROPERTIES, INC.
3
<PAGE>
ACQUISITION AGREEMENT
TABLE OF CONTENTS
Purchase and Sale..............................................................2
Purchase Price.................................................................2
Warranties and Representations of Rife.........................................2
Warranties and Representations of Power........................................5
Term...........................................................................6
Conditions Precedent to Closing................................................6
Termination.....................................................................
Exhibits.......................................................................7
Miscellaneous Provisions.......................................................7
Closing........................................................................7
Governing Law..................................................................7
Counterparts...................................................................7
1
<PAGE>
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT dated December 8, 1999, by, between and
among POWER EXPLORATION, INC., A NEVADA CORPORATION ("POWER"), AND RIFE OIL
PROPERTIES, INC., A corporation, ("Rife").
WHEREAS, Rife owns an interest in various oil properties and drilling
leases and holds an obligation owed to it by Power in the approximate amount of
$950,000 and has an interest in settlement of the debt and sale of the oil
properties and drilling leases; and
WHEREAS, Rife desires to sell and Power desires to purchase the various
oil properties and drilling leases and debt owed to Rife by Power, all for the
transfer of a total of Nine Million (9,000,000) shares of the common stock of
Power to Rife;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:
I. PURCHASE AND SALE. Rife hereby agrees to sell, transfer, assign and
convey to Power, and ------------------ Power hereby agrees to
purchase and acquire from Rife, each and every interest, including any
and all rights held by Rife, in the properties listed on Exhibit "A"
as attached hereto and hereinafter identified as the Oil Properties
and Leases, in exchange for Eight Million (8,000,000) shares of common
stock in Power. Rife further agrees to sell, transfer, assign and
convey to Power each and every debt and obligation that exists between
the parties, estimated to be a value of $950,000, and Power hereby
agrees to purchase such debt and obligations in exchange for One
Million (1,000,000) shares of common stock in Power.
II. PURCHASE PRICE. The aggregate purchase price to be paid by Power for
the properties and rights listed on Exhibit "A," the Oil Properties
and Leases, shall be Eight Million (8,000,000) shares of common stock
in Power; and as compensation for the satisfaction of existing debts
and obligations in the estimated amount of $950,000, Power shall
transfer to Rife One Million (1,000,000) shares of common stock in
Power.
III. WARRANTIES AND REPRESENTATIONS OF RIFE. In order to induce Power to
enter into the Agreement and to complete the transaction contemplated
hereby, Rife warrants and represents to Power that:
A. ORGANIZATION AND STANDING. Rife is a corporation duly
organized, validly existing and in good standing under the
laws of the State of its incorporation, is qualified to do
business as a foreign corporation in every other state or
jurisdiction in which it operates to the extent required by
the laws of such states and jurisdictions, and has full power
and authority to carry on its business as now conducted and to
own and operate its assets, properties and business. Attached
hereto as Exhibit "C" are true
2
<PAGE>
and correct copies of the leases, deeds or other document to
evidence the interests of Rife set forth in Exhibit "A." No
changes or conveyances will be made in any of the Exhibit "C"
documents before the Closing.
B. OWNERSHIP OF THE OIL PROPERTIES AND LEASES. As of the Date
hereof, Rife is the sole owner of the interests set forth in
Exhibit "A", free and clear of all liens, encumbrances and
restrictions of any nature whatsoever, except as set forth in
the documents contained in Exhibit "C" and is the sole holder
of the debts and obligations of Power to Rife as set forth in
Exhibit "D" which are to be released pursuant to the terms
provided for herein.
C. TAXES. Rife has filed all federal, state and local income or
other tax returns and reports that it is required to file with
all governmental agencies, wherever situate, and has paid or
accrued for payment all taxes as shown on such returns, such
that a failure to file, pay or accrue will not have a material
adverse effect on Rife or the Oil Properties and Leases.
D. PENDING ACTIONS.There are no material legal actions, lawsuits,
proceedings or ---------------- investigations, either
administrative or judicial, pending or to the knowledge of
Rife threatened, against or affecting Rife and/or the Oil
Properties and Leases or the obligations set forth in
Exhibit "D.". Rife is not in violation of any material law,
ordinance or regulation of any kind whatever, including, but
not limited to laws, rules and regulations governing the sale
of its products, oil and/or gas production rules, statutes
and regulations, the '33 Act, the Securities Exchange Act of
1934, as amended (the "34 Act") the Rules and Regulations of
the U.S. Securities and Exchange Commission ("SEC"), or the
Securities Laws and Regulations of any state.
E. GOVERNMENTAL REGULATION. Vaxcel Inc. holds the leases and
necessary registrations ------------------------ set forth on
Exhibit "A" hereto from the jurisdictions set forth therein,
which leases and registrations are all of the leases and
registrations necessary to permit the Corporation to conduct
its current business. All of such leases and registrations
are in full force and effect, and there are no proceedings,
hearings or other actions pending that may affect the validity
or continuation of any of them. No approval of any other trade
or professional association or agency of government other than
as set forth on Exhibit "E" is required for any of the trans-
actions effected by this Agreement, and the completion of the
transactions contemplated by the Agreement will not, in and
of themselves, affect or jeopardize the validity or contin-
uation of any of them.
F. OWNERSHIP OF ASSETS. Rife has good, marketable title, without
any liens or encumbrances of any nature whatever, to the Oil
Properties and Leases set forth in Exhibit "A" to be
transferred to Power, which shares represent one hundred
(100%) percent of the rights held by Rife in the Oil
Properties and Leases set forth in Exhibit "A."
3
<PAGE>
G. NO INTEREST IN SUPPLIERS, CUSTOMERS, LANDLORDS OR COMPETITORS.
To the knowledge of Rife, neither Rife nor any of its
Shareholders nor any member of their families have any
interest of any nature whatever in any supplier, customer or
landlord of the rights and interests set forth in Exhibit "A."
H. NO DEBT OWED BY RIFE TO LESSORS. Rife, to its knowledge, does
not owe any money, securities, or property to the lessors and
is current on all of its obligations created or existing
related to the rights and properties set forth in Exhibit "A."
I. OPERATING RECORDS. All of the Oil Properties and Leases's
books and records, including, without limitation, their books
of account, drilling records, distribution records and other
records of the Oil Properties and Leases are up-to-date,
complete and reflect accurately and fairly the conduct of
these interests in all material respects since the date Rife
acquired an interest therein.
J. NO MISLEADING STATEMENTS OR OMISSIONS. Neither the Agreement
nor any financial statement, exhibit, schedule or document
attached hereto, contains any materially misleading statement,
or omits any fact or statement necessary to make the other
statements or facts therein set forth not materially
misleading.
K. VALIDITY OF THE AGREEMENT. All corporate and other proceedings
required to be taken -------------------------
by Rife in order to enter into and to carry out the Agreement
have been duly and properly taken. No corporate or other
action on the part of Rife is required in connection with this
Agreement, or the transaction contemplated herein. The Agree-
ment has been duly executed by Rife, and constitutes the valid
and binding obligation of Rife, except to the extent limited
by applicable bankruptcy, reorganization, insolvency, mora-
torium or other laws relating to or affecting generally
the enforcement of creditors rights. The execution and
delivery of the Agreement and the carrying out of its purposes
will not result in the breach of any of the terms or
conditions of, or constitute a default under or violate Rife's
Certificate of Incorporation or document of undertaking, oral
or written, to which Rife is a party or is bound or may be
affected, nor will such execution, delivery and carrying out
violate any order, writ, injunction, decree, law, rule or reg-
ulation of any court, regulatory agency or other governmental
body; and the business now conducted by Rife can continue to
be so conducted after completion of the transaction cont-
emplated hereby.
L. ENFORCEABILITY OF THE AGREEMENT. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid,
and enforceable by Power according to their terms, except to
the extent limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws relating to or affecting
generally the enforcement of creditors rights and that at the
time of such execution and delivery, Power will have acquired
title in and to the
4
<PAGE>
Oil Properties and Lease set forth in Exhibit "A" free and
clear of all claims, liens and encumbrances, except as set
forth in the exhibits hereto.
M. OPERATING AND FINANCIAL STATEMENTS. The operating and
financial statements for the Oil Properties and Leases set
forth in Exhibit "A" for the previous twelve months shall be
attached hereto as Exhibit "H", such operating and financial
statements accurately describe the reported financial position
as of the dates thereof, in accordance with applicable legal
and accounting requirements.
IV. WARRANTIES AND REPRESENTATIONS OF POWER. In order to induce Rife to
enter into the Agreement and to complete the transaction contemplated
hereby, Power warrants and represents to Rife that:
A. ORGANIZATION AND STANDING. Power is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Nevada, is qualified to do business as a
foreign corporation in every other state in which it operates
to the extent required by the laws of such states, and has
full power and authority to carry on its business as now
conducted and to own and operate its assets, properties and
business.
B. NO MISLEADING STATEMENTS OR OMISSIONS. Neither the Agreement
nor any financial statement, exhibit, schedule or document
attached hereto or presented to Rife in connection herewith
contains any materially misleading statement, or omits any
fact or statement necessary to make the other statements of
facts therein set forth not materially misleading.
C. VALIDITY OF THE AGREEMENT. All corporate action and
proceedings required to be taken --------------------------
by Power in order to enter into and to carry out the
Agreement have been duly and properly taken. The Agreement
has been duly executed by Power, and constitutes a valid and
binding obligation of Power. The execution and delivery of
the Agreement and the carrying out of its purposes will not
result in the breach of any of the terms or conditions of,
or constitute a default under or violate, Power's
Certificate of Incorporation or By-Laws, or any agreement,
lease, mortgage, bond, indenture, license or other document
or undertaking, oral or written, to which Power is a party
or is bound or may be affected, nor will such execution,
delivery and carrying out violate any order, writ,
injunction, decree, law, rule or regulation of any court
regulatory agency or other governmental body.
D. ENFORCEABILITY OF THE AGREEMENT. When duly executed and
delivered, the Agreement and the Exhibits hereto which are
incorporated herein and made a part hereof are legal, valid,
and enforceable by Power according to their terms, and that at
the time of such execution and delivery, Power will have
acquired good, marketable title in and to the Oil Properties
and Leases acquired herein, free and clear of all liens and
encumbrances.
5
<PAGE>
V. TERM. All representations, warranties, covenants and agreements made
herein and in the exhibits attached hereto shall survive the
execution and delivery of the Agreement and payment pursuant
thereto.
VI. CONDITIONS PRECEDENT TO CLOSING.
A. The obligations of Power under the Agreement shall be and are
subject to fulfillment, prior to or at the Closing of each of
the following conditions:
1. That Rife and its management representations and
warranties contained herein shall be true and correct
at the time of closing date as if such
representations and warranties were made at such
time;
2. That Rife and its management shall have performed or
complied with all agreements, terms and conditions
required by the Agreement to be performed or complied
with by them prior to or at the time of Closing;
B. The obligations of Rife under the Agreement shall be and are
subject to fulfillment, prior to, at the Closing or subsequent
to the Closing of each of the following conditions:
1. That Power's representations and warranties contained
herein shall be true and correct at the time of
Closing as if such representations and warranties
were made at such time; and
2. That Power shall have performed or complied with all
agreements, terms and conditions required by the
Agreement to be performed or complied with by it
prior to or at the time of Closing.
VII. TERMINATION. The Agreement may be terminated at any time before, or at,
Closing by:
A. The mutual agreement of the parties;
B. Any party if:
1. Any provision of the Agreement applicable to a party
shall be materially untrue or fail to be
accomplished.
2. Any legal proceeding shall have been instituted or
shall be imminently threatening to delay, restrain or
prevent the consummation of the Agreement.
Upon termination of the Agreement for any reason, in accordance with the terms
and conditions set forth in this paragraph, each said party shall bear all costs
and expenses as each party has incurred, and no party shall be liable to the
other.
6
<PAGE>
VIII. EXHIBITS. All Exhibits attached hereto are incorporated herein by this
reference as if they were --------- set forth in their entirety.
IX. MISCELLANEOUS PROVISIONS. This Agreement is the entire agreement
between the parties in respect of the subject matter hereof, and there
are no other agreements, written or oral, nor may the Agreement be
modified except in writing and executed by all of the parties hereto.
The failure to insist upon strict compliance with any of the terms,
covenants or conditions of the Agreement shall not be deemed a waiver
or relinquishment of such right or power at any other time or times.
X. CLOSING. The Closing of the transactions contemplated by the Agreement
("Closing") shall take place at 1:00 P.M. on December 9, 1999. The
Closing shall occur at such place as the parties hereto shall agree
upon. At the Closing, all of the documents and items referred to herein
shall be exchanged.
XI. GOVERNING LAW. The Agreement shall be governed by and construed in
accordance with the internal laws of the State of Nevada.
XII. COUNTERPARTS. The Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together
shall constitute one and the same binding Agreement, with one
counterpart being delivered to each party hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the date and year above first written.
Power Exploration, Inc.
BY: /S/ JOE BENNETT
-----------------------
Joe Bennett
Its: President
Rife Oil Properties, Inc.
BY: /S/ M. O. RIFE III
-------------------------
M. O. Rife III
Its: President
7
<PAGE>
EXHIBIT "A"
RIFE OIL PROPERTIES, INC.
CORSICANA SHALLOW FIELD
NAVARRO COUNTY, TEXAS
LEASE
WORKING LEASE PROD. INJ.
RRG/# INTEREST ACREAGE WELLS WELLS
Brown #2 #00593 0.7840000 62.77 3 1
Brown #3 #00594 0.7840000 101.00 5 4
Tatum "A" #00606 0.7500000 40.00 1 0
J.N. Edena #01294 0.8125000 56.38 8 2
J.E. Davant #01689 0.8125000 18.75 5 1
Pat Collins #01775 0.7343750 56.10 1 0
Blankenship #02032 0.8125000 283.90 10 1
Glasgow #02033 0.8125000 68.20 11 0
First Nat'l Bank #02212 0.7812500 153.40 14 0
Davant "B" #02216 0.8125000 94.25 2 1
Kate Wright A-B #02231 0.8203110 98.00 12 0
McMullen #02281 0.8437500 40.01 3 0
A.D. Tucker, Jr. #02493 0.7871094 40.90 2 0
Allen, Shallow #00088 0.8450000 488.40 4 2
Ella Jackson #00089 0.8450000 *** 1 0
L.B. Allen #01283 0.8450000 *** 1 0
J.F. Allen #01286 0.8450000 *** 5 2
Baum II #00589 0.7646777 223.50 8 2
Baum III #00590 0.7236621 64.50 7 0
Harwell #01316 0.8750000 33.00 4 0
H. Pierce #01390 0.8450000 145.00 13 1
Chapman C #01407 0.7700000 546.00 13 1
Cavender B #01690 0.8150000 25.00 7 4
Pierce #01720 0.8450000 114.00 12 3
Chewning #00223 0.7200000 105.91 7 1
Barth #00261 0.7925000 132.70 13 2
South Mirus #00293 0.8150000 103.00 5
Universal Rundle #02380 0.7500000 97.60 12 2
Bertha McKinney #02416 0.8150000 60.00 9 2
C.I.F. "A" #02465 0.8033333 156.20 5 1
C.I.F. "C" #02534 0.8033333 *** 10
C.I.F. #02841 0.8033333 *** 27 6
* Four Allen Leases Equal of Total of 488.4 Acres.
* Three C.I.F. Leases Equal a Total of 156.2 Acres.
8
