SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) . . . . . .February 18, 1998
FIELDPOINT PETROLEUM CORPORATION
--------------------------------
(Exact Name of Registrant as Specified in its Charter)
COLORADO
--------
(State or Other Jurisdiction of Incorporation)
0-9435 84-0811034
------ ----------
(Commission File Number) (IRS Employer Identification Number)
1703 Edelweiss Drive 78613
- -------------------- -----
Cedar Park, Texas (Zip Code)
-----------------
(Address of principal executive offices)
Registrant's telephone number, including area code (512) 250-8692
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
FieldPoint Petroleum Corporation (The Company) consummated the purchase
of a 97.9% working interest, a 76.9565% net revenue interest in oil production,
and a 71.9565% net revenue interest in gas production, in the Shade lease. The
lease currently has 3 producing oil and gas wells; the Company also purchased
all equipment related to the three wells on the lease from Fred Bowman, Inc. The
Company paid $190,000 cash consideration for the equipment and the lease rights.
Closing of the acquisition took place on February 18, 1998, with the
effective date being March 1, 1998. The consideration paid was based upon a
competitive bid process.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements and pro forma financial information
(b) Exhibits
99.2 Press Release dated February 24, 1998
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 hereunto duly authorized.
FieldPoint Petroleum Corporation
(Registrant)
By: /s/ Ray D. Reaves
---------------------------
President
Dated: May 1, 1998
<PAGE>
EXHIBIT 99.2
Tuesday February 24, 9:00 a.m. Eastern Time
Company Press Release
SOURCE: FieldPoint Petroleum Corporation
FieldPoint Petroleum Corporation Announces Completion of Oil and Gas Property
Acquisition
AUSTIN,TX Feb. 24/PRNewswire/ -- FieldPoint Petroleum Corporation (OTC Bulletin
Board: FPPC) announced today that it has completed the acquisition of a certain
oil and gas producing property in the state of Texas. The property was acquired
from Fred Bowman, Inc. The Company paid $190,000 cash consideration for the
lease rights.
FieldPoint, through a wholly owned subsidiary, acquired a 97.9% working interest
in the 320 acre Shade lease which currently has 3 producing oil and gas wells.
The Company, through its subsidiary, will take over operations effective March
1, 1998. Thereafter, FieldPoint will evaluate whether additional reserves can be
developed by using horizontal well technology.
Ray D. Reaves, President and Chief Executive Officer of FieldPoint Petroleum
stated, " This acquisition is a part of the Company's continuing program of
growth through exploration and development as well as acquisitions of producing
and non-producing oil and gas properties."
FieldPoint Petroleum Corporation is an oil and gas exploration and production
company whose principal operations are conducted in Texas and Wyoming.
Additional public information regarding FieldPoint Petroleum Corporation is
available at the Securities and Exchange Commissions World Wide Wed site at
http://www.sec.gov
- ------------------
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
FieldPoint Petroleum, Inc.
We have audited the accompanying historical summary of revenue and direct
operating expenses of properties acquired in February 1998, for the year ended
December 31, 1997. The historical summary is the responsibility of the Company's
management. Our responsibility is to express an opinion on the historical
summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall historical summary presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the historical summary referred to above presents fairly, in all
material respects, the revenue and direct operating expenses of the properties
acquired in February 1998, in conformity with generally accepted accounting
principles.
HEIN + ASSOCIATES LLP
April 21, 1998
Dallas, Texas
F-1
<PAGE>
FIELDPOINT PETROLEUM, INC.
HISTORICAL SUMMARY OF REVENUES AND DIRECT OPERATING EXPENSES
OF PROPERTIES ACQUIRED IN FEBRUARY 1998
FOR THE YEAR ENDED DECEMBER 31, 1997
OIL AND GAS SALES $ 121,916
DIRECT OPERATING EXPENSES (37,775)
--------------
NET REVENUE $ 84,141
==============
See Notes to Historical Summary
F-2
<PAGE>
FIELDPOINT PETROLEUM, INC.
NOTES TO HISTORICAL SUMMARY OF REVENUES AND DIRECT OPERATING EXPENSES
OF PROPERTIES ACQUIRED IN FEBRUARY 1998
1. BASIS OF PREPARATION
The accompanying historical summary of revenues and direct operating
expenses relate to the operations of the oil and gas properties acquired by
FieldPoint Petroleum, Inc. (the "Company") in February 1998 from Fred
Bowman, Inc. The properties were acquired for approximately $190,000,
before purchase adjustments.
Revenues are recorded when the Company's share of oil or natural gas and
related liquids are sold. Direct operating expenses are recorded when the
related liability is incurred. Direct operating expenses include lease
operating expenses, ad valorem taxes and production taxes. Depreciation and
amortization of oil and gas properties, general and administrative expenses
and income taxes have been excluded from operating expenses in the
accompanying historical summaries because the amounts would not be
comparable to those resulting from proposed future operations..
The historical summary presented herein was prepared for the purpose of
complying with the financial statement requirements of a business
acquisition to be filed on Form 8-K as promulgated by Regulation S-B Item
3-10 of the Securities Exchange Act of 1934.
2. SUPPLEMENTAL INFORMATION ON OIL AND GAS RESERVES (UNAUDITED)
Proved oil and gas reserves consist of those estimated quantities of crude
oil, natural gas, and natural gas liquids that geological and engineering
data demonstrate with reasonable certainty to be recoverable in future
years from known reservoirs under existing economic and operating
conditions. Proved developed oil and gas reserves are reserves that can be
expected to be recovered through existing wells with existing equipment and
operating methods.
The following estimates of proved reserves have been made by independent
engineers. The estimated net interest in proved reserves are based upon
subjective engineering judgments and may be affected by the limitations
inherent in such estimation. The process of estimating reserves is subject
to continual revision as additional information becomes available as a
result of drilling, testing, reservoir studies and production history.
There can be no assurance that such estimates will not be materially
revised in subsequent periods.
The changes in proved reserves of the properties acquired in February 1998
for the year ended December 31, 1997 are set forth below. All of the
reserves are classified as proved developed.
Natural Gas
Oil (Thousand
(Barrels) Cubic Feet)
----------- -----------
Reserves at January 1, 1997 31,083 199,172
Production (3,300) (22,172)
----------- -----------
Reserves at December 31, 1997 27,783 177,000
=========== ===========
The standardized measure of discounted estimated future net cash flows related
to proved oil and gas reserves at December 31, 1997 is as follows:
F-3
<PAGE>
FIELDPOINT PETROLEUM, INC.
NOTES TO HISTORICAL SUMMARY OF REVENUES AND DIRECT OPERATING EXPENSES
OF PROPERTIES ACQUIRED IN FEBRUARY 1998
Future cash inflows $ 853,332
Future production costs (524,848)
-----------
Future net cash flows, before income tax 328,484
Future income taxes (48,000)
-----------
Future Net Cash Flows 280,484
10% annual discount (93,401)
-----------
Standardized Measure of Discounted Future
Net Cash Flows $ 187,083
===========
The primary changes in the standardized measure of discounted estimated future
net cash flows for the year ended December 31, 1997, were as follows:
Beginning of year $ 223,250
Sales of oil and gas produced, net of production costs (84,141)
Accretion of discount 22,300
Net change in income taxes 25,674
-----------
End of year $ 187,083
===========
Estimated future cash inflows are computed by applying year-end prices of oil
and gas to year-end quantities of proved reserves. Estimated future development
and production costs are determined by estimating the expenditures to be
incurred in developing and producing the proved oil and gas reserves at the end
of the year, based on year-end costs and assuming continuation of existing
economic conditions. Estimated future income tax expense is calculated by
applying year-end statutory tax rates to estimated future pre-tax net cash flows
related to proved oil and gas reserves, less the tax basis of the properties
involved.
The assumptions used to compute the standardized measure are those prescribed by
the Financial Accounting Standards Board and as such, do not necessarily reflect
the Company's expectations of actual revenues to be derived from those reserves
nor their present worth. The limitations inherent in the reserve quantity
estimation process are equally applicable to the standardized measure
computations since these estimates are the basis for the valuation process.
F-4
<PAGE>
FIELDPOINT PETROLEUM, INC.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
In February 1998, FieldPoint Petroleum Corporation (the Company) acquired
interests in certain producing properties in Texas for consideration of
$190,000. The acquisition was financed with an extension to the Company's
existing borrowing facility with a bank. The following unaudited pro forma
financial statements have been prepared to demonstrate the effect on the
Company's financial position and results of operations as if the properties had
been acquired on December 31, 1997 (with respect to the pro forma balance sheet)
and on January 1, 1997 (with respect to the pro forma statement of income). The
pro forma financial statements should be read in conjunction with the historical
summary of revenues and direct operating expenses of the properties included
herein and with the financial statements of the Company as filed in their Form
10-KSB. The pro forma financial statements should not be construed as a
reflection of the financial position or results of operations that actually
would have occurred if the acquisition would have occurred on the above dates.
F-5
<PAGE>
<TABLE>
<CAPTION>
FIELDPOINT PETROLEUM CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997
ASSETS
------
Historical Pro Forma
Amounts Adjustments Pro Forma
----------- ----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 48,457 $ -- $ 48,457
Accounts receivable 134,551 -- 134,551
Other 4,515 -- 4,515
----------- ----------- -----------
Total current assets 187,523 -- 187,523
PROPERTY AND EQUIPMENT:
Oil and gas properties 1,050,499 190,000(1) 1,240,499
Furniture and equipment 30,758 -- 30,758
Transportation equipment 74,945 -- 74,945
Less accumulated depletion and depreciation (353,935) -- (353,935)
----------- ----------- -----------
Net property and equipment 802,267 190,000 992,267
OTHER ASSET 20,000 -- 20,000
----------- ----------- -----------
Total assets $ 1,009,790 $ 190,000 $ 1,199,790
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 160,544 $ -- $ 160,544
Accounts payable and accrued expenses 111,255 -- 111,255
Oil and gas revenues payable 96,512 -- 96,512
----------- ----------- -----------
Total current liabilities 368,311 -- 368,311
LONG-TERM DEBT, net of current portion 255,877 190,000(1) 445,877
STOCKHOLDERS' EQUITY 385,602 -- 385,602
----------- ----------- -----------
Total liabilities and stockholders' equity $ 1,009,790 $ 190,000 $ 1,199,790
=========== =========== ===========
</TABLE>
See accompanying notes to pro forma financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
FIELDPOINT PETROLEUM, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1997
Historical Pro Forma
Amounts Adjustments Pro Forma
----------- ------------ -----------
<S> <C>
REVENUE:
Oil and gas sales $ 561,875 $ 121,916 (2) $ 683,791
Well operational and pumping fees 175,535 -- 175,535
Other 2,000 -- 2,000
----------- ----------- -----------
Total revenue 739,410 121,916 861,326
COSTS AND EXPENSES:
Production expense 177,078 37,775 (2) 214,853
Depletion and depreciation 125,232 21,115 (3) 146,347
General and administrative 323,890 -- 323,890
----------- ----------- -----------
Total costs and expenses 626,200 58,890 685,090
OTHER INCOME (EXPENSE):
Gain on sale of assets 3,235 -- 3,235
Acquisition expenses (45,000) -- (45,000)
Interest income (expense), net (33,830) (18,050)(4) (51,880)
Miscellaneous 6,152 -- 6,152
----------- ----------- -----------
Total other income (expense) (69,443) (18,050) (87,493)
----------- ----------- -----------
INCOME BEFORE INCOME TAXES 43,767 44,976 88,743
INCOME TAX PROVISION - CURRENT 19,784 15,876 (5) 35,660
----------- ----------- -----------
NET INCOME $ 23,983 $ 29,100 $ 53,083
=========== =========== ===========
BASIC AND DILUTED EARNINGS PER SHARE $ .01 $ .01
=========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING 4,137,399 4,137,399
=========== ===========
</TABLE>
See accompanying notes to pro forma financial statements.
F-7
<PAGE>
FIELDPOINT PETROLEUM CORPORATION
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(1) Adjustment to reflect the acquisition cost of the oil and gas properties
and the debt incurred to finance the acquisition.
(2) Adjustment to reflect the oil and gas sales and direct operating expenses
for the year ended December 31, 1997.
(3) Adjustment to reflect additional depletion and depreciation expense as if
the properties had been acquired on January 1, 1997.
(4) Adjustment to reflect additional interest expense at 9.5% as if the
properties had been acquired on January 1, 1997.
(5) Adjustment to reflect additional income tax expense as if the properties
had been acquired on January 1, 1997.
F-8
