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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 (Date of earliest event reported) FEBRUARY 24, 2000
PRIMA ENERGY CORPORATION
(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 0-9408 84-1097578
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) file number) Identification No.)
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1801 BROADWAY, SUITE 500, DENVER CO 80202
(Address of principal executive offices) (Zip Code)
(303) 297-2100
(registrant's telephone number, including area code)
NO CHANGE
(Former name or former address, if changed from last report.)
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ITEM 5. OTHER EVENTS
On February 24, 2000, Prima Energy Corporation, a Delaware corporation,
issued a press release reporting year end oil and natural gas reserve
information. The release also reported the Company's estimated year 2000 capital
expenditures budget and a summary of year 1999 capital expenditures. A copy of
the press release is attached hereto as Exhibit 99.1.
ITEM 7c. EXHIBITS
The following exhibit is filed herewith pursuant to the provisions of
Item 601 of Regulation S-K.
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Exhibit
Table No. Document Exhibit No.
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99 Prima Energy Corporation Press 99.1
Release dated February 24, 2000
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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.
PRIMA ENERGY CORPORATION
(Registrant)
Date February 24, 2000 By /s/ Richard H. Lewis
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Richard H. Lewis,
President and
Principal Financial Officer
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INDEX TO EXHIBITS
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EXHIBIT
NUMBER DESCRIPTION
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EX. 99.1 Prima Energy Corporation Press Release dated February 24,
2000.
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EXHIBIT 99.1
February 24, 2000
Denver, Colorado
FOR IMMEDIATE RELEASE
PRIMA ENERGY CORPORATION REPORTS YEAR END RESERVES
Prima Energy Corporation ("Prima") reported net proved reserves at
December 31, 1999, as estimated by independent engineering firms, increased 73%
to 124 billion cubic feet (Bcf) of natural gas and 3.3 million barrels of oil.
On an equivalent basis, year end 1999 reserves totaled 144 Bcf of gas equivalent
(Bcfe) or 24 million barrels of oil equivalent (MMBOE). Approximately 48% of
Prima's year end reserves are proved developed and 52% are proved undeveloped.
The Company's natural gas and oil reserves represent 86% and 14% of the total
reserves, respectively. At December 31, 1998, net proved reserves totaled 66 Bcf
of natural gas and 2.8 million barrels of oil. The reserves for 1998 have been
reduced to reflect the previously announced sale of all of the Company's assets
at the Bonny Field for $26 million ($20 million net of tax), which was effective
January 1, 1999. The proved reserves attributable to the Bonny Field at December
31, 1998 were approximately 5 Bcf of natural gas.
Prima replaced 765% of its 1999 production of approximately 9.1 Bcfe by
adding reserves of 69.6 Bcfe. The 10% discounted present value of estimated
future net revenues before income taxes, as of December 31, 1999, totaled $108.8
million compared to $56.9 million as of December 31, 1998, an increase of 91%.
The following table summarizes the respective year end natural gas and oil
prices used to estimate reserves:
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Percent
1999 1998 Change Change
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Natural gas (per Mcf)............. $ 1.90 * $ 1.85 $ 0.05 2.7%
Oil (per barrel).................. 24.68 10.31 14.37 139.4
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* The year end wellhead price for the 54 Bcf of coalbed methane gas was
$1.42 per Mcf based on a Rocky Mountain index price of $2.04 per MMbtu.
A summary of the Company's reserves, average daily production and
revenues by areas of activity for December 31, 1999 and 1998 and for the years
then ended is as follows:
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Percent of Average Daily Net Production Percent of
Proved ----------------------------------------- Oil and Gas
Reserves Oil (bbls) Gas (Mcf) Revenue
-------------- -------------- ----------------------- -------------
1999 1998 1999 1998 1999 1998 1999 1998
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Wattenberg Area.................... 46% 64% 790 692 12,801 10,310 73% 62%
Bonny Field........................ 0 6 0 0 0 864 0 11
Wind River Basin................... 6 9 13 16 3,546 4,307 14 17
Powder River Basin
Conventional.................... 10 16 78 76 3,278 2,261 13 10
Powder River Basin Coal
Bed Methane..................... 38 5 0 0 0 0 0 0
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881 784 19,625 17,742
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During 1999, the Company's average daily oil production increased 12.4%
and the average daily natural gas production, after giving effect to the Bonny
sale, increased 16.3%. The average oil and natural gas price received in 1999
was $17.42 per barrel and $2.10 per Mcf compared to $12.71 per barrel and $2.00
per Mcf in 1998.
At year end, Prima added approximately 50 Bcf of coalbed methane
("CBM") reserves in the Powder River Basin as estimated by the independent
engineering firm of Netherland, Sewell and Associates, Inc. The Company had
booked approximately 4 Bcf at year end 1998. Prima currently holds 138,000 net
acres in this rapidly developing play. The proved reserves assigned at year end
1999 represent approximately 8% of Prima's acreage position. According to the
Wyoming Oil and Gas Commission, as of November 30, 1999, 2,226 CBM wells had
been drilled with 1,381 wells producing nearly 200,000 Mcf per day. The
remaining 845 wells were in various stages of dewatering, testing or awaiting
pipeline hookup.
In other news, Prima reported that its preliminary capital expenditures
budget for 2000 is approximately $30 million. The 2000 budget anticipates
drilling 200 coalbed methane wells, drilling 25 new wells and restimulating 55
wells in the Wattenberg Area of the Denver Basin, continued development in the
other areas where it is active, as well as new opportunities and expansion of
its service company subsidiaries in Colorado and Wyoming. The $30 million budget
is exclusive of acquisition expenditures.
In 1999, the Company's capital expenditures totaled approximately $21.4
million. The Company drilled or participated in the drilling of 34 net wells and
the restimulation of 54 net wells. Also included in the expenditures total is
$3.7 million for undeveloped acreage and $2.7 million for oilfield service and
other equipment. Additionally, during 1999 the Company expended $2.5 million
repurchasing common shares for the treasury pursuant to the Company's stock
repurchase plan.
Prima is a Denver based independent oil and gas company engaged in the
exploration for, acquisition, development and production of crude oil and
natural gas. Through its wholly owned subsidiaries, Prima is also engaged in oil
and gas property operations, oilfield services and natural gas gathering,
marketing and trading. The Company's current activities are principally
conducted in the Rocky Mountain region of the United States.
The Company expects to report year-end financial results in mid March
2000.
This press release contains forward-looking statements regarding the Company's
oil and natural gas reserve estimates and year 2000 drilling budget and plans
and are made pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Any such statements or projections reflect the
Company's current views with respect to future events and performance. No
assurances can be given, however, that these events will occur or that such
projections will be achieved and actual results could differ materially from
those projected. Factors which could cause results to differ from projections
include volatility of oil and natural gas prices, uncertainty of reserve
estimates, risks of oil and natural gas exploration, development and production,
competition, operating hazards and uninsured risks, government regulation and
environmental matters. A more complete discussion of important factors that
could cause actual results to differ materially from those projected is included
in the Company's Annual Report on Form 10-K for the year ended December 31,
1998, beginning on page 16.
NASDAQ Symbol: PENG
Contacts: Richard H. Lewis, President
Michael J. McGuire, Executive Vice President, Exploration
Michael R. Kennedy, Executive Vice President, Corporate
Development
Sandra J. Irlando, Vice President, Accounting
Telephone Number: (303) 297-2100
Website: www.primaenergy.com
