FORM 8K\A-1
SECURITIES AND EXCHANGE COMMISSION
450 FIFTH STREET NORTHWEST
WASHINGTON, DC 02549
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12, 13, or 15 (d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: November 22, 1995
ASPEN EXPLORATION CORPORATION
(Exact name of Registrant as specified in charter)
AMENDMENT NO. 1
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K as set
forth in the pages attached hereto.
ITEM 7.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
ASPEN EXPLORATION CORPORATION
(Registrant)
By /s/ R.V. Bailey
------------------------------------
R. V. Bailey, President
Date: March 11, 1996
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Item 7. Financial Statements
(i) Financial statements for assets acquired are provided herein by this
Form 8K\A-1 Amendment to Form 8-K Current Report dated November 1, 1995 and
filed on November 22, 1995, as allowed by Item 7(a) (4).
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Aspen Exploration Corporation and Subsidiaries
Denver, Colorado
We have audited the accompanying statement of revenue and direct expenses
of the assets acquired from Capitol Oil Corporation for the years ended June 30,
1995 and 1994. This financial statement is the responsibility of the Company's
management. Our responsibility is to express an opinion on this financial
statement 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 financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above present fairly,
in all material respects, the results of operations for the assets acquired from
Capitol Oil Corporation for the years ended June 30, 1995 and 1994, in
conformity with generally accepted accounting principles.
HOLBEN, BOAK, COOPER & CO.
Denver, Colorado
March 9, 1996
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ASPEN EXPLORATION CORPORATION
STATEMENTS OF REVENUE AND DIRECT EXPENSES
OF THE ASSETS ACQUIRED FROM CAPITOL OIL CORPORATION
FOR THE YEARS ENDED JUNE 30, 1995 AND 1994
AND THE QUARTER ENDED SEPTEMBER 30, 1995 (UNAUDITED)
September 30, June 30,
1995 1995 1994
--------------- ------------------------
(Unaudited)
Oil & Gas Revenue $20,118 $89,943 $96,992
------- ------- -------
Lease Operating Expense 5,234 12,928 15,403
Production Taxes 668 2,870 4,502
Workover Expense -0- 5,449 2,256
------- ------- -------
5,902 21,247 22,161
------- ------- -------
Excess of Revenue over
direct Expenses $14,216 $68,696 $74,831
======= ======= =======
See Notes to Financial Statements
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ASPEN EXPLORATION CORPORATION
NOTES TO STATEMENTS OF REVENUE AND DIRECT EXPENSES
OF THE ASSETS ACQUIRED FROM CAPITOL OIL CORPORATION
Note 1 - Summary of significant accounting policies
On November 1, 1995, Aspen Exploration Corporation (the "Company") acquired
various working interests of the producing oil and gas properties of Capitol Oil
Corporation. The acquired assets include interests in two producing oil wells,
one shut-in gas well and two idle wells waiting to be abandoned or converted to
salt water disposal wells. The interests were acquired as a group and ranged
from 60% to 90%.Of the group interest acquired, Aspen bought 20%. Officers of
the Company acquired 5% and the rest was sold to outside parties. Aspen will act
as operator of the wells. The accompanying statements present the revenues and
the associated direct expenses of these properties, as incurred by Capitol Oil,
for the years ended June 30, 1995 and 1994. The statements do not include
depreciation, amortization or depletion or any allocation of corporate overhead
costs or any other indirect expenses including income taxes.
Form 8-K, filed by the Company on November 22, 1995 and which describes the
acquisitions in detail, should be read in conjunction with these financial
statements.
Note 2 - Major customers
All oil and gas revenue was derived from one purchaser.
Note 3 - Unaudited oil and gas reserve quantities
The following unaudited reserve estimates presented as of June 30, 1995 and 1994
were prepared by Robert A. Cohan, Vice President, Oil and Gas Operations, Aspen
Exploration Corporation. There are many uncertainties inherent in estimating
proved reserve quantities and in projecting future production rates and the
timing of development expenditures. In addition, reserve estimates of new
discoveries that have little production history are more imprecise than those of
properties with more production history. Accordingly, these estimates are
expected to change as future information becomes available.
Proved oil and gas reserves are the estimated quantities of crude oil,
condensate, natural gas and natural gas liquids which geological and engineering
data demonstrate with reasonable certainty to be recoverable in future years
from known reservoirs under existing economic and operating conditions.
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ASPEN EXPLORATION CORPORATION
NOTES TO STATEMENTS OF REVENUE AND DIRECT EXPENSES
OF THE ASSETS ACQUIRED FROM CAPITOL OIL CORPORATION
(CONTINUED)
Proved developed oil and gas reserves are those reserves expected to be
recovered through existing wells with existing equipment and operating methods.
Unaudited net quantities of proved and proved developed reserves of crude oil
(including condensate) and natural gas (all located within the United States)
are as follows:
Changes in proved reserves (Bbls) (MCF)
- -------------------------- ------ -----
(in thousands)
Estimated quantity, June 30, 1993 72 74
Production (7) (0)
--- ---
Estimated quantity, June 30, 1994 65 74
Production (7) (0)
--- ---
Estimated quantity, June 30, 1995 58 74
==== ====
Proved reserves Developed Undeveloped Total
--------- ----------- -----
at year end (in thousands)
- -----------------
Oil (Bbls)
June 30, 1994 21 44 65
June 30, 1995 14 44 58
Gas (MCF)
June 30, 1994 0 74 74
June 30, 1995 0 74 74
The following table presents a standardized measure of the discounted future net
cash flows attributable to the Company's proved oil and gas reserves. Future
cash inflows were computed by applying year-end prices of oil and gas to the
estimated future production of proved oil and gas reserves. The future
production and development costs represent the estimated future expenditures
(based on current costs) to be incurred in developing and producing the proved
reserves, assuming continuation of existing economic conditions. Future income
tax expenses were computed by applying statutory income tax rates to the
difference between pre-tax net cash flows relating to the Company's proved oil
and gas reserves and the tax basis of proved oil and gas properties and
available net operating loss carryforwards. Discounting the future net cash
inflows at 10% is a method to measure the impact of the time value of money.
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ASPEN EXPLORATION CORPORATION
NOTES TO STATEMENTS OF REVENUE AND DIRECT EXPENSES
OF THE ASSETS ACQUIRED FROM CAPITOL OIL CORPORATION
(CONTINUED)
June 30,
-----------------------------
1995 1994
---- ----
(in thousands)
Future cash inflows $751 $836
Future production and
development costs (174) (193)
Future income tax
expense -- --
---- ----
Future net
cash flows 577 643
10% annual discount
for estimated timing
of cash flows (173) (193)
---- ----
Standardized measure
of discounted future
net cash flows $404 $450
==== ====
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ASPEN EXPLORATION CORPORATION
NOTES TO STATEMENTS OF REVENUE AND DIRECT EXPENSES
OF THE ASSETS ACQUIRED FROM CAPITOL OIL CORPORATION
(CONTINUED)
The following presents the principal sources of the changes in the standardized
measure of discounted future net cash flows:
Years ended June 30,
---------------------
1995 1994
------ ------
(in thousands)
Standardized measure of
discounted future net
cash flows, beginning
of year $ 450 $ 479
------ ------
Sales and transfers of
oil and gas produced,
net of production
costs (69) (75)
Net changes in prices
and production costs
and other 2 (2)
Other (25) -
Accretion of discount 46 48
------ ------
(46) (29)
------ ------
Standardized measure
of discounted future
cash flows, end of
year $ 404 $ 450
====== ======
Note 4 - Subsequent events
Subsequent to acquiring the interests, the Company recompleted the shut-in gas
well. In March 1996, the Company connected the well to a gas line and commenced
gas sales from the well.
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Item 7. Pro forma financial information
(ii) Pro forma financial information for assets acquired are provided
herein by this Form 8K\A-1 Amendment to Form 8-K Current Report dated November
1, 1995 and filed on November 22, 1995 as allowed by Item 7(a) (4).
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Condensed Pro Forma Combined
Statement of Operations
The following unaudited condensed pro forma combined statement of operations for
the year ended June 30, 1995 and the quarter ended September 30, 1995 is
presented to show the effects of the acquisition of certain oil and gas
producing properties (the "Properties") by Aspen Exploration Company ("Aspen")
as if the acquisition had taken place on July 1, 1994. The acquisition, which
occurred on November 1, 1995, is accounted for as a purchase. The financial
information for Aspen for the year ended June 30, 1995 and September 30, 1995 is
derived from its Form 10-KSB and 10- Q-SB as filed for that period and should be
read in conjunction with this statement. Additionally, Form 8-K, filed by the
Company of November 22, 1995 and which describes the acquisition of the
properties in detail and the Company's Form 10-Q-SB for the quarter ended
December 31, 1995, which contains a balance sheet for the Company which reflects
the acquisition, should also be read in conjunction with this statement.
The pro forma results of operations are not necessarily indicative of the
results of operations that would actually have occurred if the transaction had
been effective as of July 1, 1994.
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<TABLE>
ASPEN EXPLORATION CORPORATION
CONDENSED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1995
(UNAUDITED)
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
ASPEN PROPERTIES DEBIT CREDIT COMBINED
----------- ---------- ------ ------ ---------
<S> <C> <C> <C> <C> <C>
REVENUES
OIL & GAS 221,875 89,943 311,818
MINERAL 934,351 934,351
FEES AND EQUIPMENT RENTAL 47,405 + 47,405
INTEREST 2,648 2,648
---------- ---------- ----------
1,206,279 89,943 1,296,222
---------- ---------- ----------
COSTS & EXPENSES
OIL & GAS PRODUCTION 178,687 21,247 199,934
LOSS ON DISPOSITION OF ASSETS 232,220 232,220
DEPRECIATION DEPLETION & AMORTIZATION 77,179 (1) 19,480 96,659
MINERAL SEVERANCE TAX 45,000 45,000
SELLING, GENERAL & ADMINISTRATIVE 564,955 (2) 6,000 570,955
---------- ---------- ------ ------- ----------
1,098,041 21,247 25,480 0 1,144,768
---------- ---------- ------ ------- ----------
NET INCOME 108,238 68,696 (25,480) 0 151,454
========== ========== ========== ========== ==========
NET INCOME PER COMMON SHARE 0.03 N/A 0.04
========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,194,322 N/A 4,194,322
========== ========== ==========
</TABLE>
SEE NOTES TO CONDENSED PRO FORMA COMBINED FINANCIAL STATEMENTS
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NOTES TO CONDENSED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(A) Pro forma adjustments:
(1) To record depletion and amortization on the properties acquired,
using the full cost method. Depletion and amortization of the
properties valued at $185,000 is computed using a
unit-of-production method based on proved reserves as determined
by independent engineers.
(2) Estimated accounting and legal costs associated with SEC filings
regarding the acquisition.
(B) Pro forma loss per share:
The loss per common share is based on the weighted average number of
common shares outstanding for the period presented.
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<TABLE>
ASPEN EXPLORATION CORPORATION
CONDENSED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FIRST QUARTER ENDED SEPTEMBER 30, 1995
UNAUDITED)
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
ASPEN PROPERTIES DEBIT CREDIT COMBINED
---------- ----------- ----- ------ ---------
<S> <C> <C> <C> <C> <C>
REVENUES
OIL & GAS 99,349 20,118 119,467
MINERAL 236,825 236,825
ALASKA MINING TAX EXEMPTION 45,000 45,000
INTEREST & OTHER 6,268 6,268
---------- --------- ---------
387,442 20,118 407,560
---------- --------- ---------
COSTS & EXPENSES
OIL & GAS PRODUCTION 7,046 5,902 12,948
DEPRECIATION DEPLETION & AMORTIZATION 7,500 (1) 4,175 11,675
SELLING, GENERAL & ADMINISTRATIVE 157,454 157,454
----------- ---------- ---------- ---------- ---------
172,000 5,902 4,175 0 182,077
---------- ---------- ---------- ---------- ---------
NET INCOME 215,442 14,216 (4,175) 0 225,483
========== ========== ========== ========== =========
NET INCOME PER COMMON SHARE 0.05 N/A 0.05
========== ========== =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,271,322 N/A 4,271,322
========== ========== ==========
</TABLE>
SEE NOTES TO CONDENSED PRO FORMA COMBINED FINANCIAL STATEMENTS
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NOTES TO CONDENSED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(A) Pro forma adjustments:
(1) To record depletion and amortization on the properties acquired,
using the full cost method. Depletion and amortization of the
properties valued at $185,000 is computed using a
unit-of-production method based on proved reserves as determined
by independent engineers.
(B) Pro forma loss per share:
The loss per common share is based on the weighted average number of
common shares outstanding for the period presented.
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Item 7. Exhibits to the report
(iii) Exhibits
(1) Incorporated by reference on Form 10-K dated June 30, 1995 (filed
on September 25, 1995).
(2) Incorporated by reference to Acquisition Agreement relating to
the Capitol Oil Corporation properties dated November 1, 1995
(filed on November 22, 1995).
(3) Incorporated by reference on Form 8-K dated November 1, 1995
(filed on November 22, 1995).
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