<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K/A No. 2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 4, 1994
SEAGULL ENERGY CORPORATION
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(Exact name of registrant as specified in its charter)
Texas
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(State or other jurisdiction of incorporation)
1-8094 74-1764876
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(Commission File Number) (IRS Employer Identification No.)
1001 Fannin, Suite 1700, Houston, Texas 77002-6714
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(Address of principal executive offices) (Zip Code)
(713) 951-4700
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Registrant's telephone number, including area code
Not Applicable
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(Former name or former address, if changed since last report.)
<PAGE> 2
AMENDMENT NO. 2
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K
dated January 4, 1994 as set forth in the pages attached hereto:
Item 7. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
The Unaudited Pro Forma Condensed Financial
Statements of the Company giving effect to the
Seagull Canada Acquisition are hereby amended
to read in their entirety as set forth in the
attached pages hereto.
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.
Date: May 2, 1994
SEAGULL ENERGY CORPORATION
By: /s/ Rodney W. Bridges
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Rodney W. Bridges
Vice President and Controller
(Principal Accounting Officer)
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
The Consolidated Financial Statements of Novalta Resources Inc. and
Subsidiaries for the years ended December 31, 1993 and 1992 are
incorporated by reference herein to Exhibit 2.1 to Amendment No. 1 to the
Company's Current Report on Form 8-K dated January 4, 1994.
<PAGE> 4
(b) Pro Forma Financial Information.
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
On January 4 1994, an indirect wholly owned subsidiary of Seagull Energy
Corporation ("Seagull" or the "Company") acquired all of the outstanding shares
of stock (the "Stock") of Novalta Resources Inc. ("Novalta") and an
intercompany note (the "Note") from Novalta to its parent, Novacor
Petrochemicals Ltd. ("Novacor Petrochemicals"). The Stock and the Note were
acquired for a purchase price of approximately $203 million in cash, subject to
customary post-closing adjustments (the "Seagull Canada Acquisition"). The
economic effective date of the Seagull Canada Acquisition was December 31,
1993 (the "Effective Date"). Effective as of the January 4, 1994 Closing Date,
Novalta was amalgamated with one of its subsidiaries along with Seagull Energy
Canada Ltd., the indirect subsidiary of Seagull that acquired Novalta. The
resulting amalgamated company was named Seagull Energy Canada Ltd. ("Seagull
Canada").
The unaudited pro forma condensed balance sheet as of December 31, 1993 and the
unaudited pro forma condensed statement of earnings for the year ended December
31, 1993 give effect to the Seagull Canada Acquisition, financed initially
under a new $175 million reducing revolving credit facility (the "Canadian
Credit Agreement") as well as borrowings under Seagull's amended and restated
$475 million revolving credit line (the "Revolver") with a group of major U.S.
and international banks.
The following unaudited pro forma information has been included as required by
the rules of the Securities and Exchange Commission and is provided for
comparative purposes only. The unaudited pro forma information presented is
based on the respective historical consolidated financial statements of Seagull
and Novalta and should be read in conjunction with such financial statements
and the related notes thereto. The historical consolidated financial
statements of Novalta as presented do not reflect the effect of certain
transactions between Novalta and NOVA Corporation of Alberta and its
subsidiaries that were completed prior to the closing of the Seagull Canada
Acquisition, such as the elimination of intercompany debt balances. The effect
of such transactions is reflected in the conforming adjustments to the
unaudited pro forma condensed financial statements. The unaudited pro forma
information presented does not purport to be indicative of actual results, if
the combinations had been in effect on the dates or for the periods indicated,
or of future results.
All amounts are in U.S. dollars unless otherwise noted.
<PAGE> 5
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
December 31, 1993
(dollars in thousands)
<TABLE>
<CAPTION>
Seagull Novalta
Energy Resources Conforming Pro Forma
Corporation Inc.(E) Adjustments Combined
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents..................... $ 5,572 $ 415 $ - $ 5,987
Accounts receivable, net...................... 98,734 11,136 - 109,870
Other......................................... 10,902 688 - 11,590
----------- -------- --------- -----------
Total Current Assets........................ 115,208 12,239 - 127,447
Property, Plant and Equipment - at cost......... 1,278,701 166,067 (166,067) (A) 1,495,295
216,594 (B)
Accumulated Depreciation, Depletion
and Amortization.............................. 345,512 69,038 (69,038) (A) 345,512
----------- -------- --------- -----------
933,189 97,029 119,565 1,149,783
Other Assets.................................... 69,854 3,145 883 (B) 65,424
(8,458) (C)
----------- -------- --------- -----------
Total Assets.................................... $ 1,118,251 $112,413 $ 111,990 $ 1,342,654
=========== ======== ========= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable.............................. $ 84,904 $ 7,060 $ - $ 91,964
Current maturities of long-term debt.......... 1,538 - - 1,538
Other......................................... 37,724 746 - 38,470
----------- -------- --------- -----------
Total Current Liabilities................... 124,166 7,806 - 131,972
Long-Term Debt.................................. 459,787 64,316 (64,316) (D) 653,093
193,306 (C)
Other Noncurrent Liabilities.................... 66,785 1,965 (602) (B) 68,148
Deferred Income Taxes........................... 28,134 7,899 (7,899) (D) 50,062
21,928 (B)
Shareholders' Equity
Seagull Common Stock......................... 3,638 - - 3,638
Novalta Resources Inc. shareholder's equity.. - 30,427 (30,427) (D) -
Additional paid-in capital................... 324,192 - - 324,192
Retained earnings............................ 120,713 - - 120,713
Less - note receivable from ESOP............. (6,029) - - (6,029)
Less - Seagull Common Stock held in
Treasury, at cost.......................... (3,135) - - (3,135)
----------- -------- --------- -----------
Total shareholders' equity.................. 439,379 30,427 (30,427) 439,379
----------- -------- --------- -----------
Total Liabilities and Shareholders' Equity..... $ 1,118,251 $112,413 $ 111,990 $ 1,342,654
=========== ======== ========= ===========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Balance Sheet
<PAGE> 6
NOTES TO UNAUDITED PRO FORMA
CONDENSED BALANCE SHEET
(A) To eliminate Novalta's historical cost of property, plant and equipment
and accumulated depreciation, depletion and amortization.
(B) To adjust the assets acquired and liabilities assumed in the Seagull
Canada Acquisition to reflect the allocation of the estimated purchase
price. The adjusted cost of property, plant and equipment was calculated
as follows:
<TABLE>
<CAPTION>
(dollars in thousands)
<S> <C>
Estimated purchase price...................... $ 200,455
Estimated transaction costs................... 1,309
Less - other assets acquired:
Current assets............................. (12,239)
Other assets............................... (4,028)
Plus - liabilities assumed:
Current liabilities................... 7,806
Other noncurrent liabilities.......... 1,363
Deferred income taxes................. 21,928
---------
$ 216,594
=========
</TABLE>
The purchase price was determined pursuant to arm's length negotiations
between the Company and Novacor Petrochemicals, based on the economic
effective date of December 31, 1993. The purchase price was based to a
large extent on the net present value of natural gas and oil reserves
attributable to the properties acquired as a result of the Seagull Canada
Acquisition.
(C) To record the financing of the Seagull Canada Acquisition, including
approximately $193.3 million of borrowings under the Canadian Credit
Agreement and the Revolver, a cash deposit of approximately $7.5 million
paid in November 1993 and other costs in connection with the acquisition.
(D) To eliminate long-term debt, deferred income taxes and shareholder's
equity of Novalta.
(E) Assets and liabilities of Novalta were translated from Canadian dollars to
U.S. dollars using the conversion rate in effect on January 4, 1994 of
$0.7553 per Canadian dollar.
<PAGE> 7
UNAUDITED PRO FORMA CONDENSED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1993
(dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Seagull Novalta
Energy Resources Conforming Pro Forma
Corporation Inc.(F) Adjustments Combined
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues........................................ $ 377,165 $ 32,358 $ - $ 409,523
Costs of Operations:
Operating Costs .............................. 184,620 12,973 399 (A) 197,992
Depreciation, depletion and amortization...... 116,556 9,371 (9,371) (B) 131,772
15,216 (C)
---------- --------- --------- ---------
Operating Profit................................ 75,989 10,014 (6,244) 79,759
General and Administrative...................... 11,666 - - 11,666
Interest........................................ 36,753 1,083 (1,083) (B) 48,595
11,842 (D)
Interest Income and Other....................... (5,708) (3,102) - (8,810)
---------- --------- --------- ---------
Earnings Before Income Taxes.................... 33,278 12,033 (17,003) 28,308
Income Taxes.................................... 6,080 4,650 (4,650) (B) 6,146
66 (E)
---------- --------- --------- ---------
Net Earnings.................................... $ 27,198 $ 7,383 $ (12,419) $ 22,162
========== ========= ========= =========
Earnings Per Share.............................. $ 0.76 $ 0.62
========== =========
Weighted Average Number of Common
Shares Outstanding (in thousands)............. 35,790 35,790
========== =========
</TABLE>
- - -------------------------
See Notes to Unaudited Pro Forma Condensed Statement of Income
<PAGE> 8
NOTES TO UNAUDITED PRO FORMA
CONDENSED STATEMENT OF INCOME
(A) To adjust general operating expenses to give effect to Seagull's increased
personnel, rent, consultation, professional and other expenses expected as
a result of the Seagull Canada Acquisition.
(B) To eliminate depreciation, depletion and amortization, interest expense
and income taxes of Novalta.
(C) To adjust depreciation, depletion and amortization to give effect to the
Seagull Canada Acquisition.
(D) To adjust interest expense to give effect to the Seagull Canada Acquisition
initially financed under the Canadian Credit Agreement and the Revolver
and the amortization of loan acquisition costs relating to the Canadian
Credit Agreement. The pro forma interest expense adjustment was
calculated as follows:
<TABLE>
<CAPTION>
(dollars in thousands)
<S> <C>
Pro forma change in outstanding balance -
Canadian Credit Agreement $ 151,938
Estimated average interest rate 5.01%
---------
Pro forma interest expense on
Canadian Credit Agreement 7,612
Pro forma change in outstanding balance -
Revolver 49,826
Estimated average interest rate 5.40%
---------
Pro forma interest expense on the
increased Revolver 2,689
Pro forma interest expense on historical
Revolver due to increased interest
rate margin 1,348
Pro forma amortization of loan acquisition
costs relating to the Canadian Credit
Agreement 193
---------
$ 11,842
=========
</TABLE>
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NOTES TO UNAUDITED PRO FORMA
CONDENSED STATEMENT OF INCOME
(E) To adjust income taxes for the items discussed in Notes (A) through (D)
above.
(F) Revenues, expenses and net income of Novalta were translated using
the conversion rate during 1993 of $0.7752 per Canadian dollar (C$).
A reconciliation of the net income of Novalta as set forth in the
historical financial statements to net earnings provided in the pro forma
financial statements is as follows, in thousands except conversion rate:
<TABLE>
<S> <C>
Net income per historical financial
statements presented in accordance
with U.S. generally accepted
accounting principles ............... C$ 9,524
Times average conversion rate........... US$ 0.7752/C$
-------------
Net earnings provided in the pro forma
financial statements................. US$ 7,383
==========
</TABLE>
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(c) Exhibits.
None
