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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 (Date of earliest event reported): MARCH 23, 1998
PLAINS RESOURCES INC.
(Exact name of registrant as specified in charter)
DELAWARE 0-9808 13-2898764
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
500 DALLAS STREET
HOUSTON, TEXAS 77002
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (713) 654-1414
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ITEM 5. OTHER EVENTS.
On March 23, 1998, the Registrant announced it had entered into a
definitive agreement to acquire all of the outstanding capital stock of All
American Pipeline Company, Celeron Gathering Corporation and Celeron Trading &
Transportation Company (collectively the "Celeron Companies") from The
Goodyear Tire & Rubber Company. The Registrant's announcement is attached as an
exhibit to this report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 - Press release of the Registrant dated March 23,
1998, announcing the acquisition of all of the
outstanding shares of the Celeron Companies.
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.
Dated: March 26, 1998
PLAINS RESOURCES INC.
By: /s/ Michael R. Patterson
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Name: Michael R. Patterson
Title: Vice President and General Counsel
1
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INDEX TO EXHIBITS
Number Exhibit
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99.1 Press release of the Registrant dated March 23, 1998,
announcing the acquisition of all of the outstanding
shares of the Celeron Companies.
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EXHIBIT 99.1
PLAINS RESOURCES ANNOUNCES AGREEMENT TO ACQUIRE
ALL AMERICAN PIPELINE COMPANY FROM
THE GOODYEAR TIRE & RUBBER COMPANY
(Houston - March 23, 1998) Plains Resources Inc. (AMEX:PLX) today
announced it had entered into a definitive agreement to acquire all of the
outstanding capital stock of All American Pipeline Company, Celeron Gathering
Corporation and Celeron Trading & Transportation Company from The Goodyear Tire
& Rubber Company. Aggregate proceeds to Goodyear through closing are estimated
at $420 million. The principal assets of the entities to be acquired include the
All American Pipeline System, a 1,233 mile crude oil pipeline extending from
California to Texas and a 45 mile crude oil gathering system in the San Joaquin
Valley of California as well as other assets related to such operations. The
purchase price is subject to certain adjustments through the closing date and
the transaction is subject to regulatory review and approval. The transaction is
expected to be completed in the third quarter after regulatory approvals have
been secured.
Greg L. Armstrong, President and CEO of Plains Resources, stated that
the acquisition is structured to be made by Plains All American Inc., a wholly
owned subsidiary of Plains Resources. A major portion of the financing for the
transaction will be provided through a new $325 million, limited recourse bank
facility made available to Plains All American Inc. by ING Barings and
BankBoston, N.A.
In addition to the bank facility, Plains Resources will make a capital
contribution to Plains All American Inc. of up to $130 million which will be
used to fund the balance of the purchase price and transaction costs and provide
initial working capital. To finance its capital contribution, Plains Resources
will borrow approximately $50 million under its existing bank revolving credit
facility and has entered into financing commitments for a new issue of privately
placed, convertible preferred stock aggregating approximately $80 million.
Commitments for the preferred stock placement have been obtained from a group of
equity investors comprised primarily of existing shareholders. Kayne Anderson
Investment Management, Plains' largest shareholder, and EnCap Investments L.C.
are the lead investors in the private placement.
Harry N. Pefanis, President of Plains Resources' existing midstream
operations and Plains All American Inc., stated that, as a result of this
transaction, Plains will own and operate the single largest crude oil pipeline
connecting California to West Texas, where it connects with pipelines that
transport crude oil to Cushing, Oklahoma and the Gulf Coast. The Cushing
Interchange is the largest crude oil trading location in the United States and
the designated delivery point for the New York Mercantile Exchange crude oil
futures contract. At Cushing, Plains owns and operates a two million barrel
crude oil terminal and storage facility, the largest terminal facility in
Cushing not owned by a major oil company and the fourth largest overall. Pefanis
also noted that the 45 mile gathering system is located in the San Joaquin
Valley, currently the most prolific crude oil producing region in the
continental United States. The areas serviced by the pipeline and gathering
system currently produce over 700,000 barrels of crude oil per day, representing
approximately 15% of total oil production in the continental United States. For
1997, the operations to be acquired generated approximately $65 million in
earnings before interest, taxes, depreciation and amortization.
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Except for the historical information contained herein, the matters
discussed in this news release are forward-looking statements that involve
certain risks and uncertainties. These risks and uncertainties include, among
other things, market conditions, governmental regulations and other factors
discussed in the company's filings with the Securities and Exchange Commission.
Plains Resources is an independent energy company engaged in the
exploration, acquisition, development and exploitation of crude oil and natural
gas and the midstream activities of marketing, transportation, terminalling and
storage of crude oil. The company is headquartered in Houston, Texas.
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