AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 31, 1998
REGISTRATION STATEMENT NO. 333-45469
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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FORTUNE NATURAL RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1311 95-4114732
(State of other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of incorporation Classification Code Number) Identification No.)
or organization)
515 WEST GREENS ROAD, SUITE 720
HOUSTON, TEXAS 77067
(281) 872-1170
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
DEAN W. DRULIAS, ESQ.
FORTUNE NATURAL RESOURCES CORPORATION
515 WEST GREENS ROAD, SUITE 720
HOUSTON, TEXAS 77067
(281) 872-1170
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
JOHN W. MENKE, ESQ.
BOYER, EWING & HARRIS INCORPORATED
THE COASTAL TOWER
NINE GREENWAY PLAZA, SUITE 3100
HOUSTON, TEXAS 77046
(713) 871-2025
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED
SALE TO THE PUBLIC: As soon as practicable after
this Registration Statement becomes effective.
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If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [ X ]
If the registrant elects to deliver its latest annual report to
security holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this Form, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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FORTUNE NATURAL RESOURCES CORPORATION
EXCHANGE OFFER
SUPPLEMENT NO. 1 TO PROSPECTUS DATED
FEBRUARY 12, 1998
Fortune Natural Resources Corporation ("Fortune" or the "Company")
hereby amends its Prospectus dated February 12, 1998, pursuant to which the
Company made an offer to the holders of its public warrants and certain unit
purchase warrants as defined in such Prospectus (collectively "Old Public
Warrants") to exchange such Old Public Warrants for New Warrants. The purposes
of the amendment are to extend the expiration date of the Exchange Offer and to
report the sale of the Company's interest in a major property. This supplement
must be read in conjunction with the Prospectus, a copy of which was recently
forwarded to each warrantholder. Capitalized terms not otherwise defined herein
have the meaning set forth in the Prospectus.
EXTENSION OF EXPIRATION DATE
The Expiration Date of the Exchange Offer, which was previously set to
expire at 5:00 P.M. New York City time on March 31, 1998, has been extended to
5:00 P.M. New York City time on April 15, 1998, unless further extended by the
Company. As of about mid-day on March 31, 1998, 1,752,513 Old Public Warrants
have been tendered to the Company in connection with the Exchange Offer. This
represents 89% of the total Old Public Warrants subject to the Exchange Offer.
All other terms and conditions of the Exchange Offer remain the same as
set forth in the Prospectus.
To the extent any warrantholder has previously tendered any Old Public
Warrants in the Exchange Offer, the tendering Warrantholder is entitled to
rescind his or her tender by written notice to the Exchange Agent as set forth
in "The Exchange Offer - Withdrawal Rights" in the Prospectus. If such tender is
not rescinded by 5:00 P.M., New York City time, April 15, 1998, it will be
deemed accepted.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" IN THE PROSPECTUS.
THIS EXCHANGE OFFER EXPIRES AT 5:00 P.M., NEW YORK CITY TIME,
APRIL 15, 1998.
THE DATE OF THIS SUPPLEMENT NO. 1 TO THE PROSPECTUS IS ______________, 1998.
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SALE OF EAST BAYOU SORREL
On March 31, 1998, Fortune Natural Resources Corporation ("Fortune" or
"the Company") sold its interest in the East Bayou Sorrel field, Iberville
Parish, Louisiana to National Energy Group, Inc. for cash in the amount of
$4,695,000. The properties sold consisted of the Company's interest in the
Schwing #1 and #2 wells and all of the Company's leases, facilities and
interests in the East Bayou Sorrel area of mutual interest, as such area is
defined in the East Bayou Sorrel operating agreement. The sale is effective
April 1, 1998. The sale closed on March 31, 1998, whereupon the Company received
$4,535,000, which is net of ordinary closing adjustments.
The Company's interest in the two productive wells at East Bayou Sorrel
were pledged to secure the Company's Credit Facility with Credit Lyonnais. The
total balance outstanding under the Credit Facility prior to this sale was
$550,000. Concurrently with closing the sale of the East Bayou Sorrel field, the
Company paid down the outstanding balance of the Credit Facility by $540,000.
The Company plans to reinvest the remaining proceeds from the sale of East Bayou
Sorrel into its exploration, development and property acquisition activities,
including, for example, future anticipated exploration and development wells at
its Espiritu Santo Bay and LaRosa 3D seismic exploration projects.
The Schwing #1 and #2 wells began producing from permanent production
facilities in January 1997 and June 1997, respectively. Although both wells have
been shut-in since March 13, 1998 pending the repair of production facilities,
they accounted for a significant portion of the Company's operations during 1997
and proved reserves as of December 31, 1997. A third well in the field, the
Schwing #3, which spud October 9, 1997 was temporarily plugged and abandoned on
March 5, 1998 pending further evaluation of the well's potential. The Company's
share of this well is estimated to cost approximately $1 million as a result of
difficult drilling conditions and mechanical problems encountered while drilling
and attempting to complete the well. Selected financial information attributable
to the Company's interest in the East Bayou Sorrel field as reported in its 1997
operating and financial results is as follows:
Year Ended
December 31, 1997
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Production
Oil (Bbls) 55,000
Gas (Mcf) 78,000
Oil and Gas Revenues $ 1,241,000
Production and Operating Expense 205,000
Provision for Depletion, Depreciation
and Amortization* 430,000
As of December 31, 1997
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Estimated Net Reserve Quantities
of Total Proved Reserves
Oil (Bbls) 152,000
Gas (Mcf) 204,000
This represents 32% and 30% of the Company's oil and gas revenues and
equivalent oil production and 23% of the Company's estimated quantities of
equivalent proved oil reserves as of December 31, 1997. Consequently, the
Company's revenues and cash flow from operations will decrease significantly in
1998 unless the production is replaced through successful exploration and
development activities or through the acquisition of producing properties.
* Represents the estimated reduction in depreciation, depletion and
amortization expense reported by the Company in 1997 that would have
resulted from excluding the East Bayou Sorrel production and proved
reserves.
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RECENT STOCK AND OLD PUBLIC WARRANT PRICE
Since January 1, 1998, the high and low closing prices of the Common
Stock and the Old Public Warrants of the Company on the AMEX have been as
follows:
Old Public
Common Stock Warrants
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High Low High Low
1998
First quarter through March 30, 1998 $2 5/8 $1 3/8 $ 7/16 $ 3/16
On March 30, 1998, the closing price of the Common Stock on the AMEX
was $1.94 per share and the Old Public Warrants was $0.25 per warrant.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934 (the "Exchange Act") (File No. 1-12334) are incorporated in this
Prospectus by reference and are made a part hereof:
1. Annual Report on Form 10-K for the year ended December 31, 1997, filed on
March 3, 1998.
2. Current report on Form 8-K filed March 31, 1998.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon oral or written request, a copy of any or all of
the documents incorporated herein by reference (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference in
such documents). Written or telephone requests should be directed to Fortune
Natural Resources Corporation, 515 West Greens Road, Suite 720, Houston, Texas
77067. Attention: Dean W. Drulias, General Counsel (telephone (281) 872-1170).
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ITEM 16. EXHIBITS
Number Description
10.1 Assignment and Bill of Sale dated March 31, 1998, between
Fortune Natural Resources Corporation and National Energy
Group, Inc. (incorporated by reference to Registrant's
Form 8-K filed on March 31, 1998).
10.2 Letter Agreement dated March 31, 1998, between Fortune
Natural Resources Corporation and National Energy Group,
Inc. (incorporated by reference to Registrant's Form 8-K
filed on March 31, 1998).
23.1* Consent of KPMG Peat Marwick LLP
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*Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-2 and has duly authorized this
Post-Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on March 31, 1998.
FORTUNE NATURAL RESOURCES CORPORATION
By: /s/ Tyrone J. Fairbanks
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Tyrone J. Fairbanks
President and Chief Executive Officer
By: /s/ J. Michael Urban
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J. Michael Urban
Vice President and Chief Financial
and Accounting Officer
In accordance with the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following person in the capacities and on the dates stated.
Name Title Date
/s/ Tyrone J. Fairbanks
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Tyrone J. Fairbanks Chief Executive Officer
and Director March 31, 1998
/s/ Dean W. Drulias
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Dean W. Drulias Executive Vice President,
General Counsel, Corporate
Secretary and Director March 31, 1998
Graham S. Folsom*
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Graham S. Folsom Director March 31, 1998
William T. Walker, Jr.*
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William T. Walker, Jr. Director March 31, 1998
Barry Feiner*
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Barry Feiner Director March 31, 1998
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Gary Gelman Director March 31, 1998
D. R. Shaughnessy*
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D. R. Shaughnessy Director March 31, 1998
*By: /s/ Tyrone J. Fairbanks
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Tyrone J. Fairbanks
(Attorney-in-fact)
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CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Fortune Natural Resources Corporation:
We consent to the use of our report incorporated herein by reference in the
Post-Effective Amendment No. 1 to Form S-2 (No. 333-45469) dated March 31, 1998.
/s/ KPMG PEAT MARWICK LLP
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Houston, Texas
March 31, 1998
EXHIBIT 23.1
