<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ______________
BARGO ENERGY COMPANY
(Exact name of small business issuer as specified in its charter)
Texas 0-8609 87-0239185
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification No.)
700 Louisiana, Suite 3700
Houston, Texas 77002
(Address of principal executive offices, including zip code)
(713)236-9792
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Securities Exchange Act of 1934 during the past
12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes [x ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
The Company had approximately 87,932,726 shares of common stock, par value
$0.01 per share, issued and outstanding as of August 10, 2000.
Transitional Small Business Disclosure Format (Check One): Yes No X
<PAGE> 2
PART I
FINANCIAL INFORMATION
-------------------------------------------------------------------------------
ITEM 1. FINANCIAL STATEMENTS
===============================================================================
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
However, in the opinion of management, all adjustments (which consist only of
normal recurring adjustments) necessary to present fairly the financial
position and results of operations for the periods presented have been made.
These condensed consolidated financial statements should be read in conjunction
with financial statements and the notes thereto included in the Company's Form
10-KSB filing for the year ended December 31, 1999.
<PAGE> 3
BARGO ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
----------------- -----------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 1,051,000 $ 2,375,000
Trade accounts receivable, no allowance for
doubtful accounts considered necessary:
Joint interest billings 216,000 210,000
Accrued oil and gas sales 29,428,000 7,629,000
Due from affiliates 60,000 19,000
-------------- --------------
TOTAL CURRENT ASSETS 30,755,000 10,233,000
-------------- --------------
PROPERTY AND EQUIPMENT
Oil and gas properties, full cost method 186,011,000 76,107,000
Other 805,000 696,000
-------------- --------------
TOTAL PROPERTY AND EQUIPMENT 186,816,000 76,803,000
-------------- --------------
Less accumulated depletion, depreciation
and amortization (13,327,000) (6,220,000)
-------------- --------------
NET PROPERTY AND EQUIPMENT 173,489,000 70,583,000
OTHER ASSETS
Goodwill, net of accumulated amortization of
$308,000 and $208,000 respectively 1,692,000 1,792,000
Loan costs, net of accumulated amortization of
$1,680,000 and $436,000 respectively 10,561,000 1,890,000
Other 591,000 41,000
-------------- --------------
TOTAL OTHER ASSETS 12,844,000 3,723,000
-------------- --------------
TOTAL ASSETS $ 217,088,000 $ 84,539,000
============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
BARGO ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
------------- -----------------
<S> <C> <C>
CURRENT LIABILITIES
Current portion of long-term debt $ -0- $ 6,000
Trade accounts payable 6,611,000 2,623,000
Accrued oil and gas proceeds payable 2,212,000 1,805,000
Accrued interest payable 988,000 84,000
Accrued income taxes payable 3,252,000 -0-
Due to affiliates 267,000 199,000
---------- ----------
TOTAL CURRENT LIABILITIES 13,330,000 4,717,000
---------- ----------
LONG TERM DEBT, less current portion 136,150,000 20,780,000
DEFERRED TAX LIABILITY 3,548,000 3,085,000
---------- ----------
REDEEMABLE PREFERRED STOCK, 10% cumulative; $.01
par value; 10,000,000 and 5,000,000 shares
authorized as of June 30, 2000 and December 31, 1999,
respectively and 5,000,000 shares outstanding as of
June 30, 2000 and December 31, 1999, net of unamortized
issuance costs 54,525,000 51,664,000
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; 200,000,000 and 120,000,000
shares authorized as of June 30, 2000 and December
31, 1999, respectively, and 87,932,726 shares
issued and outstanding as
of June 30, 2000 and December 31, 1999, respectively 922,000 921,000
Additional paid-in capital 6,878,000 6,878,000
Treasury stock (2,041,000) (2,040,000)
Retained earnings (deficit) 3,776,000 (1,466,000)
----------- ----------
TOTAL STOCKHOLDERS' EQUITY 9,535,000 4,293,000
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 217,088,000 $ 84,539,000
=========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
BARGO ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
----------------------------
2000 1999
----------- -----------
<S> <C> <C>
REVENUES
Oil and gas sales $ 36,049,000 $ 3,015,000
---------- ---------
TOTAL REVENUES 36,049,000 3,015,000
---------- ---------
COSTS AND EXPENSES
Lease operations and production taxes 11,279,000 1,383,000
General and administrative 2,246,000 804,000
Depletion, depreciation and amortization 5,541,000 1,181,000
--------- ---------
TOTAL EXPENSES 19,066,000 3,368,000
--------- ---------
OTHER INCOME (EXPENSE)
Interest income 56,000 1,000
Interest expense (5,398,000) (538,000)
--------- ---------
TOTAL OTHER INCOME AND (EXPENSE) (5,342,000) (537,000)
--------- ---------
INCOME (LOSS) BEFORE INCOME TAXES 11,641,000 (890,000)
INCOME TAX BENEFIT (EXPENSE)
Current (4,141,000) 0
Deferred (282,000) 302,000
--------- ---------
TOTAL INCOME TAX BENEFIT (EXPENSE) (4,423,000) 302,000
NET INCOME (LOSS) 7,218,000 (588,000)
REDEEMABLE PREFERRED STOCK DIVIDENDS,
INCLUDING ACCRETION (1,446,000) (658,000)
---------- ----------
NET INCOME(LOSS)ALLOCABLE TO COMMON
SHAREHOLDERS $ 5,772,000 $(1,246,000)
========= =========
EARNINGS (LOSS) PER COMMON SHARE - BASIC
Net income (loss) per common share $ .07 $ (.02)
========= =========
EARNINGS (LOSS) PER COMMON SHARE - DILUTED
Net income(loss) per common share $ .06 $ (.02)
========= =========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING
Basic 87,933,000 71,478,000
Diluted 103,265,000 71,478,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
BARGO ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------------
2000 1999
---------- -----------
<S> <C> <C>
REVENUES
Oil and gas sales $ 46,854,000 $ 5,216,000
---------- ---------
TOTAL REVENUES 46,854,000 5,216,000
---------- ---------
COSTS AND EXPENSES
Lease operations and production taxes 15,010,000 2,318,000
General and administrative 3,260,000 1,667,000
Depletion, depreciation and amortization 7,579,000 2,173,000
--------- ---------
TOTAL EXPENSES 25,849,000 6,158,000
--------- ---------
OTHER INCOME (EXPENSE)
Interest income 81,000 5,000
Interest expense (6,323,000) (1,409,000)
--------- ---------
TOTAL OTHER INCOME AND (EXPENSE) (6,242,000) (1,404,000)
--------- ----------
INCOME (LOSS) BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM 14,763,000 (2,346,000)
INCOME TAX BENEFIT (EXPENSE)
Current (5,147,000) -0-
Deferred (463,000) 797,000
--------- ---------
TOTAL INCOME TAX BENEFIT (EXPENSE) (5,610,000) 797,000
NET INCOME(LOSS)BEFORE EXTRAORDINARY ITEM 9,153,000 (1,549,000)
--------- ----------
EXTRAORDINARY LOSS ON EXTINGUISHMENT OF
DEBT (NET OF TAX OF $645,000) (1,051,000) -0-
--------- ---------
NET INCOME (LOSS) 8,102,000 (1,549,000)
REDEEMABLE PREFERRED STOCK DIVIDENDS,
INCLUDING ACCRETION (2,861,000) (658,000)
---------- ----------
NET INCOME (LOSS)ALLOCABLE TO COMMON
SHAREHOLDERS $5,241,000 $(2,207,000)
========== ===========
EARNINGS (LOSS) PER COMMON SHARE - BASIC
Net income (loss) per common share before
extraordinary item $ .07 $ (.04)
Net income (loss) per common share from
extraordinary item (.01) .00
---------- ----------
Net income (loss) per common share $ .06 $ (.04)
========== ==========
EARNINGS (LOSS) PER COMMON SHARE - DILUTED
Net income (loss) per common share
before extraordinary item $ .06 $ (.04)
Net income (loss) per common share from
extraordinary item (.01) .00
---------- ----------
Net income (loss) per common share $ .05 $ (.04)
========== ==========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING
Basic 87,933,000 59,842,000
Diluted 103,265,000 59,842,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
BARGO ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------------
2000 1999
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 8,102,000 $(1,549,000)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depletion, depreciation, and amortization 7,579,000 2,173,000
Amortization of debt issue costs 1,874,000 100,000
Extraordinary loss on extinguishments of debt 1,696,000 -0-
Deferred income taxes 463,000 (797,000)
--------- --------
19,714,000 (73,000)
Change in working capital items:
Increase in accounts receivable (21,805,000) (733,000)
Increase in due from affiliates (41,000) (48,000)
Increase in accounts payable and accrued
liabilities 8,552,000 1,335,000
Increase(decrease)in due to affiliates 68,000 (513,000)
Other (550,000) (8,000)
--------- --------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 5,938,000 (40,000)
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of oil and gas properties (145,240,000) (10,433,000)
Proceeds from the sale of oil and gas
properties 34,964,000 -0-
Additions to property and equipment (110,000) (27,000)
---------- --------
NET CASH (USED IN)INVESTING ACTIVITIES (110,386,000) (10,460,000)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 193,550,000 655,000
Purchase of treasury stock -0- (34,000)
Repayment of long-term debt (78,186,000) (38,004,000)
Proceeds from issuance of stock -0- 50,000,000
Stock issuance costs -0- (2,205,000)
Loan costs (12,240,000) (81,000)
Proceeds from exercise of stock options -0- 10,000
---------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 103,124,000 10,341,000
----------- ----------
NET (DECREASE) IN CASH (1,324,000) (159,000)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,375,000 1,241,000
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,051,000 $1,082,000
========== =========
NONCASH ITEMS:
Dividends on redeemable preferred stock $ 2,681,000 $ 658,000
========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 8
BARGO ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: THE COMPANY
Bargo Energy Company (the "Company" or "Bargo") is engaged primarily in the
acquisition, development and production of oil and gas reserves and operation
of oil and gas wells. The accompanying financial statements include the
accounts of the Company and its wholly owned subsidiaries, Bargo Petroleum
Corporation (BPC) and Future Cal-Tex Corporation (FCT). Intercompany accounts
and transactions are eliminated in consolidation. All material adjustments,
consisting only of normal recurring adjustments that, in the opinion of
management are necessary for a fair statement of the results for the interim
periods, have been reflected. These interim financial statements should be read
in conjunction with the annual consolidated financial statements of the
Company.
On February 16, 2000, Bargo's wholly-owned subsidiaries and partnerships,
Future Energy Corporation (FEC), BMC Development No. 1, Ltd. (BMC), Future
Acquisition 1995, Ltd. (FAQ) and NCI Shawnee Limited Partnership (NCI) merged
into Future Petroleum Corporation (FPC). In conjunction with the merger, the
name of Future Petroleum Corporation was changed to Bargo Petroleum
Corporation. Additionally, Alaska Eldorado Gold Company (AEG), a wholly owned
dormant subsidiary of Bargo, has been dissolved.
The preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires the Company's management to
make estimates and assumptions that affect the amounts reported in these
financial statements and accompanying notes. Significant assumptions are
required in the valuation of proved oil and gas reserves which, as described
above, may affect the amounts at which oil and gas properties are recorded.
Actual results could differ from these estimates.
NOTE 2: PROPERTY ACQUISITIONS AND DIVESTITURES
On March 31, 2000, the Company acquired interests in oil and gas properties
from Texaco Exploration and Production, Inc., Four Star Oil and Gas Company and
McFarland Energy, Inc. ("Texaco Acquisition") for a gross purchase price of
$161.1 million, before closing adjustments. Such amount has been included as an
addition to oil and gas properties. The final determination of the purchase
price and its allocation is subject to adjustment over the current fiscal year.
The effective date of the purchase is January 1, 2000. The properties are
located in the Permian Basin, East Texas, Oklahoma and Kansas. The Company
utilized a new credit facility to acquire the properties (see Note 3.)
<PAGE> 9
The following Bargo Energy Company pro forma information gives effect to the
Texaco Acquisition referred to above and the East Texas properties (as reported
on Form 8-K filed on November 19, 1999) as if they had been acquired January 1,
1999:
<TABLE>
<CAPTION>
Six months ended
June 30,
2000 1999
-------------------------
(amounts in thousands except per share amount)
<S> <C> <C>
Revenues $70,804 $45,878
Net income before extraordinary item $13,786 $ 106
Net income $12,735 $ 106
Earnings per share:
Basic - Net income (loss) per common share
before extraordinary item $ .12 $ (.01)
Net income (loss) per common share $ .11 $ (.01)
Diluted - Net income (loss) per common share $ .11 $ (.01)
before extraordinary item
Net income (loss) per common share $ .10 $ (.01)
</TABLE>
On May 31, 2000 the Company sold its Ardmore Basin producing oil and gas
properties in southern Oklahoma to Le Norman Partners, LLC for $31.9 million.
Bargo also completed the sale of its interest in the Russell Clearfork Unit to
Cross Timbers Oil Company for $2.9 million. Proceeds from both sales were used
to paydown outstanding indebtedness under the Company's term and revolving
credit facility. (See Note 3.) No gain or loss was recognized on these sales.
The full cost pool was adjusted for the sales price.
NOTE 3: CREDIT AGREEMENT
Effective March 31, 2000, the Company entered into a new syndicated credit
agreement ("Credit Agreement") with Chase Bank of Texas ("Chase") and several
other energy lending banks (all banks shall be referred to collectively as the
"Banks"), with Chase serving as administrative agent. Proceeds from the new
Credit Agreement were used to fully refinance the Company's previous bank
indebtedness and make the Texaco Acquisition. Borrowings under the Credit
Agreement are secured by mortgages covering substantially all of the Company's
producing oil and gas properties. As required by the Credit Agreement, the
Company has hedged 75% of estimated oil production generated from the Texaco
Acquisition through 2001 (see Note 4). In accordance with the Credit Agreement
the Banks were paid various underwriting, administrative and advisory fees
totaling $4.38 million. The Credit Agreement provides for a total commitment
amount of $245 million, comprised of a revolving and a term facility.
<PAGE> 10
The total commitment amount under the term facility was $45 million. The term
facility matures December 31, 2000. Borrowings under the term facility as of
June 30, 2000 were $22.5 million. The Company has received commitments from
several of its current stockholders to purchase preferred stock and has also
received a commitment from one of its lenders to convert a portion of the loan
into preferred stock, in an amount sufficient in the aggregate to repay the
term facility in full at maturity (see Note 5). The term facility bears
interest under the Base Rate plus an applicable margin of 2.0% or interest
under the LIBO Rate at the LIBO rate (reserve adjusted) plus 3.5%. The Company
may convert any portion of the outstanding debt from one interest rate type to
another in increments of $1 million. As the Company has both the ability and
intent to refinance its term facility, the amounts have been classified as long
term in the balance sheet at June 30, 2000.
The total commitment amount under the revolving facility is $200 million with a
current borrowing base of $150 million ("Borrowing Base"). The revolving
facility matures March 31, 2003. Borrowings under the revolving facility as of
June 30, 2000 were $113.65 million. Under the revolving facility, the Company
has a choice of two different interest rates; the Base Rate or the LIBO Rate.
While the term facility is outstanding, the debt under the revolving credit
facility bears interest under the Base Rate (which is the higher of the
lender's "Prime Rate" or the Federal Funds Rate plus .5%) plus an applicable
margin of 1.0% or interest under the LIBO Rate at the LIBO rate (reserve
adjusted) plus 2.5%. The Company may convert any portion of the outstanding
debt from one interest rate type to another in increments of $1 million. Upon
repayment of the term facility, the applicable margin is computed based on
Borrowing Base utilization ranging from 0%-.75% for Base Rate loans and
1.5%-2.25% for LIBO Rate loans.
In connection with the new Credit Agreement, the Company wrote off $1,696,000
of loan costs related to the previously existing revolving credit agreement.
Such amounts are shown separately, net of tax, as an extraordinary item.
NOTE 4: HEDGING AND DERIVATIVE ACTIVITIES
The Company engages in certain hedging activities related to the purchase and
delivery of oil and gas in the future. Such activities are accounted for in
accordance with Statement of Financial Accounting Standard No. 80, "Accounting
for Futures Contracts" (SFAS 80). The losses on hedging contracts are included
as a reduction of net revenues.
In addition to the hedges in place at December 31, 1999, the Company entered
into additional derivative contracts in the first quarter of 2000 in relation
to the Texaco Acquisition. The instruments cover approximately 75% (or
approximately 190,000 BBLS per month) of estimated oil production related to
the Texaco Acquisition through calendar year 2001. The contracts related to the
Texaco Acquisition production consist of a floor of $22 per BBL for April
through December 2000 and a floor of $21 per BBL for January through December
2001. The Company was required to hedge a portion of its production under the
terms of their new Credit Agreement (see Note 3). Accordingly, the cost of the
instrument ($6.22 million, paid in full during the first quarter of 2000), has
been capitalized as loan costs and will be amortized over the three year term
of the revolving credit facility.
NOTE 5: EQUITY BACKSTOP
The Company has received commitments from several of its current stockholders
to purchase preferred stock, and has also received a commitment from one of its
<PAGE> 11
lenders ("Converting Lender") to convert a portion of the term facility into
preferred stock, in an amount sufficient in the aggregate to repay the term
facility (see Note 3) in full at maturity (the purchase of additional preferred
stock and conversion of a portion of the term facility into preferred stock in
order to retire the term facility at maturity shall be known as the "Equity
Backstop"). If the Equity Backstop is invoked, new common stock will also be
issued to the preferred shareholders and the Converting Lender. In order to
secure the Equity Backstop the Company paid an Equity Backstop fee of $1.35
million to the preferred stockholders and the Converting Lender. Additionally,
the Company initiated a Consent Action to increase the Company's outstanding
capital stock, in preparation for the potential issuance of additional shares
as a result of the Equity Backstop. This Consent Action was approved by a
majority of the Company's stockholders on March 13, 2000 and became effective
April 10, 2000. The Company's articles of incorporation have been amended to
increase the authorized common shares to 200 million and authorized preferred
shares to 10 million. It is the Company's intent to repay the term facility
prior to its maturity.
NOTE 6: EARNINGS PER SHARE
Net income or loss per common share is based on the weighted average number of
common shares outstanding. In accordance with SFAS 128, "Earnings Per Share",
income available to common stockholders is reduced by the amount of dividends
on cumulative preferred stock and accretion of related stock issuance costs.
The Company's common stock equivalents consisted of stock options and warrants.
Weighted average basic common shares outstanding 87,933,000
Options and warrants outstanding (Treasury Stock Method) 15,332,000
----------
Weighted average fully diluted common and common equivalent
shares outstanding 103,265,000
===========
NOTE 7: RESTATEMENT OF PRIOR YEAR AMOUNTS
The amounts included in the consolidated statement of operations for the six
and three months ended June 30, 1999 have been restated from the amounts
previously filed in the Company's Form 10-QSB for the corresponding period. The
comparative figures have been restated to reflect the effects of the redeemable
preferred stock dividends for the redeemable preferred stock issued May 14,
1999. The effect of this restatement has been to reduce earnings per share by
$0.01 (from the previously reported amounts) for both the three and six month
periods ended June 30, 1999.
<PAGE> 12
--------------------------------------------------------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
================================================================================
This report includes "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended ("Exchange Act"). All statements
other than statements of historical fact included in the Report (and the
exhibits hereto), including without limitation, statements regarding the
Company's financial position and estimated quantities and net present values of
reserves, are forward looking statements. The Company can give no assurances
that the assumptions upon which such statements are based will prove to have
been correct. Important factors that could cause actual results to differ
materially from the Company's expectations ("Cautionary Statements") are
disclosed in the section "Risk Factors" included in the Company's Forms 10-KSB
and other periodic reports filed under the Exchange Act, which are herein
incorporated by reference. All subsequent written and oral forward looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified by the Cautionary Statements.
THE COMPANY
Bargo Energy Company (the "Company" or "Bargo") is engaged in the
acquisition and exploitation of oil and natural gas properties located onshore
primarily in the Gulf Coast Region (Texas and Louisiana), Permian Basin,
MidContinent, and California. The Company's principal business strategies
include (i) maximizing the value of its existing high-quality, long-life
reserves through efficient operating and marketing practices, (ii) conducting
detailed field studies using the latest technology to identify additional
reserves and exploration potential, and (iii) seeking acquisitions of producing
properties, with exploration and development potential in areas where the
Company has operating experience and expertise. Bargo intends to continue its
efforts to aggressively grow the Company's resource base both through oil and
gas property acquisitions and corporate consolidations.
STRATEGIC DEVELOPMENTS
On February 22, 2000, the Company agreed to purchase oil and gas
properties from subsidiaries of Texaco, Inc. for $161.1 million (the "Texaco
acquisition"). The effective date of the purchase is January 1, 2000 and
closing occurred on March 31, 2000. The properties are located in the Permian
Basin, East Texas, Oklahoma and Kansas. Aggregate current net production from
the properties totals approximately 9,000 barrels of oil and 11 million cubic
feet of gas per day. As of July 1, 2000, Bargo has proven reserves of
approximately 75 million equivalent barrels of oil. The purchase price paid for
the properties was subject to reduction for the joint working interest owners
exercise of preferential rights to purchase certain properties and for title
and other environmental defects identified before closing.
The Company received commitments from commercial banks to loan the
Company sufficient amounts to finance the entire acquisition and refinance
existing bank indebtedness. The term loan matures nine months following the
closing date. The Company has received commitments from several of its current
stockholders to purchase preferred stock, and has also received a commitment
from one of its lenders to convert a portion of the loan into preferred stock,
in an amount sufficient in the aggregate to repay this nine month loan in full.
These commitments to purchase preferred stock at maturity of the nine-month
loan also provide for the issuance of new common stock. The Company intends to
repay this loan from proceeds from asset sales and cash flow prior to its
maturity.
<PAGE> 13
On May 31, 2000 the Company completed its previously announced sale of
its Ardmore Basin producing oil and gas properties in southern Oklahoma to Le
Norman Partners, LLC for $31.9 million. Bargo also completed the sale of its
interest in the Russell Clearfork Unit to Cross Timbers Oil Company for $2.9
million. Proceeds from both sales were used to paydown existing indebtedness.
In addition, the Company intends to sell other non-core properties from the
Texaco acquisition, of which a portion of the proceeds would be available to
repay the term loan and revolving credit facility. The Company may also issue
new debt or equity securities to refinance part or all of the bank loans.
On July 31, 2000 the Company acquired an additional interest in the
South Coles Levee Unit (the Company now has a 100% WI) and acquired North Coles
Levee. Bargo is now the operator for both of these properties.
GENERAL
The Company's revenues, profitability and future growth and the
carrying value of its oil and gas properties are substantially dependent on
prevailing prices of oil and gas and its ability to find, develop and acquire
additional oil and gas reserves that are economically recoverable. The
Company's ability to maintain or increase its borrowing capacity and to obtain
additional capital on attractive terms is also influenced by oil and gas
prices.
Prices for oil and gas are subject to large fluctuations in response to
relatively minor changes in the supply of and demand for oil and gas, market
uncertainty and a variety of additional factors beyond the control of the
Company. These factors include weather conditions in the United States, the
condition of the United States economy, the actions of the Organization of
Petroleum Exporting Countries, governmental regulation, political stability in
the Middle East and elsewhere, the foreign supply of crude oil and natural gas,
the price of foreign imports and the availability of alternate fuel sources.
Any substantial and extended decline in the price of crude oil or natural gas
would have an adverse effect on the Company's carrying value of its proved
reserves, borrowing capacity, revenues, profitability and cash flows from
operations.
The Company uses the full cost method of accounting for the Company's
investment in oil and gas properties. Under the full cost method of accounting,
all costs of acquisition, exploration and development of oil and gas reserves
are capitalized into a "full cost pool." Oil and gas properties in the pool,
plus estimated future expenditures to develop proved reserves and future
abandonment, site remediation and dismantlement costs, are depleted and charged
to operations using the unit of production method based on the portion of
current production to total estimated proved recoverable oil and gas reserves.
To the extent that such capitalized costs (net of depreciation, depletion and
amortization) exceed the discounted future net cash flows on an after-tax basis
of estimated proved oil and gas reserves, such excess costs are charged to
operations. Once incurred, the write down of oil and gas properties is not
reversible at a later date even if oil or natural gas prices increase.
The Company does not have a specific acquisition budget because of the
unpredictability of the timing and size of forthcoming acquisition activities.
There is no assurance that the Company will be able to identify suitable
acquisition candidates in the future, or that the Company will be successful in
the acquisition of producing properties. In order to finance any possible future
acquisitions, the Company will either use borrowings available under its credit
facility or the Company may seek to obtain additional debt or equity financing
in the public or private capital markets. Further, there can be no assurances
that any future acquisitions made by the Company will be integrated successfully
into the Company's operations or will achieve desired profitability objectives.
<PAGE> 14
In June 1998 the Financial Accounting Standards Board issued SFAS 133"
Accounting for Derivative Instruments and Hedging Activities." (as amended by
SFAS 137 and SFAS 138) This standard is effective for fiscal years beginning
after June 15, 2000 (January 1, 2001 for the Company). SFAS 133 requires that
all derivative instruments be recorded on the balance sheet at their fair value.
Changes in the fair value of derivatives are recorded each period in current
earnings or other comprehensive income, depending on whether a derivative is
designated as part of a hedge transaction and, if it is, the type of hedge
transaction. The Company has not yet completed its evaluation of the impact of
the adoption of this new standard.
The Company implements oil and gas hedges as it deems appropriate to
ensure minimum levels of cash flow or as market conditions are believed to
create an opportunity to increase cash flows. At December 31, 1999 collars were
in place for portions of the Company's oil production for October 1 through
September 2000 at floors of $18.00 and ceilings of $20.75 and $23.08.
Contracted volumes total 50,200 barrels per month declining each month to
42,000 barrels representing approximately 14% of the Company's projected oil
production. Beginning October 2000 through September 2001 the Company has two
swaps in place at $17.55 and $18.05. Contracted volumes total 41,350 barrels
per month declining to 34,300 barrels per month representing approximately 13%
of the Company's projected oil production for that period.
Floors are in place for April 2000 through December 2000 at a price of
$22.00 per bbl on 1,791,672 bbls. Additionally, the Company has secured a
$21.00 per bbl floor for 2001 on a volume of 2,197,728 bbls. These floors
protect approximately 60% of the Company's current projected oil production.
The Company currently has no outstanding natural gas hedges.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of capital are its cash flows from
operations, borrowings and issuance of debt and equity securities.
The Company reported consolidated net income of $7,218,000 for the
quarter ended June 30, 2000 compared to a consolidated net loss of $588,000 for
the quarter ended June 30, 1999. This increase is due to the Company's
significant acquisition activity. At June 30, 2000, the Company had working
capital of $17,425,000, which was an $11,909,000 increase from the $5,516,000
of working capital that the Company had as of December 31, 1999. This increase
in working capital as of June 30, 2000 was due to accrued oil and gas sales
primarily related to the Texaco acquisition.
Effective March 31, 2000, the Company entered into a new credit
agreement with Chase Bank of Texas ("Chase")and several other energy lending
bank, with Chase serving as the administrative agent(the "Credit Agreement").
Borrowings under the Credit Agreement are secured by mortgages covering
substantially all of the Company's producing oil and gas properties as well as
by certain pledges of the Company's Common Stock. The Credit Agreement provides
a commitment amount of $200 million and the Company currently has a $150
million borrowing base ("Borrowing Base"). In addition to the $200 million
commitment, the Credit Agreement also provided for a $45 million Term Loan
which matures 9 months from the closing date. The Company has received
commitments from several of its current stockholders to purchase preferred
stock, and has also received a commitment from one of its lenders to convert a
portion of the loan into preferred stock, in an amount sufficient in the
aggregate to repay this nine month loan in full. These commitments to purchase
preferred stock at maturity of the nine-month loan also provide for the
issuance of new common stock.
The Company has a choice of two different interest rates; the Base Rate
or the LIBO Rate. While the Term Loan is outstanding, the debt under the
Borrowing Base loan bears interest under the Base Rate (which is the higher of
the lender's "Prime Rate" or the Federal Funds Rate plus .5%) plus an
<PAGE> 15
applicable margin of 1.0% or interest under the LIBO Rate at the LIBO rate
(reserve adjusted) plus 2.5%. The Term Loan bears interest under the Base Rate
plus an applicable margin of 2.0% and under the LIBO Rate plus 3.5%. The
Company may convert any portion of the outstanding debt from one interest rate
type to another in increments of $1,000,000 with a minimum transfer amount of
$1,000,000.
As of June 30, 2000 borrowings under the Credit Agreement were $22.5
million and $113.65 million for the term loan and the revolving credit
facility, respectively. The borrowing base was adjusted to $150 million on July
31, 2000 in conjunction with the Oklahoma property disposition and the South
and North Coles Levee Unit acquisitions (see Strategic Developments).
CASH FLOW TO OPERATING ACTIVITIES
Operating activities of the Company during the six months ended June
30, 2000 provided net cash of $5,938,000. In the same period during 1999,
operations used net cash of $40,000. Investing activities in the six months
ended June 30, 2000, used net cash of $110,386,000, due to the acquisition of
oil and gas properties. Financing activities in the six months ended June 30,
2000 provided net cash of $103,124,000 primarily due to proceeds from the
issuance of debt related to the Company's acquisition activity.
RESULTS OF OPERATIONS
Comparison of Quarters Ended June 30, 2000 and 1999
Production for the quarter ended June 30, 2000 increased by 1,202.8
MBOE, or 502%, to 1,442.6 MBOE versus the same period in 1999. This increased
production is due to the Texaco acquisition made in March, 2000.
Total revenues for the three months ended June 30, 2000 increased to
$36,049,000 from $3,015,000 for the same period in 1999, primarily due to
increased production as a result of the Company's oil and gas property
acquisitions. In addition, total revenues have increased due to stronger
pricing in 2000. This represents a 1096% increase over 1999. Production costs
increased from $1,383,000 in the three months ended June 30, 1999 to
$11,279,000 in the three months ended June 30, 2000 due to the purchase of
proved reserves. General and administrative expenses increased to $2,246,000
from $804,000 in 1999 due to overhead associated with the Company's increased
acquisition activity. The Company had net income of $7,218,000 for the three
months ended June 30, 2000 compared to a net loss of $588,000 for the same
period in 1999. Income before income taxes and extraordinary items increased by
$12,531,000 to $11,641,000 for the three months ended June 30, 2000 compared to
a net loss of $890,000 for the comparable period in 1999. Interest expense for
the three months ended June 30, 2000 was $5,398,000 compared to $538,000 for
the same period in 1999. Depreciation, depletion and amortization for the three
months ended June 30, 2000 was $5,541,000. For the same period in 1999, the
total was $1,181,000. This increase is primarily a result of increased
production volumes resulting from the Texaco acquisition.
Comparison of Six Months ended June 30, 2000 and 1999
Production for the six months ended June 30, 2000 increased by 1,514.6
MBOE, or 321%, to 1,986.5 MBOE versus the same period in 1999. This increased
production is due to the Texaco acquisition completed March 31, 2000.
Total revenues for the six months ended June 30, 2000 increased to
$46,854,000 from $5,216,000 for the same period in 1999, primarily due to
an increase in production from the Company's oil and gas property acquisitions.
This represents a 798% increase over 1999. Production costs increased from
$2,318,000 in the six months ended June 30, 1999 to $15,010,000 in the six
<PAGE> 16
months ended June 30, 2000 due to the purchase of proved reserves. General and
administrative expenses increased to $3,260,000 from $1,667,000 in 1999 due to
overhead associated with the Company's increased acquisition activity. The
Company had net income of $8,102,000 for the six months ended June 30, 2000
compared to a net loss of $1,549,000 for the same period in 1999. Income before
income taxes and extraordinary items increased by $17,109,000 to $14,763,000
for the six months ended June 30, 2000 compared to a net loss of $2,346,000 for
the comparable period in 1999. Interest expense for the six months ended June
30, 2000 was $6,323,000 compared to $1,409,000 for the same period in 1999.
Depreciation, depletion and amortization for the six months ended June 30, 2000
was $7,579,000. For the same period in 1999, the total was $2,173,000. This
increase is primarily a result of increased production volumes resulting from
the Texaco acquisition.
INFLATION
The Company's activities have not been, and in the near term are not
expected to be, materially affected by inflation or changing prices in general.
The Company's oil exploration and production activities are generally affected
by prevailing prices for oil.
<PAGE> 17
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PART II
OTHER INFORMATION
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
-------------------------------------------------------------------------------
(a) Exhibits.
Exhibit Number Title of Document
2. Plan of acquisition, reorganization, arrangement,
liquidation or succession
2.1 Purchase and Sale Agreement between Texaco
Exploration & Production Inc. and Bargo Petroleum
Corporation (Incorporated by reference from
Exhibit 2.1 to the Company's Current Report on
Form 8-K dated March 31, 2000, filed with the
Securities and Exchange Commission on April 17,
2000) *
2.2 Asset Purchase Agreement between Four Star Oil &
Gas Company and Bargo Petroleum Corporation
(Incorporated by reference from Exhibit 2.2 to the
Company's Current Report on Form 8-K dated March
31, 2000, filed with the Securities and Exchange
Commission on April 17, 2000) *
2.3 Asset Purchase Agreement between McFarland Energy,
Inc. and Bargo Petroleum Corporation (Incorporated
by reference from Exhibit 2.3 to the Company's
Current Report on Form 8-K dated March 31, 2000,
filed with the Securities and Exchange Commission
on April 17, 2000) *
3. Articles of Incorporation and By-laws
3.1 Articles of Incorporation of Bargo Energy Company
(Incorporated by reference from Exhibit 3.1 to the
Company's Current Report on Form 8-K dated April
26, 1999, filed with the Securities and Exchange
Commission on April 29, 1999)
3.2 Agreement and Plan of Merger, dated as of April 6,
1999 between Future Petroleum Corporation and FPT
Corporation (Incorporated by reference from
Exhibit 2.1 to the Company's Current Report on
Form 8-K dated April 26, 1999, filed with the
Securities and Exchange Commission on April 29,
1999)
3.3 By-laws of Bargo Energy Company (Incorporated by
reference from Exhibit 3.2 to the Company's
<PAGE> 18
Exhibit Number Title of Document
Current Report on Form 8-K dated April 26, 1999,
filed with the Securities and Exchange Commission
on April 29, 1999)
3.4 Amendment to Bargo Energy Company By-laws
(Incorporated by reference from Exhibit 3.4 to the
Company's Quarterly Report on Form 10-QSB for the
period ended March 31, 1999, filed with the
Securities and Exchange Commission on May 21, 1999)
3.5 Articles of Amendment to the Articles of
Incorporation of Bargo Energy Company
(Incorporated by reference from Exhibit 3.5 to the
Company's Quarterly report on Form 10-QSB for the
period ended March 31, 2000 filed with the SEC on
May 15, 2000.)
4. Instruments defining the rights of security holders
4.1 Certificate of Designations of Cumulative
Redeemable Preferred Stock, Series B (Incorporated
by reference from Exhibit 4.1 to the Company's
Quarterly Report on Form 10-QSB for the period
ended March 31, 1999, filed with the Securities
and Exchange Commission on May 21, 1999)
4.2 Certificate of Designations of Cumulative
Redeemable Preferred Stock, Series C (Incorporated
by reference from Exhibit 3.5 to the Company's
Quarterly report on Form 10-QSB for the period
ended March 31, 2000 filed with the SEC on May
15, 2000.)
10. Material Contracts
10.1
Subscription Agreement dated March 31, 2000,
among Bargo Energy Company, Energy Capital
Investment Company PLC, EnCap Energy Capital Fund
III-B, L.P., BOCP Energy Partners, L.P., EnCap
Energy Capital Fund III, L.P., Kayne Anderson
Energy Fund, L.P., BancAmerica Capital Investors
SBIC I, L.P., Eos Partners, L.P., Eos Partners
SBIC, L.P., Eos Partners SBIC II, L.P., and SGC
Partners II LLC. (Incorporated by reference from
Exhibit 10.1 to the Company's Current Report on
Form 8-K dated March 31, 2000, filed with the
Securities and Exchange Commission on April 17,
2000)
10.2 First Amendment to Second Amended and Restated
Shareholders' Agreement, dated March 31, 2000,
among Bargo Energy Company, B. Carl Price, Don Wm.
Reynolds, Energy Capital Investment Company PLC,
EnCap Equity 1994 Limited Partnership, BER
Partnership L.P., TJG Investments, Inc., BEC
Partnership, BOC Operating Corporation, Inc., Tim
J. Goff, Thomas Barrow, James E. Sowell, EnCap
Energy Capital Fund III-B, L.P., BOCP Energy
Partners, L.P., EnCap Energy
<PAGE> 19
Exhibit Number Title of Document
Capital Fund III, L.P., Kayne Anderson Energy Fund,
L.P., BancAmerica Capital Investors SBIC I, L.P., Eos
Partners, L.P., Eos Partners SBIC, L.P., Eos Partners
SBIC II, L.P., and SGC Partners II LLC. (Incorporated by
reference from Exhibit 10.2 to the Company's
Current Report on Form 8-K dated March 31, 2000,
filed with the Securities and Exchange Commission
on April 17, 2000)
10.3 Third Amendment to Registration Rights Agreement
dated March 31, 2000 among Energy Capital
Investment Company PLC, EnCap Equity 1994 Limited
Partnership, EnCap Energy Capital Fund III-B, L.P.,
BOCP Energy Partners, L.P., EnCap Energy Capital
Fund III, L.P., Kayne Anderson Energy Fund, L.P.,
BancAmerica Capital Investors SBIC I, L.P., Eos
Partners, L.P., Eos Partners SBIC, L.P., Eos
Partners SBIC II, L.P., and SGC Partners II LLC.
(Incorporated by reference from Exhibit 10.3 to the
Company's Current Report on Form 8-K dated March
31, 2000, filed with the Securities and Exchange
Commission on April 17, 2000)
10.4 First Amendment to Stock Purchase Agreement dated
March 31, 2000, among Energy Capital Investment
Company PLC, EnCap Energy Capital Fund III-B, L.P.,
BOCP Energy Partners, L.P., EnCap Energy Capital
Fund III, L.P., Kayne Anderson Energy Fund, L.P.,
BancAmerica Capital Investors SBIC I, L.P., Eos
Partners, L.P., Eos Partners SBIC, L.P., Eos
Partners SBIC II, L.P., and SGC Partners II LLC and
Bargo Energy Company. (Incorporated by reference
from Exhibit 10.4 to the Company's Current Report
on Form 8-K dated March 31, 2000, filed with the
Securities and Exchange Commission on April 17,
2000)
10.5 Assignment, Acknowledgment, Consent and Waiver dated
March 31, 2000, among Bargo Energy Company, Energy
Capital Investment Company PLC, EnCap Energy
Capital Fund III-B, L.P., BOCP Energy Partners,
L.P., EnCap Energy Capital Fund III, L.P., Kayne
Anderson Energy Fund, L.P., BancAmerica Capital
Investors SBIC I, L.P., Eos Partners, L.P., Eos
Partners SBIC, L.P., Eos Partners SBIC II, L.P.,
SGC Partners II LLC, and Chase Bank of Texas,
National Association. (Incorporated by reference
from Exhibit 10.5 to the Company's Current Report
on Form 8-K dated March 31, 2000, filed with the
Securities and Exchange Commission on April 17,
2000)
10.6 Escrow Agreement dated March 31, 2000, among Bargo
Energy Company, Energy Capital Investment Company
PLC, EnCap Energy Capital Fund III-B, L.P., EnCap
Equity 1994, L.P., BOCP Energy Partners, L.P.,
EnCap Energy Capital Fund III, L.P., Kayne Anderson
Energy Fund, L.P., BancAmerica Capital Investors
SBIC I, L.P., Eos Partners, L.P., Eos Partners
SBIC, L.P., Eos Partners SBIC II, L.P., SGC
Partners II LLC,
<PAGE> 20
Exhibit Number Title of Document
and Chase Bank of Texas, National Association.
(Incorporated by reference from Exhibit 10.6 to the
Company's Current Report on Form 8-K dated March 31,
2000, filed with the Securities and Exchange Commission
on April 17, 2000)
10.7 Acknowledgment and Consent dated March 31, 2000,
among Bargo Energy Company, Energy Capital
Investment Company PLC, EnCap Energy Capital Fund
III-B, L.P., BOCP Energy Partners, L.P., EnCap
Energy Capital Fund III, L.P., Kayne Anderson
Energy Fund, L.P., BancAmerica Capital Investors
SBIC I, L.P., Eos Partners, L.P., Eos Partners
SBIC, L.P., Eos Partners SBIC II, L.P., and SGC
Capital Partners II LLC. (Incorporated by reference
from Exhibit 10.7 to the Company's Current Report
on Form 8-K dated March 31, 2000, filed with the
Securities and Exchange Commission on April 17,
2000)
10.8 Indemnification Agreement dated March 31, 2000,
among Bargo Energy Company, Energy Capital
Investment Company PLC, EnCap Energy Capital Fund
III-B, L.P., BOCP Energy Partners, L.P., EnCap
Energy Capital Fund III, L.P., Kayne Anderson
Energy Fund, L.P., BancAmerica Capital Investors
SBIC I, L.P., Eos Partners, L.P., Eos Partners
SBIC, L.P., Eos Partners SBIC II, L.P., SGC
Partners II LLC, and Bankers Trust Company.
(Incorporated by reference from Exhibit 10.8 to the
Company's Current Report on Form 8-K dated March
31, 2000, filed with the Securities and Exchange
Commission on April 17, 2000)
10.9 Consent to Amendment to Registration Rights
Agreement by TJG Investments, Inc., BEC
Partnership, BER Partnership, L.P., BOC Operating
Corporation, Tim J. Goff, Thomas Barrow, James E.
Sowell, B. Carl Price, Don Wm. Reynolds, Christie
Price, Robert Price and Charles D. Laudeman.
(Incorporated by reference from Exhibit 10.9 to the
Company's Current Report on Form 8-K dated March
31, 2000, filed with the Securities and Exchange
Commission on April 17, 2000)
10.10 Credit Agreement dated March 31, 2000, among Bargo
Energy Company, Chase Bank of Texas National
Association, as administrative agent, Bankers Trust
Company, as syndication agent and the other agents
and lenders signatory thereto. (Incorporated by
reference from Exhibit 10.10 to the Company's
Current Report on Form 8-K dated March 31, 2000,
filed with the Securities and Exchange Commission
on April 17, 2000)
11. Statement regarding computation of per share earnings (1)
15. Letter on unaudited interim financial information (1)
18. Letter on change in accounting principles (1)
<PAGE> 21
Exhibit Number Title of Document
21. Subsidiaries of the Registrant (2)
22. Published report regarding matters submitted to vote (1)
23. Consents of experts and counsel (1)
24. Power of attorney (1)
27. Financial data schedule (2)
99. Additional exhibits (1)
-----------------------------------
(1) Inapplicable to this filing.
(2) Included herewith.
* Confidential treatment has been requested.
<PAGE> 22
Reports on Form 8-K.
The following reports on From 8-K were filed during the quarterly period ended
June 30, 2000:
Amended Current Report on Form 8-K/A dated March 31, 2000, filed May 26, 2000
reporting Item 2. Acquisition or Disposition of Assets.
--------------------------------------------------------------------------------
SIGNATURES
--------------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
BARGO ENERGY COMPANY
(Registrant)
Dated: August 14, 2000 By: /s/ Kimberly G. Seekely
Kimberly G. Seekely,
On behalf of the Registrant and
as Vice President - Treasurer
The following exhibits are included as part of this report:
<PAGE> 23
EXHIBIT INDEX
Exhibit Number Title of Document
2. Plan of acquisition, reorganization, arrangement,
liquidation or succession
2.1 Purchase and Sale Agreement between Texaco
Exploration & Production Inc. and Bargo Petroleum
Corporation (Incorporated by reference from
Exhibit 2.1 to the Company's Current Report on
Form 8-K dated March 31, 2000, filed with the
Securities and Exchange Commission on April 17,
2000) *
2.2 Asset Purchase Agreement between Four Star Oil &
Gas Company and Bargo Petroleum Corporation
(Incorporated by reference from Exhibit 2.2 to the
Company's Current Report on Form 8-K dated March
31, 2000, filed with the Securities and Exchange
Commission on April 17, 2000) *
2.3 Asset Purchase Agreement between McFarland Energy,
Inc. and Bargo Petroleum Corporation (Incorporated
by reference from Exhibit 2.3 to the Company's
Current Report on Form 8-K dated March 31, 2000,
filed with the Securities and Exchange Commission
on April 17, 2000) *
3. Articles of Incorporation and By-laws
3.1 Articles of Incorporation of Bargo Energy Company
(Incorporated by reference from Exhibit 3.1 to the
Company's Current Report on Form 8-K dated April
26, 1999, filed with the Securities and Exchange
Commission on April 29, 1999)
3.2 Agreement and Plan of Merger, dated as of April 6,
1999 between Future Petroleum Corporation and FPT
Corporation (Incorporated by reference from
Exhibit 2.1 to the Company's Current Report on
Form 8-K dated April 26, 1999, filed with the
Securities and Exchange Commission on April 29,
1999)
3.3 By-laws of Bargo Energy Company (Incorporated by
reference from Exhibit 3.2 to the Company's
<PAGE> 24
Exhibit Number Title of Document
Current Report on Form 8-K dated April 26, 1999,
filed with the Securities and Exchange Commission
on April 29, 1999)
3.4 Amendment to Bargo Energy Company By-laws
(Incorporated by reference from Exhibit 3.4 to the
Company's Quarterly Report on Form 10-QSB for the
period ended March 31, 1999, filed with the
Securities and Exchange Commission on May 21, 1999)
3.5 Articles of Amendment to the Articles of
Incorporation of Bargo Energy Company
(Incorporated by reference from Exhibit 3.5 to the
Company's Quarterly report on Form 10-QSB for the
period ended March 31, 2000 filed with the SEC on
May 15, 2000.)
4. Instruments defining the rights of security holders
4.1 Certificate of Designations of Cumulative
Redeemable Preferred Stock, Series B (Incorporated
by reference from Exhibit 4.1 to the Company's
Quarterly Report on Form 10-QSB for the period
ended March 31, 1999, filed with the Securities
and Exchange Commission on May 21, 1999)
4.2 Certificate of Designations of Cumulative
Redeemable Preferred Stock, Series C (Incorporated
by reference from Exhibit 3.5 to the Company's
Quarterly report on Form 10-QSB for the period
ended March 31, 2000 filed with the SEC on May
15, 2000.)
10. Material Contracts
10.1
Subscription Agreement dated March 31, 2000,
among Bargo Energy Company, Energy Capital
Investment Company PLC, EnCap Energy Capital Fund
III-B, L.P., BOCP Energy Partners, L.P., EnCap
Energy Capital Fund III, L.P., Kayne Anderson
Energy Fund, L.P., BancAmerica Capital Investors
SBIC I, L.P., Eos Partners, L.P., Eos Partners
SBIC, L.P., Eos Partners SBIC II, L.P., and SGC
Partners II LLC. (Incorporated by reference from
Exhibit 10.1 to the Company's Current Report on
Form 8-K dated March 31, 2000, filed with the
Securities and Exchange Commission on April 17,
2000)
10.2 First Amendment to Second Amended and Restated
Shareholders' Agreement, dated March 31, 2000,
among Bargo Energy Company, B. Carl Price, Don Wm.
Reynolds, Energy Capital Investment Company PLC,
EnCap Equity 1994 Limited Partnership, BER
Partnership L.P., TJG Investments, Inc., BEC
Partnership, BOC Operating Corporation, Inc., Tim
J. Goff, Thomas Barrow, James E. Sowell, EnCap
Energy Capital Fund III-B, L.P., BOCP Energy
Partners, L.P., EnCap Energy
<PAGE> 25
Exhibit Number Title of Document
Capital Fund III, L.P., Kayne Anderson Energy Fund,
L.P., BancAmerica Capital Investors SBIC I, L.P., Eos
Partners, L.P., Eos Partners SBIC, L.P., Eos Partners
SBIC II, L.P., and SGC Partners II LLC. (Incorporated by
reference from Exhibit 10.2 to the Company's
Current Report on Form 8-K dated March 31, 2000,
filed with the Securities and Exchange Commission
on April 17, 2000)
10.3 Third Amendment to Registration Rights Agreement
dated March 31, 2000 among Energy Capital
Investment Company PLC, EnCap Equity 1994 Limited
Partnership, EnCap Energy Capital Fund III-B, L.P.,
BOCP Energy Partners, L.P., EnCap Energy Capital
Fund III, L.P., Kayne Anderson Energy Fund, L.P.,
BancAmerica Capital Investors SBIC I, L.P., Eos
Partners, L.P., Eos Partners SBIC, L.P., Eos
Partners SBIC II, L.P., and SGC Partners II LLC.
(Incorporated by reference from Exhibit 10.3 to the
Company's Current Report on Form 8-K dated March
31, 2000, filed with the Securities and Exchange
Commission on April 17, 2000)
10.4 First Amendment to Stock Purchase Agreement dated
March 31, 2000, among Energy Capital Investment
Company PLC, EnCap Energy Capital Fund III-B, L.P.,
BOCP Energy Partners, L.P., EnCap Energy Capital
Fund III, L.P., Kayne Anderson Energy Fund, L.P.,
BancAmerica Capital Investors SBIC I, L.P., Eos
Partners, L.P., Eos Partners SBIC, L.P., Eos
Partners SBIC II, L.P., and SGC Partners II LLC and
Bargo Energy Company. (Incorporated by reference
from Exhibit 10.4 to the Company's Current Report
on Form 8-K dated March 31, 2000, filed with the
Securities and Exchange Commission on April 17,
2000)
10.5 Assignment, Acknowledgment, Consent and Waiver dated
March 31, 2000, among Bargo Energy Company, Energy
Capital Investment Company PLC, EnCap Energy
Capital Fund III-B, L.P., BOCP Energy Partners,
L.P., EnCap Energy Capital Fund III, L.P., Kayne
Anderson Energy Fund, L.P., BancAmerica Capital
Investors SBIC I, L.P., Eos Partners, L.P., Eos
Partners SBIC, L.P., Eos Partners SBIC II, L.P.,
SGC Partners II LLC, and Chase Bank of Texas,
National Association. (Incorporated by reference
from Exhibit 10.5 to the Company's Current Report
on Form 8-K dated March 31, 2000, filed with the
Securities and Exchange Commission on April 17,
2000)
10.6 Escrow Agreement dated March 31, 2000, among Bargo
Energy Company, Energy Capital Investment Company
PLC, EnCap Energy Capital Fund III-B, L.P., EnCap
Equity 1994, L.P., BOCP Energy Partners, L.P.,
EnCap Energy Capital Fund III, L.P., Kayne Anderson
Energy Fund, L.P., BancAmerica Capital Investors
SBIC I, L.P., Eos Partners, L.P., Eos Partners
SBIC, L.P., Eos Partners SBIC II, L.P., SGC
Partners II LLC,
<PAGE> 26
Exhibit Number Title of Document
and Chase Bank of Texas, National Association.
(Incorporated by reference from Exhibit 10.6 to the
Company's Current Report on Form 8-K dated March 31,
2000, filed with the Securities and Exchange Commission
on April 17, 2000)
10.7 Acknowledgment and Consent dated March 31, 2000,
among Bargo Energy Company, Energy Capital
Investment Company PLC, EnCap Energy Capital Fund
III-B, L.P., BOCP Energy Partners, L.P., EnCap
Energy Capital Fund III, L.P., Kayne Anderson
Energy Fund, L.P., BancAmerica Capital Investors
SBIC I, L.P., Eos Partners, L.P., Eos Partners
SBIC, L.P., Eos Partners SBIC II, L.P., and SGC
Capital Partners II LLC. (Incorporated by reference
from Exhibit 10.7 to the Company's Current Report
on Form 8-K dated March 31, 2000, filed with the
Securities and Exchange Commission on April 17,
2000)
10.8 Indemnification Agreement dated March 31, 2000,
among Bargo Energy Company, Energy Capital
Investment Company PLC, EnCap Energy Capital Fund
III-B, L.P., BOCP Energy Partners, L.P., EnCap
Energy Capital Fund III, L.P., Kayne Anderson
Energy Fund, L.P., BancAmerica Capital Investors
SBIC I, L.P., Eos Partners, L.P., Eos Partners
SBIC, L.P., Eos Partners SBIC II, L.P., SGC
Partners II LLC, and Bankers Trust Company.
(Incorporated by reference from Exhibit 10.8 to the
Company's Current Report on Form 8-K dated March
31, 2000, filed with the Securities and Exchange
Commission on April 17, 2000)
10.9 Consent to Amendment to Registration Rights
Agreement by TJG Investments, Inc., BEC
Partnership, BER Partnership, L.P., BOC Operating
Corporation, Tim J. Goff, Thomas Barrow, James E.
Sowell, B. Carl Price, Don Wm. Reynolds, Christie
Price, Robert Price and Charles D. Laudeman.
(Incorporated by reference from Exhibit 10.9 to the
Company's Current Report on Form 8-K dated March
31, 2000, filed with the Securities and Exchange
Commission on April 17, 2000)
10.10 Credit Agreement dated March 31, 2000, among Bargo
Energy Company, Chase Bank of Texas National
Association, as administrative agent, Bankers Trust
Company, as syndication agent and the other agents
and lenders signatory thereto. (Incorporated by
reference from Exhibit 10.10 to the Company's
Current Report on Form 8-K dated March 31, 2000,
filed with the Securities and Exchange Commission
on April 17, 2000)
11. Statement regarding computation of per share earnings (1)
15. Letter on unaudited interim financial information (1)
18. Letter on change in accounting principles (1)
<PAGE> 27
Exhibit Number Title of Document
21. Subsidiaries of the Registrant (2)
22. Published report regarding matters submitted to vote (1)
23. Consents of experts and counsel (1)
24. Power of attorney (1)
27. Financial data schedule (2)
99. Additional exhibits (1)
-----------------------------------
(1) Inapplicable to this filing.
(2) Included herewith.
* Confidential treatment has been requested.
