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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): DECEMBER 14, 1995
K N ENERGY, INC.
(Exact name of registrant as specified in its charter)
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KANSAS 1-6446 48-0290000
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or organization) Number) Identification No.)
370 VAN GORDON STREET
P. O. BOX 281304
LAKEWOOD, CO 80228-8304
(Address of principal executive offices) (Zip code)
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Registrant's telephone number, including area code: (303) 989-1740
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Item 5. Other Events.
On December 14, 1995 K N Energy, Inc. announced it's proposed merger
of K N's wholly owned oil & gas subsidiary, K N Production Company,
into Tom Brown, Inc., as well as the joint formation of a new gas
services company, and reference is hereby made to the press release
dated December 14, 1995, which is filed herewith as an exhibit and
incorporated herein by this reference.
Item 7. Financial Statements, Pro-Forma Financial Information and Exhibits.
(a) Financial Statements - None
(b) Pro-Forma Financial Statements - None
(c) Exhibits
1.1 Press release dated December 14, 1995
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SIGNATURE
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.
K N ENERGY, INC.
Date: December 18, 1995 By: /s/ William S. Garner, Jr.
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William S. Garner, Jr.
Vice President,
General Counsel and Secretary
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EXHIBIT INDEX
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Exhibit Number Exhibit Description Page
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1.1 Press release dated December 14, 1995
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[K N ENERGY LETTERHEAD]
[LOGO] NEWS
K N ENERGY AND TOM BROWN, INC. ANNOUNCE NEW JOINT TRANSACTIONS
LAKEWOOD, CO / MIDLAND, TX -- K N Energy, Inc. (NYSE - KNE) and Tom Brown, Inc.
(NASDAQ - TMBR) today jointly announced the execution of a letter of intent
providing for the merger of K N Energy's wholly-owned gas and oil subsidiary, K
N Production Company (KNPC), into Tom Brown and the formation of a new gas
services company.
The merger will be structured as an exchange of 0.9 million shares of Tom Brown
common stock and 1.0 million shares of new convertible preferred stock of Tom
Brown for all of the common shares of KNPC. The transaction will be treated as
a tax-free reorganization and will be accounted for under the purchase method.
Upon closing, Tom Brown's Board of Directors will be increased from seven to
nine members, with two directors designated by K N Energy.
The new company will be created to provide gathering, processing, marketing,
storage and field services to Rocky Mountain gas and oil producers and others.
It will also pursue the construction or acquisition of gathering, processing
and storage assets in areas of the Rocky Mountain region where KNPC or Tom
Brown currently own reserves. These areas will include portions of the Wind
River Basin in central Wyoming and gas producing areas in western Colorado and
southwestern Wyoming. The new company will be jointly owned by K N Energy (55
percent) and Tom Brown (45 percent). K N Energy will serve as operator of the
new venture, and the two companies will have equal representation on the
managing operating committee.
Under the new venture, Tom Brown will dedicate significant amounts of its Rocky
Mountain gas production to the new company for gathering, processing and
marketing. K N Energy will contribute substantial gas marketing contracts and
storage assets in western Colorado. The combined reserves initially dedicated
to this new company for marketing are approximately 180 billion cubic feet
equivalent (Bcfe).
At July 1, 1995, KNPC had proved reserves of approximately 45 Bcfe of gas
equivalent located primarily in the Piceance Basin of western Colorado and in
the Moxa Arch area of southwestern Wyoming. KNPC's proved reserves are about
90 percent gas and are 80 percent developed. KNPC also holds approximately
170,000 net undeveloped leasehold and mineral acres on which it has identified
an inventory of low-risk drilling prospects.
"This is a significant strategic alliance for K N in the Rocky Mountain region
with a premier low-cost producer," said Larry D. Hall, President and Chief
Executive Officer of K N Energy. "This alliance advances K N Energy's strategy
by leveraging our existing reserves into greater
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opportunity through additional gathering, processing, marketing, field services
and storage." Hall added, "As a result of the formation of this new company, K
N Energy will immediately gain access to approximately 180 Bcfe in reserves and
648,000 acres of undeveloped acreage. The combination of a producer and an
integrated gas company as owners, puts us in a unique position to provide gas
services immediately to a broader range of markets all along the gas value
chain in an increasingly competitive marketplace."
"It is an exciting opportunity to join with the innovative and exceptional
leadership of K N Energy in a joint venture that will benefit both companies,"
said Don Evans, Chairman and Chief Executive Officer of Tom Brown, Inc. "KNPC
provides us with steady cash flow and development drilling opportunities
adjacent to existing producing fields. These properties complement our Wind
River Basin activity and maintain our primary objective of staying focused in
the Rocky Mountain region."
The convertible preferred stock will have a liquidation value of $25.00 per
share and a coupon of 7.0%, and each preferred share will be convertible into
1.6660 shares of common stock of Tom Brown. K N Energy will have customary
registration rights for the shares it receives.
Consummation of the merger and the formation of the new company are expected to
be contemporaneous and are conditioned on the execution of definitive
documentation, certain regulatory approvals and other customary terms and
conditions. Closing is anticipated to occur within the next sixty days.
K N Energy is a natural gas services company and has operations in eight
states. The services provided include gas gathering, processing, marketing,
storage, transportation and retail gas distribution services. K N Energy has
annual sales exceeding $1 billion and assets of approximately $1.2 billion.
Tom Brown, Inc. is an independent energy company engaged in the domestic
exploration for, and the acquisition, development, production and sale of,
natural gas and crude oil. As of December 31, 1994, the Company's natural gas
reserves were approximately 180 Bcf and its oil reserves were approximately 4.5
MMBbls. Tom Brown Inc. recently announced it intends to acquire substantially
all the assets of Presidio Oil Co.
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Release Date: Immediate Release - December 14, 1995
Contacts: K N Energy, Inc. - Karla Kimrey - (303) 763-3489
Tom Brown, Inc. - Donald L. Evans - (915) 682-9715
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