SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________________________________
Form 8-K/A
AMENDMENT No. 1
Current Report Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
PrimeEnergy Corporation
___________________________________________________
(Exact Name of Registrant as Specified in its Charter)
0-7406
_____________________
(Commission File Number)
The undersigned Registrant hereby amends its current report
on Form 8K dated May 30, 1996, as set forth in the pages attached
hereto:
Item 7. Financial Statements and Exhibits
(filed herewith)
SIGNATURE
Pursuant of the requirement 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.
PrimeEnergy Corporation
Date: July 11, 1996 By:/s/ Beverly A. Cummings
Beverly A. Cummings
Chief Financial Officer
<PAGE>
Item 7. Financial Statements and Exhibits
(a) & (b) The financial statements of the properties purchased
from International Nederlanden (U.S.) Capital Corporation, which
were formerly owned by Saratoga Resources, Inc. and the related
pro forma financial information of PrimeEnergy Corporation are
listed in the Index to Financial Statement and Pro Forma
Financial Information included herein on page 3 of this report.
2<PAGE>
INDEX TO FINANCIAL STATEMENTS AND
PRO FORMA FINANCIAL INFORMATION
Sequentially
numbered
Description page
SARATOGA PROPERTIES:
Report of Independent Accountants 4
Statements of Revenue and Direct
Operating Expenses for the three months
ended March 31, 1996 and the year
ended December 31, 1995. 5
Notes to Statements of Revenue and
Direct Operating Expenses for the
three months ended March 31, 1996
and the year ended December 31, 1995. 6
PRIMEENERGY CORPORATION:
Condensed Consolidated Pro Forma Balance Sheet
March 31, 1996 (Unaudited) 8
Condensed Consolidated Pro Forma Statement of
Operations for the three months
ended March 31, 1996 (Unaudited) 11
Condensed Consolidated Pro Forma Statement of
Operations for the year ended
December 31, 1995 (Unaudited) 12
Notes to Consolidated Condensed Pro Forma
Financial Statements 13
Pro Forma Supplemental Information -
Oil and Gas Producing Activities
(Unaudited) 14
Notes to Pro Forma Supplemental
Information -
Oil and Gas Producing Activities 15
3<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Directors
PrimeEnergy Corporation
We have audited the accompanying statement of revenue and direct operating
expenses of Properties formerly owned by Saratoga Resources Inc., purchased
by PrimeEnergy Corporation from Internationale Nederlanden (U.S.) Capital
Corporation for the year ended December 31, 1995. Our responsibility is to
express an opinion on the statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall presentation of the statements. We believe that our audit
provides a reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission (for
inclusion in the Form 8-K filing of PrimeEnergy Corporation) and exclude
certain material expenses, as described in Note 1, that would not be
comparable to those resulting from the proposed future operation of the
properties.
In our opinion, the aforementioned statement referred to above, presents
fairly, in all material respects, the revenues and direct operating
expenses as described in Note 1 for the period referred to above, in
conformity with generally accepted accounting principles.
PUSTORINO, PUGLISI & CO., LLP
New York, New York
June 27, 1996
4<PAGE>
SARATOGA PROPERTIES
STATEMENTS OF REVENUE AND DIRECT OPERATING EXPENSES
FOR THE PERIODS INDICATED
Three Months Year
Ended Ended
March 31, 1996 December 31, 1995
(Unaudited) (Audited)
-------------- -----------------
Oil and gas revenue $ 820,800 $ 3,054,669
Direct lease operating
expenses and production
taxes 269,742 1,585,365
----------- -----------
Revenue in excess of
direct operating
expenses $ 551,058 $ 1,469,304
=========== ===========
See accompanying notes to statements of revenue and direct operating expenses.
5<PAGE>
SARATOGA PROPERTIES
NOTES TO STATEMENTS OF REVENUE AND DIRECT OPERATING EXPENSES
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND
THE YEAR ENDED DECEMBER 31, 1995
Note 1 - Basis of Presentation and Summary of Significant Accounting
- --------------------------------------------------------------------
Policies:
- --------
The accompanying statements present the revenue and direct operating
expenses attributable to the oil and gas property interests formerly owned
by Saratoga Resources, Inc. (the "Saratoga Properties") acquired by
PrimeEnergy Corporation ("PEC") from Internationale Nederlanden (U.S.)
Capital Corporation.
The Statements have been prepared on the accrual basis of accounting and
reflect only the revenue and direct operating expenses relating to the net
revenue interests purchased. Certain additional expenses that may have
been incurred in connection with the ownership of the Properties are not
reflected in the accompanying statements because such expenses are not
comparable to those which will result from the future operation of the
Properties. The expenses so excluded from the accompanying statements
consist of depletion and depreciation, interest on indebtedness,
exploration expenses, and other general and administrative expenses.
Oil and gas property interests are not taxpaying entities. Taxable income,
if any, arising from the operation of the properties accrues to the
Properties' owner. Accordingly, no provision for income taxes has been
reflected in the accompanying statements of revenue and direct operating
expenses.
Note 2 - Supplemental Information - Oil and Gas Producing Activity -
- --------------------------------------------------------------------
(Unaudited):
- -----------
The following estimates of proved oil and gas revenues and related
discounted future net cash flows of the Properties were prepared as of
January 1, 1996 by PEC, based in part upon the report of independent
petroleum and geological engineer pursuant to the disclosures of Statement
of Financial Accounting Standards, No. 69, "Disclosures about Oil and Gas
Producing Activities" ("SFAS 69").
6<PAGE>
SARATOGA PROPERTIES
NOTES TO STATEMENTS OF REVENUE AND DIRECT OPERATING EXPENSES
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND
THE YEAR ENDED DECEMBER 31, 1995
Note 2 - Supplemental Information - Oil and Gas Producing Activity -
- --------------------------------------------------------------------
(Unaudited) - Cont'd:
- --------------------
All of the reserves are located within the United States. A summary of the
net quantities of the Properties' crude oil and natural gas reserves as of
January 1, 1996 is as follows:
Oil Gas
(MBO) (MMCF)
----- ------
Proved developed 441 3,475
Proved undeveloped 100 1,298
----- -----
Total Proved 541 4,773
===== =====
The standardized measure of discounted future net cash flows related to the
proved oil and gas reserves of the Properties as of January 1, 1996 is as
follows (in thousands):
Future cash inflows $ 19,257
Future production and development costs ( 8,107)
Income Taxes (830)
---------
Future net cash flows 10,320
10% annual discount to reflect estimated timing of cash flow (2,916)
---------
Standardized measure of discounted future net cash flows $ 7,404
=========
The standardized measure of discounted future net cash flows relating to
proved oil and gas reserves was prepared in accordance with the provisions
of SFAS 69. Future cash inflows at January 1, 1996 were computed by
applying prices at that date to estimated future production. Future
production and development costs were computed by estimating the
expenditures to be incurred in developing and producing the proved oil and
gas reserves at January 1, 1996, based on the costs and continuation of
economic conditions existing at January 1, 1996. Future net cash flows
were discounted at a rate of 10% annually to derive the standardized
measure of discounted future net cash flows. This calculation procedure
does not necessarily result in an estimate of the fair market value of the
Properties.
The estimates of proved reserves are inherently imprecise and are
continually subject to revision based on production history, results of
additional exploration and development, price changes and other factors.
7<PAGE>
PRIMEENERGY CORPORATION
PRO FORMA FINANCIAL STATEMENTS
The following unaudited condensed pro forma combined balance sheet at March
31, 1996 reflects the acquisition of oil and gas property interests
formerly owned by Saratoga Resources, Inc. and acquired by PrimeEnergy
Corporation from Internationale Nederlanden (U.S.) Capital Corporation as
if the transactions had occurred as of March 31, 1996.
CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
March 31, 1996
(In thousands)
(Unaudited)
ASSETS
Pro Forma Adjustments Pro
Historical Debit Credit Forma
---------- ----- ------ -----
Current Assets:
Cash $ 843 7,261 (1) 7,261 (2) $ 843
Restricted Cash 893 893
Receivables:
Joint interest billings 620 620
Affiliates 2,125 2,125
Other 1,295 424 (2) 1,719
Other current assets 896 896
------ ------
Total current assets 6,672 7,096
Property and equipment, at cost 30,177 6,837 (2) 37,014
Less accumulated depreciation,
depletion and valuation
allowance 18,549 18,549
------ ------
11,628 18,465
Other assets 826 826
------ ------ ------ ------
Total Assets $ 19,126 14,522 7,261 $ 26,387
====== ====== ====== ======
See notes to unaudited pro forma financial statements.
8<PAGE>
PRIMEENERGY CORPORATION
PRO FORMA FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
March 31, 1996
(In thousands)
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Pro Forma Adjustments Pro
Historical Debit Credit Forma
---------- ----- ------ -----
Current portion -
long term debt $ 195 $ 195
Accounts payable 2,908 2,908
Accrued liabilities 1,271 1,271
Due to related parties 856 856
------ ------
Total current liabilities 5,230 5,230
Long-term bank debt 6,025 7,261 (1) 13,286
Other long-term obligations 794 794
Stockholders' equity 7,077 7,077
------ ------ ------ ------
Total liabilities and
stockholders' equity $ 19,126 7,261 $ 26,387
======== ====== ====== ========
See notes to unaudited pro forma financial statements.
9<PAGE>
PRIMEENERGY CORPORATION
CONDENSED CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1996
Year Ended December 31, 1995
The following unaudited condensed pro forma statements of operations assume
the acquisition of oil and gas property interests formerly owned by
Saratoga Resources Inc.,. and acquired by PEC from Internationale
Nederlanden (U.S.) Capital Corporation (detail information on this
transaction was provided on Form 8-K filed May 30, 1996), occurred as of
January 1, 1995.
The pro forma results of operations do not purport to be indicative of the
results of operations that would actually have occurred if the sale and
acquisition had been effective on or prior to the beginning of the periods
presented. These statements should be read in conjunction with the
historical financial statements and related notes, which are herein
incorporated by reference.
10<PAGE>
PRIMEENERGY CORPORATION
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996
(In Thousands)
(Unaudited)
Pro Forma Adjustments Pro
Historical Debit Credit Forma
---------- ----- ------ -----
Revenue:
Oil and gas sales $ 1,621 821 (4) $ 2,442
District operating income 2,294 2,294
Administrative revenue 386 386
Reporting and management fees 87 87
Interest and other income 58 58
------ ------ ------ ------
Total revenue 4,446 - 821 5,267
------ ------ ------ ------
Costs and expenses:
Lease operating expense 1,037 270 (4) 1,307
District operating expense 1,765 1,765
Depreciation and depletion
of oil and gas properties 624 170 (3) 794
Exploration costs 184 184
General and administrative
expense 688 688
Interest expense 138 149 (5) 287
------ ------ ------ ------
Total costs and expenses 4,436 589 - 5,025
------ ------ ------ ------
Net income from operations 10 589 821 242
Gain on sale and exchange
of assets 45 45
------ ------ ------ ------
Net income before income
tax provision 55 589 821 287
Provision for income taxes 19 16 (6) 35
------ ------ ------ ------
Net income $ 36 605 821 $ 252
====== ====== ====== ======
Primary income per common share $ 0.01 $ 0.04
====== ====== ====== ======
Fully diluted income per
common share $ 0.01 $ 0.04
====== ====== ====== ======
Weighted average number of
common shares outstanding
(Primary) 5,747,695 5,747,695
========= =========
Weighted average number of
common shares outstanding
(Fully Diluted) 6,121,384 6,121,384
========= =========
See notes to unaudited pro forma financial statements.
11<PAGE>
7PRIMEENERGY CORPORATION
NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
Pro Forma Adjustments
1. To record draw down on existing revolving line of credit with bank.
2. To record the acquisition of producing oil and gas properties and
receivables using the purchase method of accounting from
Internationale Nederlanden (U.S.) Capital Corporation. Total
Acquisition costs of $7,261,000 consists of $6,864,000 paid to seller,
$313,000 of PEC's direct third party costs related to the acquisition,
and $84,000 paid to Saratoga Resources as reimbursement of that
company's costs incurred in consummating the transaction
(receivables).
3. To record estimated depreciation and depletion attributed to
properties acquired.
4. To record revenue and lease operating expense attributed to properties
acquired.
5. To record interest expense on monies borrowed to acquire properties.
6. To record the tax effect of the above transaction on the financial
statements for the periods presented.
13<PAGE>
PRO FORMA SUPPLEMENTAL INFORMATION
OIL AND GAS PRODUCING ACTIVITIES
December 31, 1995
(Unaudited)
A pro forma summary of the combined quantities of proved oil and gas reserves
and the combined standardized measure of discounted future net cash flows
relating to proved oil and gas reserves of PrimeEnergy Corporation and the
acquisition of the oil and gas property interests from Internationale
Nederlanden (U.S.) Capital Corporation are presented below. The reserve
information presented is as of December 31, 1995. This information should be
read in conjunction with the notes that follow the tables and the historical
supplemental financial statement disclosures pertaining to oil and gas
producing activities in the audited financial statements of PrimeEnergy
Corporation.
A pro forma summary of the combined quantities of proved oil and gas reserves
is as follows:
PrimeEnergy I.N.G. Pro Forma
Corporation Acquisition Combined
----------- ----------- ---------
Total Proved:
Oil (BBLS) 905,000 541,000 1,446,000
Gas (MCF) 13,549,000 4,774,000 18,323,000
Total Developed:
Oil (BBLS) 905,000 441,000 1,346,000
Gas (MCF) 13,549,000 3,476,000 17,025,000
A pro forma summary of the combined standardized measure of discounted future
net cash flows relating to proved oil and gas reserves is as follows:
PrimeEnergy I.N.G. Pro Forma
Corporation Acquisition Combined
----------- ----------- ---------
Future cash inflows $ 41,946,000 $ 19,257,000 $ 61,203,000
Future production and
development costs (26,181,000) (8,107,000) (34,288,000)
Future income tax expense (837,000) (830,000) (1,667,000)
----------- ----------- -----------
Future net cash flows 14,928,000 10,320,000 25,248,000
10% annual discount to
reflect timing of cash
flows (5,794,000) (2,916,000) (8,710,000)
----------- ----------- -----------
Standardized measure of
discounted future net
cash flows $ 9,134,000 $ 7,404,000 $ 16,538,000
=========== =========== ===========
14<PAGE>
PRIMEENERGY CORPORATION
NOTES TO PRO FORMA SUPPLEMENTAL INFORMATION
OIL AND GAS PRODUCING ACTIVITIES
December 31, 1995
(Unaudited)
The pro forma estimate of proved oil and gas reserves and related valuation
were prepared by PrimeEnergy Corporation, based in part upon the report of
independent petroleum and geological engineers pursuant to the provisions
of Statement of Financial Accounting Standards No. 69, "Disclosures about
Oil and Gas Producing Activities" ("SFAS 69").
The standardized measure of discounted future net cash flows relating to
proved oil and gas reserves was prepared in accordance with the provisions
of SFAS 69. Future production and development costs were computed by
estimating the expenditures to be incurred in developing and producing the
proved oil and gas reserves assuming continuation of economic condition
existing at the respective dates indicated. Future net cash flows were
discounted at a rate of 10% annually to derive the standardized measure of
discounted future net cash flows. This calculation procedure does not
necessarily result in an estimate of the fair market value of the
Properties.
The estimates of proved reserves are inherently imprecise and are
continually subject to revision based on production history, results of
additional exploration and development, price changes and other factors.
15
