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 November 24, 1999, as set forth in the pages
attached hereto:
Item 7. Financial Statements and Exhibits
-----------------------------------------
(amended 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: January 13, 2000 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 Southern Pacific Petroleum U.S.A. 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.
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND
PRO FORMA FINANCIAL INFORMATION
Sequentially
numbered
Description page
- ------------ ----
SOUTHERN PACIFIC PETROLEUM U.S.A. Properties:
Report of Independent Accountants 4
Statements of Revenue and Direct
Operating Expenses for the nine months
ended September 30, 1999 and the year
ended December 31, 1998. 5
Notes to Statements of Revenue and
Direct Operating Expenses for the
nine months ended September 30, 1999
and the year ended December 31, 1998. 6
PRIMEENERGY CORPORATION:
Condensed Consolidated Pro Forma Balance Sheet
September 30, 1999 (Unaudited) 8
Condensed Consolidated Pro Forma Statement of
Operations for the nine months
ended September 30, 1999 (Unaudited) 11
Condensed Consolidated Pro Forma Statement of
Operations for the year ended
December 31, 1998 (Unaudited) 12
Notes to Condensed Consolidated Pro Forma
Financial Statements (Unaudited) 13
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 purchased from Southern Pacific Petroleum
U.S.A. by PrimeEnergy Corporation for the year ended December 31, 1998.
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
December 24, 1999
4
SOUTHERN PACIFIC PETROLEUM U.S.A. PROPERTIES
STATEMENTS OF REVENUE AND DIRECT OPERATING EXPENSES
FOR THE PERIODS INDICATED
(In Thousands)
Nine Months Year
Ended Ended
September 30, 1999 December 31, 1998
(Unaudited) (Audited)
-------------- -----------------
Oil and gas revenue $ 1,558 $ 2,176
Direct lease operating
expenses and production
taxes 658 947
----------- -----------
Revenue in excess of
direct operating
expenses $ 900 $1,229
=========== ===========
See accompanying notes to statements of revenue and direct operating
expenses.
5<PAGE>
SOUTHERN PACIFIC PETROLEUM U.S.A. PROPERTIES
NOTES TO STATEMENTS OF REVENUE AND DIRECT OPERATING EXPENSES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND
THE YEAR ENDED DECEMBER 31, 1998
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
purchased by PrimeEnergy Corporation from Southern Pacific
Petroleum Company U.S.A.
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.
6<PAGE>
SOUTHERN PACIFIC PETROLEUM U.S.A. PROPERTIES
NOTES TO STATEMENTS OF REVENUE AND DIRECT OPERATING EXPENSES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND
THE YEAR ENDED DECEMBER 31, 1998
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 September 30, 1999 by PrimeEnergy Corporation pursuant to the
disclosures of Statement of Financial Accounting Standards, No. 69,
"Disclosures about Oil and Gas Producing Activities" ("SFAS 69").
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 September 30, 1999 is as follows:
Oil Gas
(MBO) (MMCF)
----- ------
Proved developed 112 1,673
Proved undeveloped 1 268
----- -----
Total Proved 113 1,941
===== =====
The standardized measure of discounted future net cash flows related
to the proved oil and gas reserves of the Properties as of September
30, 1999 is as follows (in thousands):
Future cash inflows $ 6,146
Future production and development costs ( 3,127)
---------
Future net cash flows 3,019
10% annual discount to reflect estimated timing of cash flow (933)
---------
Standardized measure of discounted future net cash flows $ 2,086
=========
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. The assets purchased from Southern Pacific Petroleum U.S.A.
did not represent a separate tax paying entity. Accordingly, the
standardized measure of discounted future net cash flows from proved
reserves is presented before deduction of federal income taxes. Future cash
inflows at September 30, 1999 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 September 30, 1999, based on
the costs and continuation of economic conditions existing at September 30,
1999. 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
(Unaudited)
The following unaudited condensed pro forma combined balance sheet
at September 30, 1999 reflects the acquisition of oil and gas property
interests purchased from Southern Pacific Petroleum U.S.A. as if the
transactions had occurred as of September 30, 1999.
CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
September 30,1999
(In thousands)
(Unaudited)
ASSETS
Pro Forma Adjustments
---------------------
Pro
Historical Debit Credit Forma
---------- ----- ------ -----
Current Assets:
Cash $ 3,016 1,813 (1) 1,813(2) $ 3,016
Restricted cash 1,240 1,240
Receivables 3,339 3,339
Due from related parties 3,147 3,147
Other current assets 412 412
------ ----- ----- ------
Total current assets 11,154 1,813 1,813 11,154
Property and equipment, at cost 52,766 1,813 (2) 54,579
Less accumulated depreciation,
depletion and valuation
allowance 33,040 33,040
------ ----- ----- ------
19,726 1,813 21,539
Other assets 951 951
------ ----- ----- ------
Total Assets $31,831 3,626 1,813 $33,644
====== ===== ===== ======
See notes to unaudited pro forma financial statements.
8<PAGE>
PRIMEENERGY CORPORATION
PRO FORMA FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
September 30, 1999
(In thousands)
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Pro Forma Adjustments
---------------------
Historical Debit Credit Pro
Forma
---------- ----- ------ -----
Accounts payable $ 6,067 $ 6,067
Accrued liabilities 1,847 1,847
Due to related parties 866 866
------ ----- ----- ------
Total current liabilities 8,780 8,780
Long-term bank debt 20,000 1,813(1) 21,813
Other long-term obligations 18 18
Stockholders' equity 3,033 3,033
------ ----- ----- ------
Total liabilities and
stockholders' equity $31,831 1,813 $33,644
====== ===== ===== ======
See notes to unaudited pro forma financial statements.
9<PAGE>
PRIMEENERGY CORPORATION
CONDENSED CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended September 30, 1999
Year Ended December 31, 1998
The following unaudited condensed pro forma statements of operations assume
the acquisition of oil and gas property interests purchased by PrimeEnergy
Corporation from Southern Pacific Petroleum U.S.A. (detail information on
this transaction was provided on Form 8-K filed November 24, 1999), occurred
as of January 1, 1998.
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
NINE MONTHS ENDED SEPTEMBER 30, 1999
(In Thousands)
(Unaudited)
Pro Forma Adjustments
--------------------
Pro
Historical Debit Credit Forma
---------- ----- ------ -----
Revenue:
Oil and gas sales $ 7,717 1,558(4) $ 9,275
District operating income 8,587 8,587
Administrative revenue 1,240 1,240
Reporting and management fees 254 254
Interest and other income 149 149
------ ------ ------ ------
Total revenue 17,947 - 1,558 19,505
------ ------ ------ ------
Costs and expenses:
Lease operating expense 4,264 658 (4) 4,922
District operating expense 6,486 6,486
Depreciation and depletion
of oil and gas properties 3,680 111 (3) 3,791
General and administrative
expense 2,173 2,173
Exploration costs 831 831
Interest expense 1,006 98 (5) 1,104
------ ------ ------ ------
Total costs and expenses 18,440 867 - 19,307
------ ------ ------ ------
Net income (loss) from
operations (493) 867 1,558 198
Gain on sale and exchange
of assets 16 16
------ ------ ------ ------
Net income (loss) before income
tax provision (477) 867 1,558 214
(Benefit) provision for
income taxes (31) 69 (6) 38
------ ------ ------ ------
Net income (loss) $ (446) 936 1,558 $ 176
====== ====== ====== ======
Primary income (loss) per
common share $ (0.10) $ 0.04
====== ====== ====== ======
Fully diluted income (loss) per
common share $ (0.10) $ 0.03
====== ====== ====== ======
Weighted average number of
common shares outstanding
(Primary) 4,434,128 4,434,128
========= =========
Weighted average number of
common shares outstanding
(Fully Diluted) 4,434,128 5,143,237
========= =========
See notes to unaudited pro forma financial statements.
11<PAGE>
PRIMEENERGY CORPORATION
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
(In Thousands)
(Unaudited)
Pro Forma Adjustments
---------------------
Pro
Historical Debit Credit Forma
---------- ----- ------ -------
Revenue:
Oil and gas sales $ 11,354 2,176(4) $ 13,530
District operating income 10,945 10,945
Administrative revenue 1,723 1,723
Reporting and management fees 301 301
Interest and other income 472 472
------ ------ ------ ------
Total revenue 24,795 - 2,176 26,971
------ ------ ------ ------
Costs and expenses:
Lease operating expense 6,695 947 (4) 7,642
District operating expense 8,265 8,265
Depreciation and depletion
of oil and gas properties 6,038 104 (3) 6,142
General and administrative
expense 2,899 2,899
Exploration costs 1,706 1,706
Interest expense 1,337 140 (5) 1,477
------ ------ ------ ------
Total costs and expenses 26,940 1,191 - 28,131
------ ------ ------ ------
Net income (loss) from
operations (2,145) 1,191 2,176 (1,160)
Gain on sale and exchange
of assets 270 270
------ ------ ------ ------
Net income (loss) before income
tax provision (1,875) 1,191 2,176 (890)
(Benefit) provision for income
taxes (183) 99 (6) (84)
------ ------ ------ ------
Net income (loss) $ (1,692) 1,290 2,176 $ (806)
====== ====== ====== ======
Primary income (loss) per
common share $ (0.38) $ (0.18)
====== ======
Fully diluted income (loss) per
common share $ (0.38) $ (0.18)
====== ======
Weighted average number of
common shares
outstanding(Primary) 4,471,201 4,471,201
========= =========
Weighted average number of
common shares outstanding
(Fully Diluted) 4,471,201 4,471,201
========= =========
See notes to unaudited pro forma financial statements.
12
PRIMEENERGY CORPORATION
NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
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
using the purchase method of accounting from Southern Pacific
Petroleum U.S.A.
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>
