<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) October 31, 1996
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AMERAC ENERGY CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-9933 75-2181442
(Commission File Number) (I.R.S. Employer Identification No.)
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1201 Louisiana, Suite 3350; Houston, Texas 77002
(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code (817) 339-1010
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
See Note 1 - Texan Gardens Acquisition
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Statement of Revenues and Direct Operating Expenses of Properties Acquired
(b) Pro Forma Financial Information
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<PAGE>
UNAUDITED STATEMENT OF REVENUES AND DIRECT
OPERATING EXPENSES OF THE TEXAN GARDEN PROPERTIES
SOLD TO AMERAC ENERGY CORPORATION
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<TABLE>
<CAPTION>
For the year ended For the six months ended
December 31, June 30,
1995 1996
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<S> <C> <C>
Oil, gas and related product sales $634,000 $237,000
Lease operating expense 380,000 95,000
-------- --------
Excess of revenues over
direct operating expenses $254,000 $142,000
======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
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<PAGE>
NOTES TO THE UNAUDITED STATEMENT OF REVENUES AND
DIRECT OPERATING EXPENSES OF THE ACQUIRED PROPERTIES
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1. BASIS OF PRESENTATION
The accompanying Unaudited Historical Financial Summary represents the
interests in the revenues and direct operating expenses of the gas and
condensate producing properties acquired by Amerac Energy Corporation
(Amerac) from L. B. Industries, Inc., and Larry Barnes (collectively
"LBI"), on August 16, 1996, effective March 1, 1996, for cash consideration
of $1.85 million. The producing properties acquired are located in the
Texan Gardens Field, Hidalgo, Texas.
The properties acquired were not operated as a separate unit, division or
other entity by LBI and, accordingly, separate historical financial
statements prepared in accordance with generally accepted accounting
principles (GAAP) do not exist. A determination of the historical general
and administrative expenses and other indirect expenses which were
attributable to the properties acquired would not be possible or indicative
of the level of such expenses to be incurred by Amerac. The depreciation
charges of LBI associated with the acquired properties would be based upon
historical costs and are not relevant to the ongoing financial reporting of
Amerac, or related investor decisions, since the properties will be
depreciated over future periods based upon Amerac's acquisition costs. The
presentation herein of historical financial statements reflecting financial
position, results of operations and cash flows required by GAAP was not
practicable in these circumstances. Accordingly, the Historical Financial
Summary is presented in lieu of the financial statements required under
Item 310 (b) of Securities and Exchange Commission Regulation S-B.
The gas and condensate and direct operating expenses shown in the
Historical Financial Summary may not be representative of future
operations.
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<PAGE>
NOTES TO THE UNAUDITED STATEMENT OF REVENUES AND
DIRECT OPERATING EXPENSES OF THE ACQUIRED PROPERTIES
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2. OIL AND GAS RESERVES INFORMATION (Unaudited)
Unaudited reserve information as of December 31, 1995 related to the
Acquired Properties is presented in the table below.
<TABLE>
<CAPTION>
Gas
Oil and Gas Reserves Quantities (Mcf)
------------------------------- ------------
<S> <C>
PROVED DEVELOPED RESERVES:
December 31, 1994 4,916,255
Production (393,290)
-----------
December 31, 1995 4,522,965
===========
</TABLE>
The standardized measure of discounted future net cash flows ("standardized
measure") relating to proved oil and gas reserves acquired is calculated in
accordance with Statement of Financial Accounting Standards No. 69. The
standardized measure has been prepared assuming year-end selling prices adjusted
for future fixed and determinable contractual price changes, year-end
development and production costs and a 10% annual discount rate. The
standardized measure is not the fair market value of the mineral interests sold
and the standardized measure presented for the proved oil and gas reserves is
not representative of their value.
<TABLE>
<CAPTION>
December 31,1995
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<S> <C>
Future cash inflows $10,636,000
Future production and
development costs 5,950,000
-----------
Future net cash flows undiscounted 4,686,000
10% annual discount for estimated
timing of cash flows 2,074,000
-----------
STANDARDIZED MEASURE OF DISCOUNTED
FUTURE NET CASH FLOWS $ 2,612,000
===========
</TABLE>
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<PAGE>
AMERAC ENERGY CORPORATION
Pro Forma Condensed Consolidated Financial Information
(Unaudited)
The following unaudited pro forma condensed consolidated financial information
combines the historical information of the Registrant ("Amerac"), including the
January 1996 Fremont Energy Company acquisition, and the properties acquired in
the Texan Gardens Field acquisition ("Acquired Properties") on August 16, 1996,
together with the related pro forma adjustments which are based on estimates and
assumptions explained in further detail in the accompanying notes. The
pro forma statements of operations for the six months ended June 30, 1996 and
for the year ended December 31, 1995 reflect the consolidated operations of
Amerac and the Acquired Properties as if these acquisitions were January 1,
1995, as well as if the conversion of the $4.00 Senior Preferred Stock occurred
on January 1, 1995. The unaudited pro forma balance sheet at June 30, 1996
reflects the transactions as if they had occurred on the last day of the period.
The unaudited pro forma condensed consolidated balance sheet and condensed
consolidated statements of operations are provided for comparative purposes only
and should be read in conjunction with the historical consolidated financial
statements of the Registrant and the historical unaudited statements of revenues
and direct operating expenses of the Acquired Properties and the related notes
thereto included herewith. The pro forma information presented is not
necessarily indicative of the future combined financial results or as they might
have been for the periods presented.
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<PAGE>
AMERAC ENERGY CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1996
<TABLE>
<CAPTION>
AMERAC
HISTORICAL ADJUSTMENTS PRO FORMA
-------------- ------------ --------------
(Note 2)
<S> <C> <C> <C>
A S S E T S
Current Assets
Cash and cash equivalents $ 571,000 $ (566,000) $ 5,000
Trade Receivables 1,492,000 - 1,492,000
------------- ----------- -------------
Total Current Assets 2,063,000 (566,000) 1,497,000
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Oil and gas properties 17,242,000 1,855,000 19,097,000
Other Assets 436,000 - 436,000
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TOTAL ASSETS $ 19,741,000 $ 1,289,000 $ 21,030,000
============= =========== =============
L I A B I L I T I E S A N D S T O C K H O L D E R S' E Q U I T Y
Current Liabilities
Accrued liabilities and payables $ 1,078,000 $ - $ 1,078,000
Current portion of Notes Payable Banks 3,000,000 - 3,000,000
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Total Current Liabilities 4,078,000 - 4,078,000
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Long-term Liabilities
Notes Payable Banks 6,490,000 1,289,000 7,779,000
Contract Obligation 205,000 - 205,000
Other long-term liabilities 323,000 - 323,000
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Total Long-Term Liabilities 7,018,000 1,289,000 8,307,000
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Stockholders' Equity
Senior Preferred Stock 1,868,000 (1,868,000) -
Common Stock 1,278,000 841,000 2,119,000
Additional paid-in capital 143,446,000 1,027,000 144,473,000
Accumulated deficit (137,947,000) - (137,947,000)
------------- ----------- -------------
Stockholders' Equity 8,645,000 - 8,645,000
------------- ----------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 19,741,000 $ 1,289,000 $ 21,030,000
============= =========== =============
</TABLE>
The accompanying notes are an integral part of the pro forma
condensed consolidated financial information.
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<PAGE>
AMERAC ENERGY CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended June 30, 1996
--------------------------------------------------
Amerac Acquired
Historical Properties Adjustments Pro Forma
------------ ---------- ----------- -----------
(Note 3) (Note 3)
<S> <C> <C> <C> <C>
REVENUES
Oil, gas and related
product sales $ 4,848,000 $237,000 $ - $ 5,085,000
Other operating income 46,000 - - 46,000
----------- -------- ----------- -----------
Total Revenues 4,894,000 237,000 - 5,131,000
----------- -------- ----------- -----------
EXPENSES
Lease operations 980,000 95,000 - 1,075,000
Exploration expenses,
including dry hole costs
and impairments 8,000 - - 8,000
Depreciation and amortization 994,000 - 84,000 1,078,000
Administrative 1,122,000 - - 1,122,000
(Gain) loss on sale of
properties and other (125,000) - - (125,000)
Interest 417,000 - 60,000 477,000
----------- -------- ----------- -----------
Total Expense 3,396,000 95,000 144,000 3,635,000
----------- -------- ----------- -----------
Income (loss) before tax 1,498,000 142,000 (144,000) 1,496,000
Provision for federal
income tax - - - -
----------- -------- ----------- -----------
NET INCOME (LOSS) 1,498,000 142,000 (144,000) 1,496,000
Preferred dividends (411,000) - 411,000 -
----------- -------- ----------- -----------
NET INCOME APPLICABLE TO
COMMON SHAREHOLDERS $ 1,087,000 $142,000 $ 267,000 $ 1,496,000
=========== ======== =========== ===========
NET INCOME PER COMMON SHARE $ .04 $ .04
=========== ===========
Average common shares
outstanding 24,421,000 17,178,000 41,599,000
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the pro forma condensed
consolidated financial information.
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<PAGE>
AMERAC ENERGY CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31, 1995
-----------------------------------------------------
Amerac
12/31/95 10K Acquired
Proforma Properties Adjustments Pro Forma
------------ ------------ ------------ -----------
REVENUES (NOTE 3(a)) (NOTE 3(b)) (NOTE 3)
<S> <C> <C> <C> <C>
Oil, gas and related
product sales $ 6,908,000 $ 634,000 $ - $ 7,542,000
Other operating income - - - -
Gain on sale of assets 850,000 - - 850,000
Interest income 74,000 - - 74,000
----------- ----------- ----------- -----------
Total Revenues 7,832,000 634,000 - 8,466,000
----------- ----------- ----------- -----------
EXPENSES
Lease operations 1,927,000 380,000 - 2,307,000
Exploration expenses,
including dry hole costs
and impairments 246,000 - - 246,000
Depreciation and amortization 2,372,000 - 169,000 2,541,000
Administrative 1,767,000 - - 1,767,000
Interest 1,009,000 - 109,000 1,118,000
----------- ----------- ----------- -----------
Total Expenses 7,321,000 380,000 278,000 7,979,000
----------- ----------- ----------- -----------
Income (loss) before tax 511,000 254,000 (278,000) 487,000
Provision for federal
income tax - - - -
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM $ 511,000 $ 254,000 $ (278,000) $ 487,000
DIVIDENDS (807,000) - 807,000 -
----------- ----------- ----------- -----------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM APPLICABLE
TO COMMON SHAREHOLDERS $ (296,000) $ 254,000 $ 529,000 $ 487,000
=========== =========== =========== ===========
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM
PER COMMON SHARE $ (.01) $ .01
=========== ===========
Average common shares
outstanding 22,894,000 17,178,000 39,776,000
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the pro forma consolidated
condensed financial information.
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<PAGE>
AMERAC ENERGY CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
1. TRANSACTIONS
The Company acquired on August 16, 1996, a majority interest in sixteen gas
wells in the Texas Gardens Field (The "Texan Gardens" acquisition), located
in Hidalgo County, Texas. Based on a March 1, 1996 effective date, the
Company estimates that proved reserves associated with this $1.85 million
acquisition total 4.4 BCFE.
2. PRO FORMA BALANCE SHEET ADJUSTMENTS
The accompanying unaudited pro forma condensed consolidated balance sheet
reflects the transaction as of June 30, 1996 and includes the following
adjustments.
(a) The cash portion of the purchase price is funded through bank
borrowings to the limit of available credit with the balance paid in
cash.
(b) The aggregate purchase price of $1,855,000 reflects the allocation of
the purchase price to proved producing properties and includes costs
and adjustments to the purchase price.
(c) Bank borrowings are classified as current and long-term notes payable
based on the actual bank agreement used to fund the acquisitions.
(d) The $4.00 Senior Preferred Stock conversion is presented by eliminating
the Preferred Stock balance and recording the additions to Common Stock
and Additional Paid-in Capital.
3. PRO FORMA STATEMENT OF OPERATION ADJUSTMENTS
(a) The "Amerac 12/31/95 10K Pro Forma" in the December 31, 1995 Pro Forma
Condensed Consolidated Statement of Operations represents the Pro Forma
results reflected in the December 31, 1995 Form 10K which includes the
historical results of operations of Amerac for the year ended December
31, 1995, and results of operations associated with the January 1996
Fremont Energy Company acquisition as if this acquisition had been
effective at the beginning of the period as well as certain immaterial
acquisitions completed in 1995.
(b) The information reflected as "Acquired Properties" herewith pertains
only to the direct operating results from the producing properties
acquired in the Texan Gardens Field.
(c) Depreciation, depletion and amortization expense has been computed
using the units of production method and reflects the Company's
increased investment in oil and gas properties, increased production
and estimated reserves related thereto.
(d) Interest expense was calculated assuming the acquisition took place on
January 1, 1995. Interest was calculated using a nine and one quarter
percent (9.25%) annual percentage rate.
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<PAGE>
AMERAC ENERGY CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(e) No additional general and administrative expense is expected as the
Company believes it can absorb these operations without additional
personnel or administrative expense.
(f) As the Company has a large net operating loss carryforward, no income
tax provision is required.
(g) Reflects elimination of Preferred Stock dividends related to the
conversion to Common Stock as if it occurred at the beginning of the
period.
4. EARNINGS PER SHARE
(a) Net income or loss per common share is computed by dividing the net
income or loss attributable to common shareholders by the weighted
average number of shares of Common Stock outstanding.
(b) The weighted average number of shares of Common Stock outstanding is
adjusted for the conversion of the $4.00 Senior Preferred Stock. The
conversion of the $4.00 Senior Preferred Stock was approved in an
annual Stockholder meeting held on July 11, 1996. One share of $4.00
Senior Preferred Stock was converted to nine (9) shares of Common
Stock.
5. OIL AND GAS RESERVE INFORMATION
The proved reserves relating to the Acquired Properties would have
represented approximately 17% of Amerac's total proved reserves as of
December 31, 1995 including the Fremont Energy Company acquisition which,
after including the Acquired Properties, would have been approximately 30.6
BCFE. Amerac's reserve quantities were estimated by an independent oil and
gas reservoir engineering firm; however, the reserve quantities of the
Acquired Properties were estimated by an in-house petroleum engineers. All
estimates were prepared in accordance with guidelines established by the
Securities and Exchange Commission. All of the reserves are located within
the United States.
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<PAGE>
SIGNATURE
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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 thereunto duly authorized.
AMERAC ENERGY CORPORATION
(Registrant)
By: /s/ JEFFREY L. STEVENS
----------------------------
Jeffrey L. Stevens
Sr. Vice President and
Chief Financial Officer
Date: October 31, 1996
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