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UNITED STATES
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 20, 1996
AMERICAN EXPLORATION COMPANY
(Exact Name of Registrant as Specified in Its Charter)
0-11871
(Commission File Number)
DELAWARE 74-2086890
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1331 LAMAR, SUITE 900
HOUSTON, TEXAS 77010
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 756-6000
N/A
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OF ASSETS
On December 20, 1996, American Exploration Company (the "Company")
acquired from New York Life Insurance Company ("New York Life") and
certain of its affiliates (collectively, the "Limited Partners") the
Limited Partners' aggregate 80% interest in the net assets of Ancon
Partnership Ltd. ("Ancon") for a purchase price of approximately $12.9
million. The acquisition was funded through borrowings under the
Company's bank credit facility.
The net assets acquired by the Company included interests in proved
oil and gas reserves totaling an estimated 2.3 million BOE as of
October 1, 1996, the effective date of the transaction. The interests
in oil and gas properties were valued at approximately $9 million, and
the remaining purchase price was attributable to acquired working
capital. The acquisition of the Limited Partners' interests increased
the Company's net ownership position in several of its major
properties.
Ancon is a Texas limited partnership which was formed by the Company
and New York Life to acquire, explore, develop and operate oil and gas
properties. The Company served as the general partner of Ancon, and
the New York Life entities were the only limited partners. The
Company expects to dissolve the partnership as soon as practicable
after the completion of the acquisition.
As of December 31, 1996, New York Life was the beneficial owner of
approximately 4.5% of the Company's outstanding common stock. Also, a
subsidiary of the Company and a separate subsidiary of New York Life
serve as managing general partners of a series of publicly-registered
limited partnerships that are currently in the process of liquidation.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
Financial statements are not available at this time and will be
filed within 60 days of the date of filing this report.
(b) Pro Forma Financial Information
Pro forma financial information is not available at this time and
will be filed within 60 days of the date of filing this report.
(c) Exhibits
10(a) Purchase and Sale Agreement, dated December 16, 1996,
by and among American Exploration Company, NYLIFE
Resources Inc., New York Life Insurance Company and
New York Life Insurance and Annuity Corporation.
99(a) American Exploration Company News Release, dated
December 30, 1996.
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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.
AMERICAN EXPLORATION COMPANY
Date: January 3, 1997 By: /s/ CINDY L. GEROW
------------------------------------
Cindy L. Gerow
Vice President and Controller
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EXHIBIT INDEX
Exhibit No. Description
----------- -----------
10(a) Purchase and Sale Agreement, dated December 16, 1996,
by and among American Exploration Company, NYLIFE
Resources Inc., New York Life Insurance Company and
New York Life Insurance and Annuity Corporation.
99(a) American Exploration Company News Release, dated
December 30, 1996.
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PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT, dated as of December 16, 1996 (the
"Agreement"), by and among American Exploration Company, a Delaware corporation
(the "Purchaser"), NYLIFE Resources Inc., a Delaware corporation ("Resources"),
New York Life Insurance Company, a New York mutual insurance company ("NYLife")
and New York Life Insurance and Annuity Corporation, a Delaware corporation
("NYLIAC," and together with Resources and NYLife collectively, the "Sellers").
In consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Purchase and Sale
Agreement, and unless the context requires a different meaning, the following
terms have the meanings indicated:
"Agreement" means this Purchase and Sale Agreement, as the same
may be amended, supplemented or modified in accordance with the terms hereof
and in effect.
"Assignments" means the three Assignment and Assumption
Agreements made between the Purchaser, as assignee and each of the Sellers, as
assignor, in the forms attached hereto as Exhibit A.
"Closing" has the meaning provided therefor in Section 2.1 of
this Agreement.
"Limited Partnership Interests" means all of the limited
partnership units of the Partnership.
"LP Sharing Ratio" of each Seller is as follows:
<TABLE>
<CAPTION>
Seller %
------ -
<S> <C>
Resources 14.051633%
NYLife 75.434150%
NYLIAC 10.514217%
</TABLE>
"Partnership" means Ancon Partnership Ltd., a Texas limited
partnership, established pursuant to the Amended and Restated Agreement of
Limited Partnership, dated as of April 1, 1995 (the "Partnership Agreement"),
among the Purchaser and the Sellers.
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"Time of Purchase" has the meaning provided therefor in
Section 2.1(b) of this Agreement.
ARTICLE II
PURCHASE OF LIMITED PARTNERSHIP INTERESTS
Section 2.1 Purchase of the Limited Partnership
Interests; the Closing.
(a) Subject to the terms and conditions herein
set forth, the Sellers agree to sell to Purchaser, and Purchaser agrees to
purchase from the Sellers, at the Time of Purchase, the Limited Partnership
Interests at a total purchase price equal to $12,900,000.00.
(b) The purchase and sale of the Limited
Partnership Interests will take place at a closing (the "Closing") to be held
at the offices of the Sellers at 12:00 noon, local time, on December 20, 1996
or on such other date not later than December 31, 1996, and at such time as the
Sellers may specify by notice to Purchaser at least two Business Days prior
thereto. The date and time at which the Closing is to be concluded is the
"Time of Purchase."
(c) Delivery of the Limited Partnership
Interests to be purchased by Purchaser pursuant to this Agreement shall be made
at the Closing by delivery to Purchaser, against payment of the purchase price
therefor as provided herein, of the fully executed Assignments; provided
Purchaser may prior to the Closing designate a wholly owned subsidiary to take
the assignment under the Assignments.
(d) Payment of the agreed purchase price for
the Limited Partnership Interests will be made to each Seller in accordance
with its respective LP Sharing Ratio by Purchaser wire transferring immediately
available funds to such account(s) as will be designated by Sellers to the
Purchaser prior to the Time of Purchase.
Section 2.2 Effective Date. The purchase and sale of
the Limited Partnership Interests shall be effective as of September 30, 1996
(the "Effective Date"); provided, however, distributions from the Partnership
with respect to September, October and November, 1996 shall be retained by the
Sellers.
Section 2.3 Contingent Additional Purchase Price. The
parties acknowledge that, in determining the purchase price to be paid for the
Limited Partnership Interests pursuant to this Agreement, the oil and gas
interests held by the Partnership in the Bowdoin Field and attributable to the
Limited Partnership Interests, 22.07% of the Bowdoin Field interests held or
deemed controlled by Purchaser (the "Bowdoin Properties"), were initially
valued at $4,500,000 but were reduced by $2,000,000 to reflect the exposure to
liability attributed to such interests in connection with the lawsuit styled KN
Gas Supply Services, Inc. v. American Production Partnership, Ltd. and Ninian
Oil Finance Corp. (Civil Action No.95-B-291). In the event
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Purchaser settles such lawsuit and in connection with such settlement receives
consideration, Purchaser agrees to pay the Sellers, in accordance with their
respective LP Sharing Ratios, an amount equal to the excess of the value of the
Bowdoin Properties, valued in a manner consistent with the valuation referred
to in the preceding sentence, but giving effect to such settlement, over
$2,500,000 up to an aggregate additional payment of $2,000,000. The foregoing
contingent obligation shall constitute only an independent contract right
enforceable against the Purchaser and it shall in no manner effect the validity
or effectiveness of the transfer of the Limited Partnership Interests pursuant
to the Assignments. If subsequent to the Closing no such settlement is reached
in the aforesaid lawsuit by the second anniversary of Closing, this Section
shall have no further force or effect.
Section 2.4 Failure to Deliver. If at the Closing any
of the conditions to the Closing specified in this Agreement shall not have
been fulfilled to Purchaser's reasonable satisfaction or waived or if the
Closing fails to occur on or before December 31, 1996, Purchaser shall, at its
election and notwithstanding anything to the contrary in this Agreement, be
relieved of all further obligations under this Agreement
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the
Sellers. Each of the Sellers represents and warrants, as of the date hereof
and as of the Time of Purchase, as follows:
(a) Organization and Good Standing. Each of
the Sellers is a corporation duly organized, validly existing and in good
standing under the laws of the State of its incorporation or organization.
(b) Corporate Authorizations. Each of the
Sellers has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement. The execution and delivery by
each of the Sellers of this Agreement, and the consummation of the transactions
contemplated hereby, have been duly and validly authorized by the respective
Boards of Directors of each of the Sellers and no other corporate proceedings
on the part of the Sellers is necessary for the execution and delivery of this
Agreement, the performance of their obligations hereunder and the consummation
of the transactions contemplated hereby and thereby.
(c) Due Execution, etc. This Agreement
constitutes a legal, valid and binding obligation of each of the Sellers,
enforceable against each of the Sellers in accordance with its terms, except
(i) as such enforcement is subject to the effect of (A) any applicable
bankruptcy, insolvency, reorganization or other law relating to or affecting
creditors' rights generally and (B) general principles of equity (regardless of
whether such enforceability is
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considered in a proceeding in equity or at law) and (ii) that rights to
indemnity and contribution may be limited by Federal or state securities laws.
(d) Status of Limited Partnership Interests.
The Limited Partnership Interests are not be subject to any claim, lien or
encumbrance of any third party.
(e) Governmental Consents, etc. No
authorization, consent, approval, waiver, license, qualification or formal
exemption from, nor any filing, declaration, qualification or registration
with, any court, governmental agency or regulatory authority or any securities
exchange is required in connection with the execution, delivery or performance
by the Sellers of this Agreement.
(f) Certain Fees. No fees or commissions will
be payable by the Sellers to any broker, finder or investment banker with
respect to the sale of any of the Limited Partnership Interests pursuant to the
terms of this Agreement.
(g) Information; Experienced Seller Each
Seller has received all financial and operating information relating to the
Partnership, including all reports required under Section 8.2 of the
Partnership Agreement and has had the opportunity to request and has received
all information regarding the Partnership it desires and is experienced in the
purchase and sale of investments such as the Limited Partnership Interests.
Section 3.2 Representations and Warranties of the
Purchaser.
(a) Authority. Purchaser represents and
warrants to the Sellers that (i) the purchase of the Limited Partnership
Interests by it has been duly and properly authorized and this Agreement, has
been duly executed and delivered by it or on its behalf and constitutes the
valid and legally binding obligation of Purchaser, enforceable against the
Purchaser in accordance with its terms, except as such enforcement is subject
to the effect of (A) any applicable bankruptcy, insolvency, reorganization or
other law relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law); (ii) the purchase of the Limited
Partnership Interests does not conflict with or violate its charter, bylaws or
similar constituent instrument or any law, regulation or court order applicable
to it or any instrument, agreement or document having application to it or its
properties.
(b) Information; Experienced Purchaser.
Purchaser has all financial and operating information relating to the
Partnership, including all reports required under Section 8.2 of the
Partnership Agreement and received all information regarding the Partnership it
desires and is experienced in the purchase and sale of investments such as the
Limited Partnership Interests.
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ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1 Conditions Precedent to Obligations of the
Purchaser. The obligation of Purchaser to purchase the Limited Partnership
Interests is subject, at the Time of Purchase, to the prior or simultaneous
satisfaction or waiver of the following conditions:
(a) The representations and warranties made by
the Sellers herein shall be true and correct (except for changes permitted or
contemplated by this Agreement) on and as of the Time of Purchase with the same
effect as though such representations and warranties had been made on and as of
the Time of Purchase and the Sellers shall have complied in all material
respects with all agreements hereunder required to be performed by it at or
prior to the Time of Purchase.
(b) The purchase of and payment for the Limited
Partnership Interests (i) shall not be prohibited or enjoined (temporarily or
permanently) by any applicable law or governmental regulation and (ii) shall
not be the subject of a suit, action or other proceeding which, on the Closing
Date, shall be pending or threatened by or before any court or other
governmental authority seeking to restrain, prohibit, enjoin or obtain damages
or other relief in connection with this Agreement or the transactions
contemplated hereby.
(c) The Time of Purchase shall not be later
than 5:00 p.m., New York Time, on December 31, 1996, subject to extension in
accordance with Section 2.1(b) hereof.
(d) Each of the Sellers shall deliver a fully
executed Assignment in accordance with Section 2.1(c).
(e) Each of the Sellers shall execute and
deliver a cross receipt.
Section 4.2 Conditions Precedent to Obligations of the
Sellers. The obligation of the Sellers to issue and sell the Limited
Partnership Interests is subject, at the Time of Purchase, to the prior or
simultaneous satisfaction or waiver of the following conditions:
(a) The representations and warranties made by
Purchaser herein shall be true and correct (except for changes expressly
provided for in this Agreement) on and as of the Time of Purchase with the same
effect as though such representations and warranties had been made on and as of
the Time of Purchase.
(b) As to the Sellers, the sale of the Limited
Partnership Interests hereunder shall not be prohibited or enjoined
(temporarily or permanently) by any applicable law or governmental regulation.
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(c) The Purchaser shall have made payment for
the Limited Partnership Interests at the Time of Purchase pursuant to this
Agreement.
(d) The Purchaser shall execute and deliver a
cross receipt.
ARTICLE V
SURVIVAL
Section 5.1 Survival. The representations and
warranties of the parties hereto contained in this Agreement or in any
certificate delivered pursuant hereto shall survive the Closing, regardless of
any investigation made by or on behalf of any party, until the second
anniversary of the Closing Date (such anniversary, the "Survival Date"). From
and after the Survival Date, no party hereto shall be under any liability
whatsoever pursuant to this Article V with respect to any such representation
or warranty.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Termination. This Agreement may be
terminated (as between the party electing so to terminate it and the
counterparty to which termination is directed) by giving written notice of
termination to the applicable counterparty at any time prior to the Time of
Purchase:
(a) By the Sellers if any of the conditions
specified in Section 4.2 of this Agreement has not been met or waived by it
pursuant to the terms of this Agreement by 3:00 p.m., New York City time on
December 31, 1996; or
(b) By Purchaser if any of the conditions
specified in Section 4.1 of this Agreement has not been met or waived by
Purchaser pursuant to the terms of this Agreement by 3:00 p.m., New York City
time on December 31, 1996.
Section 6.2 No Waiver; Modifications in Writing. No
waiver of or consent to any departure by the Sellers or Purchaser from any
provision of this Agreement shall be effective unless signed in writing by the
party entitled to the benefit thereof; provided that notice of any such waiver
shall be given to each party hereto as set forth below.
Section 6.3 Communications. All notices and demands
provided for hereunder shall be in writing, and shall be given by telecopy,
courier service or personal delivery, and, if to a Seller, addressed to such
Seller as shown on the execution pages hereof or to such other address as the
Seller may designate to the Purchaser in writing and, if to the Purchaser shall
be given at: 1331 Lamar, Suite 900, Houston, Texas 77010, Attention: John M.
Hogan, Senior Vice President, with a copy to John E. Schmeltzer, III of
Patterson, Belknap, Webb & Tyler LLP,
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1133 Avenue of the Americas, New York, New York 10036 or to such other address
as the Purchaser may designate in writing, and shall be deemed given when
received.
Section 6.4 Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by different parties hereto
on separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 6.5 Binding Effect; Assignment. This Agreement
shall be binding upon the Purchaser and each Seller, and their respective
successors and assigns. This Agreement shall not be assigned by any party
without the prior written consent of all other parties.
Section 6.6 Governing Law. This agreement shall be
deemed to be a contract made under the laws of the state of New York, and for
all purposes shall be construed in accordance with the laws of said state
without regard to principles of conflict of laws.
Section 6.7 Severability of Provisions. Any provision
of this Agreement that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
Section 6.8 Headings. The Article and Section headings
used or contained in this Agreement are for convenience of reference only and
shall not affect the construction of this Agreement.
Section 6.9 Integration. This Agreement constitutes
the entire agreement among the parties with respect to the purchase and sale of
the Limited Partnership Interests.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
AMERICAN EXPLORATION COMPANY
By: /s/ JOHN M. HOGAN
----------------------------------
Name: John M. Hogan
Title: Senior Vice President and
Chief Financial Officer
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NYLIFE RESOURCES INC.
By: /s/ WILLIAM Y. CHENG
--------------------------
Name: William Y. Cheng
Title: Senior Vice President
Address: 51 Madison Avenue
New York, New York 10010
NEW YORK LIFE INSURANCE COMPANY
By: /s/ WILLIAM Y. CHENG
--------------------------
Name: William Y. Cheng
Title: Vice President
Address: 51 Madison Avenue
New York, New York 10010
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
By: /s/ WILLIAM Y. CHENG
--------------------------
Name: William Y. Cheng
Title: Vice President
Address: 51 Madison Avenue
New York, New York 10010
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A-1
Exhibit A
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement")
made as of December 18, 1996, by and between NYLIFE Resources Inc., a Delaware
corporation (the "Assignor") and Austral Oil Company, Incorporated, a Delaware
corporation (the "Company");
W I T N E S S E T H:
THAT WHEREAS, the Assignor is a Limited Partner of Ancon
Partnership Ltd., a Texas limited partnership (the "Partnership"), established
pursuant to the Amended and Restated Agreement of Limited Partnership, dated as
of April 1, 1995 (the "Partnership Agreement"), among the Company, the
Assignor, New York Life Insurance Company and New York Life Insurance and
Annuity Corporation;
WHEREAS, the Assignor wishes to assign to the Company all of
its interests in the Partnership (the "Limited Partner Interest");
NOW, THEREFORE, in consideration of ten dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. The Assignor hereby assigns, transfers and sets over
the Limited Partner Interest to the Company, which Limited Partner Interest
entitles the holder thereof to not less than 14.051633% interest in the
profits, losses and property attributable to the Limited Partners of the
Partnership, free and clear of all liens, encumbrances and claims. This
assignment includes, without limitation, to the extent of the Limited Partner
Interest conveyed hereunder, the Assignor's right to receive allocations of
income, gain, loss, deduction, credit and similar items and distributions, by
reason of the Assignor's interest in the Partnership, as well as all of
Assignor's rights as a Limited Partner, with the intent that, subject to the
consent of the General Partner of the Partnership, on the effective date hereof
Company shall become a substitute Limited Partner in the Partnership.
2. The Company hereby: (a) accepts the foregoing
assignment and assumes and agrees to perform and discharge in full when due all
of the obligations and commitments of the Assignor related thereto pursuant to
the terms of the Partnership Agreement and to be bound by all of the provisions
of the Partnership Agreement and (b) agrees to indemnify and hold harmless the
Assignor and its successors and assigns, against any and all costs, expenses,
losses or damages (including without limitation reasonable attorneys fees and
expenses) arising on or after the effective date hereof by reason of Company's
ownership of the interest assigned hereby.
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3. The assignment and assumption made hereunder is
effective as of September 30, 1996.
4. The parties mutually covenant and agree to cooperate
with each other and promptly to take such other action and to execute and
deliver such other and further documents as may be reasonable and necessary to
give effect to this Agreement.
5. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
7. This Assignment and Assumption Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunder duly authorized as of the date first above written.
ASSIGNOR:
NYLIFE RESOURCES INC.
By: /s/ WILLIAM Y. CHENG
-----------------------------------
Name: William Y. Cheng
Title: Senior Vice President
COMPANY:
AUSTRAL OIL COMPANY, INCORPORATED
By: /s/ JOHN M. HOGAN
-----------------------------------
Name: John M. Hogan
Title: Senior Vice President and
Chief Financial Officer
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A-2
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement")
made as of December 18, 1996, by and between New York Life Insurance and
Annuity Corporation, a Delaware corporation (the "Assignor") and
Austral Oil Company, Incorporated, a Delaware corporation (the "Company");
W I T N E S S E T H:
THAT WHEREAS, the Assignor is a Limited Partner of Ancon
Partnership Ltd., a Texas limited partnership (the "Partnership"), established
pursuant to the Amended and Restated Agreement of Limited Partnership, dated as
of April 1, 1995 (the "Partnership Agreement"), among the Company, the
Assignor, NYLIFE Resources Inc. and New York Life Insurance Company;
WHEREAS, the Assignor wishes to assign to the Company all of
its interests in the Partnership (the "Limited Partner Interest");
NOW, THEREFORE, in consideration of ten dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. The Assignor hereby assigns, transfers and sets over
the Limited Partner Interest to the Company, which Limited Partner Interest
entitles the holder thereof to not less than 10.514217% interest in the
profits, losses and property attributable to the Limited Partners of the
Partnership, free and clear of all liens, encumbrances and claims. This
assignment includes, without limitation, to the extent of the Limited Partner
Interest conveyed hereunder, the Assignor's right to receive allocations of
income, gain, loss, deduction, credit and similar items and distributions, by
reason of the Assignor's interest in the Partnership, as well as all of
Assignor's rights as a Limited Partner, with the intent that, subject to the
consent of the General Partner of the Partnership, on the effective date hereof
Company shall become a substitute Limited Partner in the Partnership.
2. The Company hereby: (a) accepts the foregoing
assignment and assumes and agrees to perform and discharge in full when due all
of the obligations and commitments of the Assignor related thereto pursuant to
the terms of the Partnership Agreement and to be bound by all of the provisions
of the Partnership Agreement and (b) agrees to indemnify and hold harmless the
Assignor and its successors and assigns, against any and all costs, expenses,
losses or damages (including without limitation reasonable attorneys fees and
expenses) arising on or after the effective date hereof by reason of Company's
ownership of the interest assigned hereby.
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3. The assignment and assumption made hereunder is
effective as of September 30, 1996.
4. The parties mutually covenant and agree to cooperate
with each other and promptly to take such other action and to execute and
deliver such other and further documents as may be reasonable and necessary to
give effect to this Agreement.
5. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
7. This Assignment and Assumption Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunder duly authorized as of the date first above written.
ASSIGNOR:
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION
By: /s/ WILLIAM Y. CHENG
--------------------------------
Name: William Y. Cheng
Title: Vice President
COMPANY:
AUSTRAL OIL COMPANY, INCORPORATED
By: /s/ JOHN M. HOGAN
--------------------------------
Name: John M. Hogan
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 13
A-3
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement")
made as of December 18, 1996, by and between New York Life Insurance Company,
a New York mutual insurance company (the "Assignor") and Austral Oil Company,
Incorporated, a Delaware corporation (the "Company");
W I T N E S S E T H:
THAT WHEREAS, the Assignor is a Limited Partner of Ancon
Partnership Ltd., a Texas limited partnership (the "Partnership"), established
pursuant to the Amended and Restated Agreement of Limited Partnership, dated as
of April 1, 1995 (the "Partnership Agreement"), among the Company, the
Assignor, NYLIFE Resources Inc. and New York Life Insurance and Annuity
Corporation;
WHEREAS, the Assignor wishes to assign to the Company all of
its interests in the Partnership (the "Limited Partner Interest");
NOW, THEREFORE, in consideration of ten dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. The Assignor hereby assigns, transfers and sets over
the Limited Partner Interest to the Company, which Limited Partner Interest
entitles the holder thereof to not less than 75.434150% interest in the
profits, losses and property attributable to the Limited Partners of the
Partnership, free and clear of all liens, encumbrances and claims. This
assignment includes, without limitation, to the extent of the Limited Partner
Interest conveyed hereunder, the Assignor's right to receive allocations of
income, gain, loss, deduction, credit and similar items and distributions, by
reason of the Assignor's interest in the Partnership, as well as all of
Assignor's rights as a Limited Partner, with the intent that, subject to the
consent of the General Partner of the Partnership, on the effective date hereof
Company shall become a substitute Limited Partner in the Partnership.
2. The Company hereby: (a) accepts the foregoing
assignment and assumes and agrees to perform and discharge in full when due all
of the obligations and commitments of the Assignor related thereto pursuant to
the terms of the Partnership Agreement and to be bound by all of the provisions
of the Partnership Agreement and (b) agrees to indemnify and hold harmless the
Assignor and its successors and assigns, against any and all costs, expenses,
losses or damages (including without limitation reasonable attorneys fees and
expenses) arising on or after the effective date hereof by reason of Company's
ownership of the interest assigned hereby.
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3. The assignment and assumption made hereunder is
effective as of September 30, 1996.
4. The parties mutually covenant and agree to cooperate
with each other and promptly to take such other action and to execute and
deliver such other and further documents as may be reasonable and necessary to
give effect to this Agreement.
5. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
7. This Assignment and Assumption Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunder duly authorized as of the date first above written.
ASSIGNOR:
NEW YORK LIFE INSURANCE
COMPANY
By: /s/ WILLIAM Y. CHENG
-----------------------------------
Name: William Y. Cheng
Title: Vice President
COMPANY:
AUSTRAL OIL COMPANY, INCORPORATED
By: /s/ JOHN M. HOGAN
-----------------------------------
Name: John M. Hogan
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
AMERICAN EXPLORATION COMPANY
NEWS RELEASE
December 30, 1996
AMERICAN EXPLORATION COMPANY ACQUIRES
LIMITED PARTNERSHIP INTERESTS FOR $9 MILLION
HOUSTON, TX - American Exploration Company (ASE: AX) today announced
that it has purchased the limited partnership interests held by affiliates of
New York Life Insurance Company in Ancon Partnership, Ltd., ("Ancon") a limited
partnership of which American Exploration serves as general partner. The cash
purchase price, net of acquired working capital, was approximately $9.0
million. Estimated proved reserves attributable to the acquired interest total
2.3 million BOE as of September 30, 1996, the effective date of the
transaction.
Commenting, Mark Andrews, Chairman and CEO, said, "We are now in the
final stage of winding down our partnership activities, having recently
completed the sale of oil and gas properties held by the New York Life Oil and
Gas Production Partnerships ("NYLOG"). The Ancon acquisition will largely
offset the impact of the NYLOG sales on our net reserves and production and
increases our net ownership position in several major properties.
"With our partnership properties now either sold or consolidated into
American Exploration, we are focused on exploration and development projects in
the Gulf of Mexico, the Wilcox trend in south Texas, and the Cotton Valley Reef
trend in east Texas. For 1997, we have budgeted approximately $76 million for
land, seismic and drilling activity and expect to participate in approximately
130 gross wells."
American Exploration Company is an independent oil and gas company
with exploration and development activities concentrated primarily in the Gulf
of Mexico, Texas and Arkansas. American's common and preferred shares are
listed on the American Stock Exchange under the symbols AX and AX.PR.C.
###
Contact: Frank Murphy
Vice President-Corporate Finance
(713) 756-6269
This press release includes certain statements that may be deemed to
be "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. All statements, other than statements of historical
facts, included in this press release that address activities, events or
developments that the Company expects, believes or anticipates will or may
occur in the future, including drilling of wells, reserve estimates, future
production of oil and gas, future cash flows and other such matters are
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Company in light of its experience and its perception
of historical trends, current conditions, expected future developments and
other factors it believes are appropriate in the circumstances. Such statements
are subject to a number of assumptions, risks and uncertainties, many of which
are beyond the control of the Company. Investors are cautioned that any such
statements are not guarantees of future performance and that actual results or
developments may differ materially from those projected in the forward-looking
statements.
