<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 10, 1995
AMENDMENT NO. 1
BELDEN & BLAKE CORPORATION
--------------------------
(Exact name of registrant as specified in charter)
Ohio 0-20100 34-1686642
- --------------- ---------------- --------------------
(State or other (Commission File (IRS Employer Identi-
jurisdiction of Number) fication No.)
incorporation)
5200 Stoneham Road, North Canton, Ohio 44720
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 499-1660
-------------
________________________________________________________________________________
(Former name or former address, if changed since last report)
<PAGE> 2
Item 7. Financial Statements
--------------------
(a) Financial Statements of Business Acquired
See Index to Financial Statements
(b) Pro Forma Financial Information
See Index to Financial Statements
Signatures
- ----------
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.
Date: April 26, 1995 BELDEN & BLAKE CORPORATION
(Registrant)
By: /s/ Ronald E. Huff
-------------------------
Ronald E. Huff,
Senior Vice President and
Chief Financial Officer
<PAGE> 3
<TABLE>
BELDEN & BLAKE CORPORATION
INDEX TO FINANCIAL STATEMENTS
CONTENTS
<CAPTION>
Page
----
<S> <C>
HISTORICAL FINANCIAL STATEMENTS OF WARD LAKE DRILLING, INC.
Report of Independent Auditors F-1
Balance Sheet F-2
Statement of Revenues and Expenses and Retained Earnings F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
Unaudited Pro Forma Consolidated Balance Sheet F-14
Unaudited Pro Forma Consolidated Statement of Operations F-16
Notes to Unaudited Pro Forma Financial Statements F-17
</TABLE>
<PAGE> 4
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Ward Lake Drilling, Inc.
We have audited the accompanying balance sheet of Ward Lake Drilling, Inc. as
of December 31, 1994, and the related statements of revenues and expenses
and retained earnings and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements 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 financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ward Lake Drilling, Inc. at
December 31, 1994, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
February 24, 1995
F-1
<PAGE> 5
<TABLE>
WARD LAKE DRILLING, INC.
BALANCE SHEET
December 31, 1994
ASSETS
<S> <C>
Current assets:
Cash and cash equivalents $ 2,667,287
Marketable securities 1,926,317
Accounts receivable (less allowance for
doubtful accounts of $27,000) 2,513,352
Accounts receivable--related parties 2,182,000
Inventories 102,790
Other current assets 71,489
------------
Total current assets 9,463,235
Property and equipment:
Oil and gas properties (operated) 1,663,292
Oil and gas properties (non-operated) 5,308,065
Land, buildings, machinery and equipment 1,083,738
------------
8,055,095
Less accumulated depreciation, depletion
and amortization 1,344,464
------------
6,710,631
Other long-term assets 351,297
------------
Total assets $ 16,525,163
============
</TABLE>
F-2
<PAGE> 6
<TABLE>
<S> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,003,329
Accounts payable--related parties 598,813
Accrued and other expenses 2,832,395
Notes payable and other short-term debt 3,176,783
Notes payable--related parties 280,000
Current portion of long-term liabilities 1,035,000
------------
Total current liabilities 11,926,320
Notes payable and other long-term debt 968,447
Shareholders' equity:
Common stock, $1 par value;
50,000 shares authorized, issued
and outstanding 50,000
Retained earnings 3,580,396
------------
Total shareholders' equity 3,630,396
------------
Total liabilities and shareholders' equity $ 16,525,163
============
</TABLE>
See accompanying notes.
F-3
<PAGE> 7
<TABLE>
WARD LAKE DRILLING, INC.
STATEMENT OF REVENUES AND EXPENSES AND RETAINED EARNINGS
Year ended December 31, 1994
<S> <C>
Revenues:
Oil and gas activities:
Production revenue $3,540,171
Well operating revenue 3,049,694
Interest and other 743,878
----------
7,333,743
Expenses:
Production and well operating expense 3,361,007
Exploration expense 28,313
General and administrative expense 1,835,369
Interest expense 419,737
Depreciation, depletion and amortization 756,232
----------
6,400,658
----------
Net income 933,085
Retained earnings at beginning of year 3,539,109
Distributions to shareholders (891,798)
----------
Retained earnings at end of year $3,580,396
==========
</TABLE>
See accompanying notes.
F-4
<PAGE> 8
<TABLE>
WARD LAKE DRILLING, INC.
STATEMENT OF CASH FLOWS
Year ended December 31, 1994
<S> <C>
OPERATING ACTIVITIES
Net income $ 933,085
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 756,232
Loss on disposal of oil and gas property and
property and equipment 67,713
Changes in operating assets and liabilities, net of
effects of purchases of businesses:
Accounts receivable 1,164,376
Prepaids and other current assets (122,681)
Inventories 82,158
Accounts payable and accrued expenses (3,384,654)
----------
Net cash used in operating activities (503,771)
INVESTING ACTIVITIES
Proceeds from sale of oil and gas properties and other
property and equipment 125,813
Additions to oil and gas properties (1,097,056)
----------
Net cash used in investing activities (971,243)
FINANCING ACTIVITIES
Proceeds from long-term debt 6,838,328
Repayment of long-term debt (4,625,177)
Distributions to shareholders (782,087)
----------
Net cash provided by financing activities 1,431,064
----------
Decrease in cash and cash equivalents (43,950)
Cash and cash equivalents at beginning of year 2,711,237
----------
Cash and cash equivalents at end of year $2,667,287
==========
</TABLE>
See accompanying notes.
F-5
<PAGE> 9
WARD LAKE DRILLING, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1994
1. ORGANIZATION AND NATURE OF BUSINESS
Ward Lake Drilling, Inc. (the "Company"), a Michigan subchapter S Corporation,
is a domestic, independent oil and gas exploration and production company.
2. ACCOUNTING POLICIES
CASH EQUIVALENTS AND MARKETABLE SECURITIES
For purposes of the statement of cash flows, cash equivalents are defined as
all highly liquid debt instruments purchased with an initial maturity of three
months or less.
Marketable securities, principally U.S. Government securities, are treated as
available for sale securities and are stated at cost which approximates fair
value.
INVENTORIES
Inventories consist primarily of oil field casing and tubular goods utilized
in the Company's exploration activities and are valued at the lower of cost
(first-in, first-out method) or market.
PROPERTY AND EQUIPMENT
The Company follows the successful efforts method of accounting for its oil and
gas producing activities.
Acquisition costs for proved and unproved properties are capitalized
when incurred. Costs of unproved properties are transferred to proved
properties when proved reserves are discovered. Exploration costs, including
geological and geophysical costs and costs of carrying and retaining unproved
properties, are charged against income as incurred. Exploratory drilling costs
are capitalized initially; however, if it is determined that an exploratory
well does not contain sufficient proved reserves, such capitalized costs are
charged to expense, as dry hole costs, at that time. Development costs are
capitalized. Costs incurred to operate and maintain wells and equipment and to
lift oil and gas to the surface are generally expensed.
The net costs of proved oil and gas properties are annually subjected to a test
of recoverability on a property by property basis by comparison to their
estimated present value of future net cash flows from proved reserves.
Unproved oil and gas properties are also subjected to an impairment test. Any
capitalized costs in excess of future net cash flows are expensed in the year
in which such an excess occurs.
F-6
<PAGE> 10
WARD LAKE DRILLING, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
2. ACCOUNTING POLICIES (CONTINUED)
Depreciation, depletion and amortization of oil and gas properties are computed
on a units-of-production method based on proven reserves. The provision for
depreciation, depletion and amortization is calculated by applying the ratio of
current production divided by beginning reserves to net capitalized property
costs.
Other property and equipment are recorded at cost, and depreciation is
calculated using the straight-line and declining balance methods over the
respective estimated useful lives of the assets.
INCOME TAXES
The Company has elected to be taxed as a subchapter S Corporation. As a result,
earnings are not subject to the federal or state corporation income taxes but
are S-Corp earnings allocated to the shareholders of the Company for
inclusion on their personal income tax returns.
3. PROPERTY AND EQUIPMENT
<TABLE>
Property and equipment consist of the following at December 31:
<S> <C>
Land, buildings and improvements $ 402,043
Machinery and equipment 681,695
----------
1,083,738
Less accumulated depreciation 444,105
----------
$ 639,633
==========
</TABLE>
4. OIL AND GAS PROPERTIES
<TABLE>
Oil and gas properties consist of the following at December 31:
<S> <C>
Non operated properties $5,308,065
Operated properties 1,663,292
----------
6,971,357
Less accumulated depletion 900,359
----------
$6,070,998
==========
</TABLE>
F-7
<PAGE> 11
WARD LAKE DRILLING, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. CERTIFICATES OF DEPOSIT
The United States Environmental Protection Agency (EPA) requires that an owner
or operator of a disposal well will provide assurance that funds will be
available when needed for plugging and abandonment of the disposal well. The
Company had entered into a trust agreement with the EPA, providing that the
Company establish a trust fund for the benefit of the EPA. This fund is
comprised of certificates of deposit totaling approximately $332,000 which are
held for the life of each disposal well. Funds are disbursed under direction
of the EPA for the costs of plugging and abandonment of the disposal well.
These amounts are included in other long-term assets.
6. PLUGGING AND ABANDONMENT FUNDS
The Company retains a portion of its own and outside investors' monthly gas
and oil production proceeds to be utilized for future well plugging and
abandonment costs. The funds totaling $1,926,317 at December 31, 1994, are
invested in securities issued or guaranteed by the United States Treasury
and maintained in accounts segregated from those of the Company. Interest
earned on the funds accrue to the benefit of the working interest owners.
7. LONG-TERM DEBT AND NOTES PAYABLE
<TABLE>
<CAPTION>
Long-term debt and notes payable consist of the following as of
December 31, 1994:
<S> <C>
Notes payable to bank, monthly payments of $83,333 plus
interest at 7.375%, concluding September 30, 1996,
collateralized by all assets of the Company $1,833,333
Notes payable to banks, monthly payments totaling $2,192,
including interest rates ranging from prime plus 1% to
10.25%, concluding with balloon payments of approximately
$104,150 in November 1996, collateralized by real estate
mortgages 130,819
Notes payable to bank, monthly payments of $1,405,
including interest rates up to 7.4%, concluding at various
dates through April 1997, collateralized by specific
equipment and vehicles 39,295
---------
2,003,447
Less current portion of long-term debt 1,035,000
---------
Total long-term debt $ 968,447
=========
</TABLE>
F-8
<PAGE> 12
WARD LAKE DRILLING, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. LONG-TERM DEBT AND NOTES PAYABLE (CONTINUED)
At December 31, 1994, the aggregate long-term debt maturing in the next three
years is as follows: 1995--$1,035,000; 1996--$962,793 and 1997--$5,654.
At December 31, 1994, the Company has a revolving credit line with a
maximum amount available of $3,000,000 and interest payable monthly at 10%.
The Company also has a line-of-credit with a maximum amount available of
$1,000,000 and interest payable monthly at prime rate, as adjusted (10.5%
at December 31, 1994). The amounts outstanding on these loans totaled
$3,176,783 at December 31, 1994.
8. LEASES
The Company has entered into certain noncancellable leasing agreements for gas
compression equipment used on gas wells. These operating leases are generally
for three to five year terms, which are renewable. The Company has also
entered into noncancellable operating lease agreements for its office space
and vehicles.
The following is a schedule by year of the estimated future minimum rental
payments required under operating leases that have initial or remaining
noncancellable lease terms in excess of one year as of December 31, 1994:
<TABLE>
<CAPTION>
COMPANY
TOTAL PORTION
-------------------------------
<S> <C> <C>
1995 $2,005,000 $361,000
1996 1,316,000 237,000
1997 873,000 157,000
1998 544,000 98,000
1999 and thereafter 284,000 51,000
------------- -----------
$5,022,000 $904,000
============= ===========
</TABLE>
The above rental payments attributable to the gas compression leases in the
total column represent the total rental payments due under the leases as of
December 31, 1994. The Company, as operator, has signed these leases and is
contingently liable. The Company bills the working interest investors
participating in each project for their portion of the monthly rental payments.
The Company's total rental expense for all operating leases for the year ended
December 31, 1994 is approximately $478,000.
F-9
<PAGE> 13
WARD LAKE DRILLING, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
9. RETIREMENT PLAN
The Company has a 401(k) profit-sharing plan. Employees are eligible to
participate 90 days after date of hire. The Company will match fifty percent
of the employee's contribution to a maximum of three percent of the employee's
pay. The Company can also make a discretionary contribution to the plan. The
Company's contributions for the 1994 plan year was approximately $31,000.
10. RELATED PARTY TRANSACTIONS
The Company advanced funds to shareholders in the amount of $2,182,000 which
are classified as accounts receivable-related parties. As described in Note 14,
these notes were cancelled subsequent to December 31, 1994 and treated as a
capital transaction.
The shareholders of the Company are also shareholders of Antrim Services, Inc.
(Antrim). Antrim provides construction services related to the construction of
wells, pipelines and facilities. Total fees for these services amounted to
approximately $1,400,000 in 1994. In addition, the Company purchased fixed
assets from Antrim amounting to approximately $500,000. The Company owed
Antrim approximately $600,000 at December 31, 1994. Antrim owed the Company
approximately $11,500 at December 31, 1994. These amounts are appropriately
included in accounts payable and accounts receivable.
The Company has a variable rate (4.8% at December 31, 1994) demand note payable
to a shareholder in the amount of $280,000 at December 31, 1994.
The shareholders of the Company are also shareholders of Ward Corporation (Ward
Corp.). The Company leases gas compressors from Ward Corp. The Company and
Ward Corp. have arranged to offset repair and maintenance services to provided
compressors against rental payments. The total net receivable from Ward Corp.
in 1994 was approximately $12,000.
The Company obtains legal services from one of its shareholders. The total
fees charged by this shareholder for legal services were approximately $60,000
in 1994.
Dividends paid to shareholders during the year ended December 31, 1994 were
$891,798, including a property dividend of $109,711 which related to a
transfer of working interest in oil and gas properties.
11. MAJOR CUSTOMERS
Oil and gas sales to one individual customer that exceeded 10% of total revenue
during the year ended December 31, 1994 amounted to approximately $2,978,000.
F-10
<PAGE> 14
WARD LAKE DRILLING, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
12. CONCENTRATIONS OF CREDIT RISK
The Company operates exclusively in the oil and gas industry. Sales of oil and
gas are ultimately made to refineries, gas utilities and industrial consumers
in Michigan. Credit limits, ongoing credit evaluation and account monitoring
procedures are utilized to minimize the risk of loss. Collateral is generally
not required. Expected losses have been within management's expectations.
13. SUPPLEMENTARY INFORMATION ON OIL AND GAS ACTIVITIES
The following disclosures are presented in accordance with the Financial
Accounting Standards Board's (FASB) Statement of Financial Accounting Standards
No. 69 (SFAS 69). The following table sets forth costs incurred by the Company
during the year ended December 31, 1994:
<TABLE>
<S> <C>
Acquisition:
Proved properties $200,018
Unproved properties 399,636
Exploration 28,313
</TABLE>
PROVED OIL AND GAS RESERVES (UNAUDITED)
The Company's proved developed and undeveloped reserves are all located within
the United States. The Company cautions that there are many uncertainties
inherent in estimating proved reserve quantities and in projecting future
production rates and the timing of development expenditures. In addition,
estimates of new discoveries are more imprecise than those of properties with a
production history. Accordingly, these estimates are expected to change as
future information becomes available. Material revisions to reserve estimates
may occur in the future, development and production of the oil and gas reserves
may not occur in the periods assumed, and actual prices realized and actual
costs incurred many vary significantly from those used. Proved reserves
represent estimated quantities of natural gas, crude oil and condensate that
geological and engineering data demonstrate, with reasonable certainty, to be
recoverable in future years from known reservoirs under economic and operating
conditions existing at the time the estimates were made. Proved developed
reserves are proved reserves expected to be recovered through wells and
equipment in place and under operating methods being utilized at the time the
estimates were made.
F-11
<PAGE> 15
WARD LAKE DRILLING, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
13. SUPPLEMENTARY INFORMATION ON OIL AND GAS ACTIVITIES (CONTINUED)
The estimates of proved developed reserves were prepared by the Company's
petroleum engineers.
<TABLE>
<CAPTION>
GAS
(MCF)
-----------
<S> <C>
Proved developed reserves as of
December 31, 1993 15,613,634
Revisions of previous estimates (195,844)
Production (1,751,747)
-----------
Proved developed reserves as of
December 31, 1994 13,666,043
===========
</TABLE>
No estimate of proved undeveloped reserves has been prepared.
STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS RELATING TO PROVED
RESERVES (UNAUDITED)
The following tables, which present a standardized measure of discounted future
net cash flows and changes therein relating to proved oil and gas reserves, are
presented pursuant to SFAS 69. In computing this data, assumptions other than
those required by the FASB could produce different results. Accordingly, the
data should not be construed as representative of the fair market value of the
Company's proved oil and gas reserves. The following assumptions have been
made at December 31, 1994:
- Future revenues were based on year end oil and gas prices. Future
price changes were included only to the extent provided by
existing contractual agreements.
- Production and development costs were computed using year end
costs assuming no change in present economic conditions.
- Future net cash flows were discounted at an annual rate of 10%.
- Future income taxes were computed using the approximate statutory
tax rate and giving effect to available net operating losses, tax
credits and statutory depletion.
F-12
<PAGE> 16
WARD LAKE DRILLING, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
13. SUPPLEMENTARY INFORMATION ON OIL AND GAS ACTIVITIES (CONTINUED)
<TABLE>
<S> <C>
Estimated future cash inflows (outflows):
Revenues from sale of oil and gas $ 24,793,777
Production and development costs (11,895,483)
-------------
Future net cash flows 12,898,294
10% timing discount (4,157,372)
-------------
Standardized measure of discounted
future net cash flows $ 8,740,922
=============
Beginning of year $ 10,656,155
Sale of oil and gas, net of production costs (1,292,597)
Net changes in prices and production costs (1,688,252)
Accretion of 10% timing discount 1,065,616
-------------
End of year $ 8,740,922
=============
</TABLE>
14. SUBSEQUENT EVENT
Effective January 1995, the Company was purchased by Belden & Blake
Corporation, a publicly-held, vertically integrated exploration and production
company headquartered in North Canton, Ohio, for approximately $15.1 million.
During the settlement of the purchase agreement, approximately $5.3 million of
outstanding notes payable and long-term debt was satisfied. Additionally,
certain net related party receivables in the amount of $2,182,000 were
cancelled in connection with the purchase agreement. The cancellation of these
amounts was treated as a capital transaction subsequent to December 31, 1994.
F-13
<PAGE> 17
<TABLE>
BELDEN & BLAKE CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
December 31, 1994
<CAPTION>
Historical Pro Forma
--------------------------------- --------------------------------
Company Ward Lake Adjustments Combined
-------------- ------------- ------------- ---------------
ASSETS
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents and marketable securities $ 3,649,005 $ 4,593,604 $ $ 8,242,609
Accounts receivable, net 13,068,663 4,695,352 17,764,015
Inventories 6,676,884 102,790 6,779,674
Deferred income taxes 1,741,093 1,741,093
Other current assets 956,699 71,489 1,028,188
------------- ------------- ------------- ---------------
TOTAL CURRENT ASSETS 26,092,344 9,463,235 -- 35,555,579
PROPERTY AND EQUIPMENT
Oil and gas properties (successful efforts method) 122,279,367 6,971,357 4,466,701(a) 133,717,425
Gas gathering systems 18,120,365 18,120,365
Land, buildings, machinery and equipment 19,564,247 1,083,738 (696,738)(b) 19,951,247
------------- ------------- ------------- ---------------
159,963,979 8,055,095 3,769,963 171,789,037
Less accumulated depreciation, depletion
and amortization 40,788,899 1,344,464 (1,344,464)(c) 40,788,899
------------- ------------- ------------- ---------------
PROPERTY AND EQUIPMENT, NET 119,175,080 6,710,631 5,114,427 131,000,138
OTHER ASSETS 2,905,371 351,297 968,181(d) 4,224,849
------------- ------------- ------------- ---------------
$ 148,172,795 $ 16,525,163 $ 6,082,608 $ 170,780,566
============= ============= ============= ===============
</TABLE>
See accompanying notes.
F-14
<PAGE> 18
<TABLE>
BELDEN & BLAKE CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
December 31, 1994
<CAPTION>
Historical Pro Forma
--------------------------------- ---------------------------------
Company Ward Lake Adjustments Combined
-------------- -------------- ------------- ---------------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 3,593,811 $ 4,602,142 $ $ 8,195,953
Accrued expenses 8,440,315 2,832,395 11,272,710
Current portion of long-term liabilities 447,257 4,491,783 4,939,040
-------------- -------------- ------------- ---------------
TOTAL CURRENT LIABILITIES 12,481,383 11,926,320 -- 24,407,703
LONG-TERM LIABILITIES
Senior notes 35,000,000 35,000,000
Convertible subordinated debentures 7,350,000 7,350,000
Bank and other long-term debt 4,239,682 968,447 9,713,004(e) 14,921,133
Capitalized lease obligations 645,314 645,314
Other 623,162 623,162
-------------- -------------- ------------- ---------------
TOTAL LONG-TERM LIABILITIES 47,858,158 968,447 9,713,004 58,539,609
DEFERRED INCOME TAXES 6,691,408 6,691,408
SHAREHOLDERS' EQUITY
Common stock without par value; $.10 stated value
per share; authorized 12,000,000 shares; issued
and outstanding 7,084,737 shares 708,474 50,000 (50,000)(f) 708,474
Preferred stock without par value; $100 stated value
per share; authorized 8,000,000 shares;
issued and outstanding 24,000 shares 2,400,000 2,400,000
Paid in capital 70,378,839 70,378,839
Retained earnings 7,879,483 3,580,396 (3,580,396)(f) 7,879,483
Unearned portion of restricted stock (224,950) (224,950)
-------------- -------------- ------------- ---------------
TOTAL SHAREHOLDERS' EQUITY 81,141,846 3,630,396 (3,630,396) 81,141,846
-------------- -------------- ------------- ---------------
$ 148,172,795 $ 16,525,163 $ 6,082,608 $ 170,780,566
============== ============== ============= ==============
</TABLE>
See accompanying notes.
F-15
<PAGE> 19
<TABLE>
BELDEN & BLAKE CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (NOTE 1)
For the year ended December 31, 1994
<CAPTION>
Historical Pro Forma
-------------------------------- -------------------------------
Company Ward Lake Adjustments Combined
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
REVENUES
Oil and gas sales $ 32,574,114 $ 3,540,171 $ $ 36,114,285
Gas marketing and gathering 33,085,304 33,085,304
Oilfield sales and service 16,885,669 3,049,694 (3,049,694)(g) 16,885,669
Interest and other 558,842 743,878 1,302,720
-------------- ------------- ------------- --------------
83,103,929 7,333,743 (3,049,694) 87,387,978
Expenses
Production expense 9,292,349 3,361,007 (3,049,694)(g) 9,642,554
38,892(h)
Cost of gas and gathering expense 29,133,553 29,133,553
Oilfield sales and service 16,296,539 16,296,539
Exploration expense 2,807,278 28,313 2,835,591
General and administrative expense 3,965,754 1,835,369 (673,088)(i) 5,128,035
Interest expense 3,587,207 419,737 687,223(j) 4,694,167
Depreciation, depletion and amortization 12,021,258 756,232 413,760(k) 13,191,250
-------------- ------------- ------------- --------------
77,103,938 6,400,658 (2,582,907) 80,921,689
-------------- ------------- ------------- --------------
INCOME BEFORE INCOME TAXES 5,999,991 933,085 (466,787) 6,466,289
Provision for income taxes 2,157,070 96,610(l) 2,253,680
-------------- ------------- ------------- --------------
NET INCOME $ 3,842,921 $ 933,085 (563,397) 4,212,609
============== ============= ============= ==============
NET INCOME PER COMMON SHARE $ 0.52 $ .57
============== ==============
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 7,080,227 7,080,227
============== ==============
</TABLE>
See accompanying notes.
F-16
<PAGE> 20
BELDEN & BLAKE CORPORATION
Notes to Unaudited Pro Forma Financial Statements
1. Basis of Presentation
---------------------
The unaudited pro forma financial statements set forth unaudited pro forma
financial information for the Company for the year ended December 31, 1994.
The unaudited pro forma condensed balance sheet assumes that Ward Lake
Drilling, Inc. ("Ward Lake") had been acquired as of December 31, 1994. The
unaudited pro forma results of operations assume that the acquisition of
Ward Lake had occurred on January 1, 1994. Unaudited pro forma results of
operations cannot be considered indicative of future operations.
2. Pro Forma Adjustments
---------------------
(a) Adjustment to reflect the fair market value of the oil and gas
properties at the time of acquisition.
(b) Adjustment to reduce the historical cost of land, buildings,
machinery, and equipment acquired by the Company to reflect the fair
market value at time of acquisition.
(c) Adjustment to eliminate Ward Lake's historical accumulated
depreciation.
(d) Adjustment to recognize the fair market value of other assets at the
time of acquisition.
(e) Adjustment to recognize additional debt incurred by the Company in
connection with the acquisition of Ward Lake.
(f) Adjustment to eliminate Ward Lake's historical common stock and
retained earnings.
(g) Adjustment to present certain well operating revenues (pumper and
administrative fees) as a reduction of production expenses, so as to
conform with the Company's existing presentation policy.
(h) Adjustment to recognize additional production expense associated with
pay increases granted at the time of acquisition.
(i) Adjustment to reflect reduced general and administrative expenses
associated with the closing of one administrative office and the
discontinuing of the employment of Ward Lake's executive group and
support staff.
(j) Adjustment to reflect increased interest expense associated with
additional debt incurred by the Company in connection with the
acquisition of Ward Lake. See adjustment (e).
(k) Adjustment to recognize additional depreciation, depletion and
amortization incurred due to recording the purchase price of the
assets at fair market value rather than at historical cost. See
adjustments (a), (b) and (d).
(l) Adjustment to the combined unaudited pro forma provision for income
taxes. Prior to the acquisition Ward Lake was a subchapter S
Corporation and accordingly did not provide for income taxes.
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