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): April 18, 1997
TEXOIL, INC.
(Exact name of registrant as specified in its charter)
NEVADA 0-12633 88-0177083
(State of incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
1600 SMITH STREET, SUITE 4000
HOUSTON, TEXAS 77002
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(713) 652-5741
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
(NOT APPLICABLE)
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
Item 5. Other Events
(a) Financing Activity
Texoil, Inc. reported on Form 10-KSB for the fiscal year ended December
31, 1996 that it was seeking additional debt capital or equity in connection
with having acquired approximately double the amount of lease acreage and
its plans to explore into deeper horizons than originally planned in both
the Raceland and Greens Lake Prospects. Texoil Company ("Company"), a wholly
owned subsidiary of Texoil, Inc. received a commitment on April 18, 1997 for
up to $1,500,000 in exchangeable debt financing from Resource Investors
Management Company Limited Partnership ("RIMCO") on behalf of RIMCO
Partners, L.P., RIMCO Partners, L.P. II, RIMCO Partners, L.P. III AND RIMCO
Partners, L.P. IV. The financing is in the form of Senior Secured
Exchangeable General Obligation Notes issued by the Company in the maximum
amount of $1,500,000 ("Exchangeable Notes"). The Exchangeable Notes are
intended to fund Raceland and Greens Lake Prospect drilling and completion
costs in excess of funds available from the Company's existing $3,000,000
Senior Exchangeable General Obligation Notes dated September 6, 1996. As of
April 22, 1997 the Company had borrowed $1,642,134 under this $3,000,000
facility.
The Exchangeable Notes commitment provides for a six month availability
period with a maturity date of September 1, 1999. Amounts advanced under the
Exchangeable Notes will accrue interest at a fixed, annual rate of 10%, with
interest payable monthly and all outstanding principal plus all accrued and
unpaid interest due and payable at maturity. Indebtedness outstanding under
the Exchangeable Notes will be exchangeable, in whole or in part, for
Texoil, Inc. common stock at an initial per share price equal to $1.50,
subject to anti-dilution adjustments. The Company will be able to require
the RIMCO lenders to make such an exchange if the average trading price of
the common stock for any consecutive twenty day trading period is $3.00 or
more. The Company will grant the RIMCO lenders certain registration rights
in respect to the shares of Texoil, Inc. common stock issuable upon exchange
of debt under the Exchangeable Notes. Obligations under the Exchangeable
Notes will be secured by all of the existing and future oil and gas assets
of the Company and Texoil, Inc. will guarantee the Company's obligations
thereunder.
(b) Debt Conversion
Two Texoil, Inc. directors have elected to convert $300,000 of debt into
375,000 shares of Texoil, Inc. common stock effective April 22, 1997. The
$300,000 converted amount is a part of the aggregate $900,000 of convertible
debt issued by Texoil, Inc. in the form of Replacement 12% Convertible Notes
dated September 6, 1996 ("Replacement Notes"). All or any part of the
Replacement Notes may be converted at any time into shares of Texoil, Inc.
common stock at a conversion price of $0.80 per share. Mr. T.W. Hoehn, Jr.,
holder of $550,000 in Replacement Notes, converted $260,000 of debt into
325,000 shares of common stock. Mr. T.W. Hoehn, III, holder of $300,000 in
Replacement Notes converted $40,000 of debt into 75,000 shares of common
stock. Giving effect to the $300,000 debt conversion, the Replacement Notes
aggregate balance of $600,000 is now held by Mr. T.W. Hoehn, Jr. in the sum
of $290,000, Mr. T.W. Hoehn, III in the sum of $260,000 and Mr. William F.
Seagle in the sum of $50,000.
Page 2
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Item 7. Financial Statements and Exhibits
(a) Financial statement of business acquired - not applicable
(b) Pro Forma Financial Information (Unaudited)
The following unaudited pro forma condensed consolidated balance sheet
as of December 31, 1996 gives effect to the conversion of $300,000 of debt
into 375,000 shares of Texoil, Inc. common stock. The $300,000 converted
amount is a part of the aggregate $900,000 of convertible debt securities
issued by Texoil, Inc. in the form of Replacement Notes. All or any part of
the Replacement Notes may be converted at any time into shares of Texoil,
Inc. common stock at a conversion price of $0.80 per share.
The pro forma information is based on the historical financial
statements of the Registrant. The pro forma adjustments required are to
reduce the notes payable liabilities by $300,000 and to reflect the
corresponding increase in stockholders' equity resulting from the issuance
of 375,000 shares of Texoil, Inc. common stock.
Page 3
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TEXOIL, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS CONSOLIDATED
----------- ----------- ------------
<S> <C> <C> <C>
ASSETS
Current:
Cash ...................................... $ 1,812 $ 0 $ 1,812
Accounts receivable ....................... 468,359 0 468,359
Other ..................................... 58,457 0 58,457
----------- ----------- -----------
Total current assets ............... 528,808 0 528,808
----------- ----------- -----------
Oil and gas properties, net
(on the basis
of full cost accounting) .................. 4,641,327 0 4,641,327
Other equipment, net ......................... 1,550 0 1,550
Other Assets ................................. 50,222 0 50,222
----------- ----------- -----------
$ 5,221,907 $ 0 $ 5,221,907
----------- ----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities .. $ 966,012 $ 0 $ 966,012
Current portion - notes payable ........... 1,194,794 0 1,194,794
----------- ----------- -----------
Total current liabilities .......... 2,160,806 0 2,160,806
----------- ----------- -----------
Notes payable ................................ $ 1,950,000 $ (300,000)(1) $ 1,650,000
Other long-term liabilities .................. 206,359 0 206,359
Commitments and Contingency
Stockholders' equity
Series A preferred stock, $.01 par;
redeemable and convertible with
liquidation preference of $100
per share; 10,000,000 shares authorized;
23,000 shares issued and outstanding ...... 2,300,000 0 2,300,000
Common stock, $.01 par; 50,000,000 shares
authorized; 4,157,073 shares issued and
outstanding at December 31, 1996 .......... 41,571 3,750(1) 45,321
Additional paid-in capital ................... 6,299,629 296,250(1) 6,595,879
Deficit ...................................... (7,736,458) 0 (7,736,458)
----------- ----------- -----------
904,742 300,000(1) 1,204,741
----------- ----------- -----------
$ 5,221,907 $ 0 $ 5,221,907
=========== =========== ===========
</TABLE>
Footnote (1) : 375,000 shares of Texoil, Inc. common stock issued upon
conversion of $300,000 of debt convertible at $0.80 per share.
Page 4
<PAGE>
(c) Exhibits
10.1 RIMCO commitment letter dated April 18, 1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to signed on its behalf by the
undersigned, hereunto duly authorized.
TEXOIL, INC.
Date: APRIL 24, 1997 By: /s/ RUBEN MEDRANO
Ruben Medrano
President and Chief
Executive Officer
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EXHIBIT 10.1
April 18, 1997
Texoil, Inc.
1600 Smith, Suite 4000
Houston, Texas 77002
Attention:Mr. Ruben Medrano
Gentlemen:
Resource Investors Management Company Limited Partnership ("RIMCO"), on behalf
of RIMCO Partners, L.P., RIMCO Partners, L.P. II, RIMCO Partners, L.P. III and
RIMCO Partners, L.P. IV (the "Purchasers"), hereby agrees to purchase, and
Texoil Company (the "Company"), a wholly owned subsidiary of Texoil, Inc.,
hereby agrees to sell at private sale, at par, up to $1.5 million in principal
amount of the Company's 10% Senior Secured Exchangeable General Obligation Notes
(the "Notes").
This agreement is contingent upon completion of appropriate documentation fully
satisfactory in form and substance to each of us and our respective counsel. It
is hereby agreed that such documentation shall contain terms as described in the
attached Summary of Principal Terms, and in addition, representations, business
covenants and other provisions customary to similar transactions.
The commitment represented by this letter is made subject to, and in reliance
upon, the accuracy of information previously supplied to RIMCO, and the
understanding that there is no information that has not been supplied to RIMCO
in writing that might have a material adverse affect on the Company's business
or financial condition. The commitment hereunder is further conditioned upon the
absence of any material adverse change prior to closing in the value or
condition of the collateral to be pledged as security for the Notes.
It is understood that the law firm of Andrews & Kurth, L.L.C. will act as
counsel for the Purchasers in this matter. Whether or not the proposed
transaction is consummated, you hereby agree to pay all of the Purchaser's
out-of-pocket expenses in connection with the consummation of the sale and
purchase of the Notes, including without limitation, the reasonable fees and
expenses of the Purchasers' counsel and title consultant.
It is mutually understood and agreed that this letter shall be construed and the
relations between the parties determined in accordance with the law of the state
of Texas. It is also mutually understood and agreed that the Note purchase
agreements and other resulting transaction documents shall be deemed to be
contracts made under and shall be construed in accordance with and governed by
the law of the state of New York. It is further understood and agreed that any
action relating to this letter shall be instituted and prosecuted in the United
States District Court for the Southern District of Texas situated in Harris
County, Texas, to whose jurisdiction the parties hereto agree whatever their
domicile may be.
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JURY TRIAL WAIVED. RIMCO and the Company hereby agree that they shall and hereby
do waive trial by jury in any action, proceeding or counterclaim, whether at law
or at equity, brought by either of them, or in any matter whatsoever which
arises out of or is connected in any way with this commitment letter or its
performance.
The commitment represented by this letter shall automatically expire on April
25, 1997 if we have not received a copy of this letter duly executed by you on
or prior to such date. The expiration date of this commitment may not be
extended except by a written instrument executed by a duly authorized officer of
RIMCO.
RIMCO shall have the option to immediately terminate this commitment letter by
giving written notice thereof by registered or certified mail to the Company if
the Company fails to satisfy or perform any of the terms, conditions or
provisions of this commitment letter, or supplies RIMCO with any false or
misleading information.
This commitment shall be terminated if the closing of the transaction
contemplated hereby has not been consummated on or before May 15, 1997, except
that your obligation to pay all expenses of the Purchasers' counsel and title
consultant as described above shall survive any such termination.
If all of the foregoing is acceptable to you, please so indicate by signing and
returning one copy of this letter to Gary Milavec c/o RIMCO, 600 Travis, Suite
6875, Houston, TX. 77002.
Very truly yours,
RESOURCE INVESTORS MANAGEMENT COMPANY
LIMITED PARTNERSHIP
By: /s/ GARY J. MILAVEC
Its: Senior Vice President
TEXOIL, INC.
By: /s/ RUBEN MEDRANO
Its: President and CEO
Date: APRIL 21, 1997
Page 7
<PAGE>
SUMMARY OF PRINCIPAL TERMS
Issue: Senior Secured Exchangeable General Obligation Notes (the
"Notes")
Issuer: Texoil Company ("Texoil"), a wholly owned subsidiary of
Texoil, Inc. ("Parent")
Purchasers: Resource Investors Management Company, through one or more
of its affiliated entities ("RIMCO").
Interest Rate: 10% per annum, payable monthly.
Commitment Amount: $1,500,000
Commitment Period: Six months
Maturity: Same as the existing 10% Senior Secured Exchangeable General
Obligation Notes dated September 6, 1996
Security: Same as the existing 10% Senior Secured Exchangeable General
Obligation Notes dated September 6, 1996
Use of Proceeds: Primarily to fund Texoil's share of drilling
and completion costs for the first wells to-be-drilled in
the Raceland and Green's Lake 3-D projects. The last
$500,000 of the Commitment Amount may only be used for
completion costs on these wells unless another use of
proceeds is agreed to by RIMCO.
Payments: Prior to Maturity, payments of interest will be due and
payable monthly. All outstanding principal plus any accrued
and unpaid interest will be due and payable at Maturity.
Texoil shall not have the right or option to prepay, at any
time, all or any part of the Notes.
Conversion: The Notes are exchangeable at any time prior to Maturity, in
whole or in part, into Parent's Common Stock at a per share
price equal to $1.50, subject to adjustment. Should such
stock close at a price per share equal to or greater than
$3.00 for any consecutive twenty day trading period after
the Commitment Period, Parent can force the Purchasers to
exchange the Notes into its Common Stock. If Parent elects
not to force conversion within 30 days, the 20 day
consecutive trading period count will begin anew.
Page 8
<PAGE>
Registration Rights:The shares subject to issuance upon exchange of the
Notes shall be registered under the Securities Act of 1933
within 45 days of such conversion pursuant to a Registration
Statement which shall cover the possible resale of such
shares by the Purchasers should they so elect to do so.
Covenants: Same as the existing 10% Senior Secured Exchangeable General
Obligation Notes dated September 6, 1996
Documentation and
Reports: Same as the existing 10% Senior Secured Exchangeable General
Obligation Notes dated September 6, 1996
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