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): September 17, 1998
TEXOIL, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 0-12633 88-0177083
(State of Incorporation) (Commission File Numb) (I.R.S. Employer
Identification No.)
110 CYPRESS STATION DRIVE
SUITE 220
HOUSTON, TEXAS 77090
(Address of principal
executive offices)
(281) 537-9920
(Issuer's telephone number)
(NOT APPLICABLE)
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. SIGNIFICANT EVENT
On September 17, 1998, Texoil, Inc. (the "Company"or "Texoil") signed a
definitive agreement with Sonat Exploration Company, a subsidiary of Sonat
Inc.("Sonat"), to acquire all of Sonat's right, title and interest in ten (10)
producing oil and gas fields in Texoil's focus areas of South Texas and South
Louisiana, with an effective date of April 1, 1998. The working interests to be
acquired range from 40% to 100% and operations for nine (9) of the fields are
expected to be transferred to Texoil. The purchase agreement contains customary
representations, warranties and covenants, whereby certain adjustments may be
made for title, environmental condition and loss of value. Under certain limited
circumstances, the agreement could be terminated and the transaction not
consummated. The proposed acquisition, however, is scheduled to close on or
about November 1, 1998. The nature of current production from the properties
is approximately 70% gas and 30% oil.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
5.1 News Release dated September 22, 1998
- ------------
<PAGE>
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 thereunder duly authorized.
DATE:___________________________ TEXOIL, INC.
By: /S/ FRANK A.LODZINSKI
FRANK A. LODZINSKI
President and Principal
Financial Officer
EXHIBIT 5.1
TEXOIL, INC.
- --------------------------------------------------------------------------------
NEWS RELEASE FOR IMMEDIATE
RELEASE
----------------------
COMPANY CONTACT 110 CYPRESS STATION DRIVE
- --------------- SUITE NO. 220
FRANK A. LODZINSKI HOUSTON, TEXAS 77090
PRESIDENT (281) 537-9920
(281) 537-8324 - FAX
TEXOIL REPORTS AGREEMENT TO ACQUIRE PROPERTIES IN
SOUTH TEXAS AND SOUTH LOUISIANA FROM SONAT EXPLORATION COMPANY
HOUSTON, TEXAS, SEPTEMBER 21, 1998 - TEXOIL, INC., (NASDAQ, SMALL CAP: TXLI),
ANNOUNCED TODAY THAT IT HAS ENTERED INTO A PURCHASE AND SALE AGREEMENT WITH
SONAT EXPLORATION COMPANY TO ACQUIRE TEN (10) FIELDS IN TEXOIL'S FOCUS AREAS OF
SOUTH TEXAS AND SOUTH LOUISIANA, EFFECTIVE APRIL 1, 1998. THE WORKING INTERESTS
TO BE ACQUIRED RANGE FROM 40% TO 100% AND OPERATIONS FOR NINE (9) OF THE FIELDS
ARE EXPECTED TO BE TRANSFERRED TO TEXOIL. THE PURCHASE AND SALE AGREEMENT HAS
CUSTOMARY REPRESENTATIONS, WARRANTIES AND COVENANTS, WHEREBY CERTAIN ADJUSTMENTS
MAY BE MADE FOR TITLE, ENVIRONMENTAL AND LOSS OF VALUE AND UNDER CERTAIN LIMITED
CIRCUMSTANCES, THE TRANSACTION COULD BE TERMINATED. HOWEVER, THE PROPOSED
ACQUISITION IS EXPECTED TO CLOSE ON OR ABOUT NOVEMBER 1, 1998. CURRENT
PRODUCTION IS APPROXIMATELY 70% GAS AND 30% OIL.
MR. LODZINSKI, CHIEF EXECUTIVE OFFICER OF TEXOIL STATED, "PENDING CLOSING, THE
ACQUISITION OF THE GULF COAST PROPERTIES FROM SONAT IS EXPECTED TO DOUBLE THE
SIZE OF THE COMPANY AND INCREASE CASH FLOWS MORE SIGNIFICANTLY, BY APPROXIMATELY
$750,000 PER MONTH BASED ON RECENT OPERATING RESULTS. THE PROPERTIES WILL
FAVORABLY ALTER THE RATIO OF PROVED OIL TO GAS FROM THE PRESENT 75% - 25%, TO A
MORE BALANCED 55% - 45% OIL TO GAS RATIO. THE PROPERTIES ARE GEOGRAPHICALLY
LOCATED IN SOUTH TEXAS AND SOUTH LOUISIANA, IN PROXIMITY TO OTHER FIELDS
OPERATED BY THE COMPANY, SO CERTAIN BENEFICIAL OPERATING ECONOMIES ARE EXPECTED
TO BE ACHIEVED. TEXOIL DOES NOT EXPECT TO INCUR A SIGNIFICANT AMOUNT OF
ADDITIONAL COSTS RELATED TO THE TECHNICAL AND ADMINISTRATIVE PERSONNEL AS A
RESULT OF THE ACQUISITION. THE COMPANY EXPECTS TO CLOSE THE ACQUISITION WITH
BANK FINANCING, BUT MAY CHOOSE TO CLOSE A PORTION INTO CERTAIN EXISTING
AFFILIATED PARTNERSHIPS."
MR. LODZINSKI SUMMARIZED BY FURTHER STATING, "THE ACQUISITION IS A MAJOR GROWTH
STEP FOR THE COMPANY, IMPROVES CASH FLOWS, ASSET DIVERSIFICATION AND THE
COMPOSITION OF RESERVES AND FURTHER POSITIONS THE COMPANY TO ATTRACT THE CAPITAL
NECESSARY FOR CONTINUED GROWTH, THROUGH ITS DIVERSIFIED PROGRAM OF ACQUISITIONS,
DEVELOPMENT AND EXPLORATION. IN ADDITION, MANAGEMENT EXPECTS THE COMPANY TO
BECOME MORE ATTRACTIVE TO FINANCIAL INSTITUTIONS AND SHAREHOLDERS CONTROLLING
POTENTIAL CORPORATE MERGER OR ACQUISITION TARGETS."
TEXOIL, INC., IS AN INDEPENDENT ENERGY COMPANY ENGAGED IN THE ACQUISITION AND
DEVELOPMENT OF OIL AND GAS RESERVES THROUGH AN ACTIVE AND DIVERSIFIED PROGRAM
WHICH INCLUDES PURCHASES OF RESERVES, RE-ENGINEERING, DEVELOPMENT AND
EXPLORATION ACTIVITIES, CURRENTLY FOCUSED IN TEXAS, SOUTH LOUISIANA AND THE
TEXAS GULF COAST. ON DECEMBER 31, 1997, THE COMPANY ACQUIRED CLIFFWOOD OIL & GAS
CORP., IN A MERGER WHICH RESULTED IN A CHANGE OF MANAGEMENT, BUSINESS STRATEGY,
AND SUBSTANTIALLY INCREASED THE COMPANY'S OVERALL FINANCIAL RESOURCES.
<PAGE>
THIS RELEASE MAY CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES ACT
OF 1934. TEXOIL BELIEVES THAT ITS EXPECTATIONS ARE BASED ON REASONABLE BUSINESS
ASSUMPTIONS, HOWEVER, NO ASSURANCE CAN BE GIVEN THAT THE COMPANY'S GOALS WILL BE
ACHIEVED.
