<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM 10-K/A-1
ANNUAL REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1995 File No. 0-13201
SHEFFIELD EXPLORATION COMPANY, INC.
1801 Broadway, Suite 600
Denver, Colorado 80202
Incorporated in Delaware IRS ID #06-1052062
Telephone (303) 296-1908
No securities are registered pursuant to Section 12(b) of the Act.
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK; $.01 PAR VALUE
The Company (1) has filed all reports required to be filed by
Section 13 of the Securities Exchange Act of 1934 during the preceding
12 months, and (2) has been subject to such filing requirement for the
past 90 days.
The Company had no delinquent filers pursuant to Item 405 of
Regulation S-K.
As of September 18, 1995, the aggregate market value of the shares of
Common Stock held by nonaffiliates of the Company was $4,393,000,
based upon the closing sale price of the Common Stock on the American
Stock Exchange on September 18, 1995 of $1.63 per share.
Shares of Common Stock outstanding on September 18, 1995: 3,391,261<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names, ages and titles of the
members of the Board of Directors and the executive officers of
Sheffield:
Name Age Position
- ---- --- --------
Edwin H. Morgens 54 Chairman of the Board
J. Samuel Butler 50 President, Chief Executive Officer And Director
Randall E. King 41 Director
David A. Melman 52 Director
McLain J. Forman 66 Director
David L. Milanesi 48 Vice President, Secretary and Treasurer
Jerry D. Smothermon 58 Vice President
EDWIN H. MORGENS has been a director since 1981 and served as
President of the Company from 1986 to September 1990. He has been
Chairman of Morgens, Waterfall, Vintiadis & Co., Inc., a financial
services firm, since 1970. Mr. Morgens is also a general partner of
three New York investment limited partnerships and chairman of the
corporate general partner of a Delaware investment partnership.
J. SAMUEL BUTLER has been a Director, President and Chief Executive
Officer of the Company since September 1990. He served as the Chief
Executive Officer of Trinity Petroleum Management, Inc. ("Trinity")
and Sterling Energy Corporation ("Sterling") from 1989 until December
1994, and was also a principal in the investment banking firm of
Petrie Parkman & Co. from 1989 until December 1994. From 1985 until
his affiliation with Trinity and Sterling, he was President and Chief
Operating Officer of Columbus Energy Corporation (Denver, Colorado).
He is presently a director of Columbus Energy Corporation. Mr. Butler
joined the predecessor of Columbus Energy Corporation in 1974.
RANDALL E. KING has been a principal with the investment banking firm
of Petrie Parkman & Co. since April 1989. Mr. King served as Vice
President of the Company from September 1990 until December 1994.
Also, from 1989 until November 1994, he served as Executive Vice
President of Sterling Energy Corporation. Mr. King served as a Vice
President of Netherland, Sewell & Associates, a petroleum engineering
consulting concern, from 1981 through 1989.
DAVID A. MELMAN has been a Director of the Company since 1982. He has
been Executive Vice President since March 1989 and Vice President -
General Counsel for The Exploration Company of Louisiana since January
1984. He has been a director of such company since September 1987.
MCLAIN J. FORMAN has been a director of the Company since May 1988.
Mr. Forman has been President of Forman Petroleum Corporation, a
private company engaged in petroleum exploration and production, since
1982.
DAVID L. MILANESI has been Treasurer of the Company or its
predecessor, Knight Royalty Corporation, since December 1981. He was
elected Vice President in September 1990. He served as Controller
from December 1981 until September 1988 and as Secretary from January
1983 to September 1988 and from March 1991 to the present.
Mr. Milanesi is a Certified Public Accountant and has a Masters Degree
in Business Administration from Northwestern University.
JERRY D. SMOTHERMON has been Vice President - Operations of the
Company since December 1994. From January 1991 until December 1994 he
served in the same capacity with Trinity. Prior thereto, from July
1989, he served as a consultant to Trinity. Mr. Smothermon received a
degree in Petroleum Engineering from the University of Wyoming and is
a registered Professional Engineer.
The Bylaws of the Company provide that the number of directors shall
be fixed by the Board of Directors. The number of directors is
presently fixed at five and there are no vacancies.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
Page
(a) Financial Statements and Financial Statement Schedules:
Report of Independent Accountants. . . . . . . . . . . . . . . 18
Consolidated Balance Sheets as of June 30, 1995 and 1994 . . . 19
Consolidated Statements of Operations for the years
ended June 30, 1995, 1994 and 1993. . . . . . . . . . . . 20
Consolidated Statements of Changes in Stockholders' Equity
for the years ended June 30, 1995, 1994 and 1993. . . . . 21
Consolidated Statements of Cash Flows for the years
ended June 30, 1995, 1994 and 1993. . . . . . . . . . . . 22
Notes to Consolidated Financial Statements . . . . . . . . . . 23
Report of Independent Accountants on Financial Statement
Schedules . . . . . . . . . . . . . . . . . . . . . . . . 36
Financial Statements Schedules:
Schedule II: Valuation and Qualifying Accounts . . . . . 39
(b) Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
A list of the exhibits required by Item 601 of Regulation S-K to
be filed as part of this report is set forth in the Index to
Exhibits, and is incorporated herein by reference.
REPORTS ON FORM 8-K
No reports were filed on Form 8-K during the quarter ended
June 30, 1995.
<PAGE>
SHEFFIELD EXPLORATION COMPANY, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Balance, Balance,
Beginning End of
of Period Additions Deductions Period
----------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
Year ended June 30, 1993
Deferred tax asset valuation allowance $ --- $1,426,000 $ --- $1,426,000
Trade receivable allowance $ 6,900 $ --- $ --- $ 6,900
Year ended June 30, 1994
Deferred tax asset valuation allowance $1,426,000 $ 293,000 $ --- $1,719,000
Trade receivable allowance $ 6,900 $ --- $ (6,089) $ 811
Year ended June 30, 1995
Deferred tax asset valuation allowance $1,719,000 $ 472,000 $ (288,000) $1,903,000
Trade receivable allowance $ 811 $ --- $ (373) $ 438
</TABLE>
<PAGE>
SIGNATURE PAGE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
SHEFFIELD EXPLORATION COMPANY, INC.
December 11, 1995 /s/ David L. Milanesi
----------------------------------------
David L. Milanesi, Treasurer
(Chief Financial Officer)
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
3.1 Restated Certificate of Incorporation
3.2 By-Laws (a)
10.1 1987 Employee Stock Option Plan. Incorporated by
reference to Sheffield Exploration Company, Inc. (reg
No. 33-16265) Form S-1 Registration Statement dated
October 9, 1987.
10.2 Limited Partnership Agreement dated July 19, 1988
between the Company as general partner and TFP, Inc. as
limited partner. Incorporated by reference to
Sheffield Exploration Company, Inc. (S.E.C. File No.
0-13201) Form 8-K dated July 15, 1988.
10.3 Stock Purchase Agreement dated August 31, 1990 between
Sterling Energy Corporation and the Company. (b)
10.4 Joint Acquisition Agreement dated August 31, 1990
between Sterling Energy Corporation and the Company.
(b)
10.5 Management Agreement dated August 31, 1990 between
Trinity Petroleum Management, Inc. and the Company. (b)
10.6 Purchase Agreement dated December 27, 1990 between the
Company and Sterling Energy Corporation. (a)
10.7 Merger Agreement dated November 30, 1990 between the
Company and New Sheffield Exploration Company, Inc. (a)
10.8 The Company's 1990 Stock Option Plan. (a)
10.9 The Company's Amended and Restated 1990 Stock Option
Plan. (d)
10.10 March 19, 1991 warrant issued to Petrie Parkman & Co.
for the purchase of 81,450 shares of Company common
stock for $2.00 per share. Incorporated by reference
to Sheffield Exploration Company, Inc. (S.E.C. File No.
0-13201) Form 10-K dated September 19, 1991.
10.11 Partnership agreement between the Company's wholly-
owned subsidiary, Sheffield Gas Processors, Inc., and
Interenergy. Incorporated by reference to Sheffield
Exploration Company, Inc. (S.E.C. File No. 0-13201)
Form 8-K dated September 26, 1991.
10.12 Purchase and Sale Agreement between the Company's
wholly-owned subsidiary, Sheffield Gas Processors,
Inc., and a subsidiary of Sunrise Energy Services, Inc.
for Republic Natural Gas Company. Incorporated by
reference to Sheffield Exploration Company, Inc.
(S.E.C. File No. 0-13201) Form 8-K dated June 7, 1993.
10.13 Joint Venture Agreement between the Company and III
Exploration, Inc., a wholly-owned subsidiary of
Intermountain Industries, Inc. Incorporated by
reference to Sheffield Exploration Company, Inc.
(S.E.C. File No. 0-13201) Form 8-K dated September 14,
1993.
<PAGE>
INDEX TO EXHIBITS (continued)
Exhibit No. Description
- ----------- -----------
10.14 Credit Agreement between the Company and Norwest Bank
Denver, National Association dated April 9, 1993 (c).
10.15 Amended Credit Agreement between the Company and
Norwest Bank Denver, National Association dated
September 16, 1993 (c).
10.16 Prairie Gas Transportation Company and Republic Natural
Gas Company Agreement and Plan of Merger dated December
1, 1993. (d)
10.17 Merger Agreement dated December 31, 1994 between the
Company, Trinity Petroleum Management, Inc. and
SheffSub, Inc.*
10.18 Amended Credit Agreement between the Company and
Norwest Bank Denver, National Association dated May 10,
1995.*
10.19 Purchase and Sale Agreement dated September 25, 1995
between The Company, Sheffield Gas Processors, Inc.,
Republic Natural Gas Company and NGC Energy Resources,
Limited Partnership.*
22 Subsidiaries:
Sheffield Operating Company, Inc.
Knight Royalty Corporation, Inc.
Sheffield Gas Processors, Inc.
Republic Natural Gas Company
Trinity Petroleum Management, Inc.
(a) Incorporated by reference to Sheffield Exploration
Company, Inc. (S.E.C. File No. 0-13201) Form S-4 dated
January 22, 1991.
(b) Incorporated by reference to Sheffield Exploration
Company, Inc. (S.E.C. File No. 0-13201) Form 10-K
dated September 19, 1990
(c) Incorporated by reference to Sheffield Exploration
Company, Inc. (S.E.C. File No. 0-13201) Form 10-K dated
September 20, 1993.
(d) Incorporated by reference to Sheffield Exploration
Company, Inc. (S.E.C. File No. 0-13201) Form 10-K dated
September 27, 1994.
* Agreement filed only with manually executed copies of
Form 10-K.
RESTATED
CERTIFICATE OF INCORPORATION
OF
SHEFFIELD EXPLORATION COMPANY, INC.
Sheffield Exploration Company, Inc. was originally
incorporated as New Sheffield Exploration Company, Inc. on
November 27, 1990. This Restated Certificate of Incorporation was
adopted by the Board of Directors pursuant to Section 245 of the
Delaware General Corporation Law without a vote of the stockholders
and only restates and integrates and does not further amend the
provisions of the Corporation's Certificate of Incorporation as
previously amended or supplemented. No discrepancy exists between
those provisions and the provisions in this Restated Certificate of
Incorporation.
ARTICLE I
This Corporation is being organized and will exist under
Delaware law.
ARTICLE II
The name of the Corporation is Sheffield Exploration
Company, Inc.
ARTICLE III
The address of the Corporation's registered office in the
State of Delaware is Corporation Trust Center, 1209 Orange Street,
City of Wilmington, County of New Castle 19801. The name of its
registered agent at such address is Corporation Trust Company.
ARTICLE IV
The nature of the business of the Corporation and the
purposes for which it is organized are
To engage in any business and in any lawful act or
activity for which corporations may be organized
under the General Corporation Law of Delaware and
to possess and employ all powers and privileges
now or hereafter granted or available under the
laws of the State of Delaware to such
corporations.
ARTICLE V
5.1 The total number of shares that the Corporation shall
have authority to issue is 12,000,000 shares, of which 10,000,000
shares shall be common stock , each with a par value of $.01 ("Common
Stock"), and 2,000,000 shares shall be preferred stock, each with a
par value of $.01 ("Preferred Stock").
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5.2 Each holder of Common Stock shall be entitled to one
vote for each share of Common Stock held on all matters as to which
holders of Common Stock shall be entitled to vote. Except for and
subject to those powers, preferences and rights, if any, expressly
granted to the holders of the Preferred Stock, or except as may be
provided by the laws of the State of Delaware, the holders of Common
Stock shall have exclusively all other rights of stockholders of the
Corporation, including, but not by way of limitation (i) the right to
receive dividends, when and as declared by the Board of Directors out
of assets lawfully available therefor, and (ii) in the event of any
distribution of assets upon the dissolution or winding up of the
Corporation, the right to receive ratably and equally all the assets
of the Corporation remaining after the payment to the holders of the
Preferred Stock of the specific amounts, if any, which they are
entitled to receive as may be provided herein or pursuant hereto.
5.3 The board of directors of the Corporation is
authorized, subject to limitations prescribed by law, to provide by
resolution or resolutions for the issuance of the shares of preferred
stock as a class or in series, and, by filing a certificate of
designations, pursuant to the Delaware General Corporation Law,
setting forth a copy of such resolution or resolutions, to establish
from time to time the number of shares to be included in each such
series, and to fix the designation , powers, preferences and rights of
the shares of the class or of each such series and the qualifications,
limitations and restrictions thereof. The authority of the board of
directors with respect to the class or each series shall include, but
not be limited to, determination of the following:
(i) The number of shares constituting any series
and the distinctive designation of that series;
(ii) Whether the class or any series shall have
the right to receive dividends and, if so, the dividend rate
on the shares of the class or of any series, whether
dividends shall be cumulative, and, if so, from which date
or dates, and the relative rights of priority, if any, of
payment of dividends on shares of the class or of that
series;
(iii) Whether the class or any series shall have
voting rights, in addition to the voting rights, if any,
provided by law, and, if so, the terms of such voting
rights;
(iv) Whether the class or any series shall have
conversion privileges, and, if so, the terms and conditions
of such conversion, including provision for adjustment of
the conversion rate in such events as the board of directors
shall determine;
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(v) Whether the shares of the class or of any
series shall be redeemable, and, if so, the terms and
conditions of such redemption, including the date or dates
upon or after which they shall be redeemable and the amount
per share payable in case of redemption, which amount may
vary under different conditions and at different redemption
dates;
(vi) Whether the class or any series shall have a
sinking fund for the redemption or purchase of shares of the
class or of that series, and, if so, the terms and amount of
such sinking fund;
(vii) The rights of the shares of the class or of
any series in the event of voluntary or involuntary
dissolution or winding up of the corporation, and the
relative rights of priority, if any, of payment of shares of
the class or of that series;
(viii) Any other powers, preferences, rights,
qualifications, limitations, and restrictions of the class
or of any series.
ARTICLE VI
6.1 The number of directors of the Corporation shall be
fixed from time to time in the manner provided in the bylaws and may
be increased or decreased from time to time in the manner provided in
the bylaws.
6.2 Election of directors need not be by written ballot
except and to the extent provided in the bylaws of the Corporation.
ARTICLE VII
The board of directors of the Corporation is expressly
authorized to make, alter, or repeal the bylaws of the Corporation,
but such authorization shall not divest the stockholders of the power,
nor limit their power, to adopt, amend, or repeal bylaws.
ARTICLE VIII
No director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director , except as to liability (i) for any
breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
for violations of
-3-<PAGE>
Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived any improper personal
benefit. If the Delaware General Corporation Law hereafter is amended
to eliminate or limit further the liability of a director, then, in
addition to the elimination and limitation of liability provided by
the preceding sentence, the liability of each director shall be
eliminated or limited to the fullest extent provided or permitted by
the amended Delaware General Corporation Law. Any repeal or
modification of this Article VIII shall not adversely affect any right
or protection of a director under this Article VIII, as in effect
immediately prior to such repeal or modification, with respect to any
liability that would have accrued, but for this Article VIII, prior to
such repeal or modification.
ARTICLE IX
The Corporation shall, to the fullest extent permitted by
Delaware law as in effect from time to time, indemnify any person
against all liability and expense (including attorneys' fees)
incurred by reason of the fact that he is or was a director or officer
of the Corporation or, while serving as a director or officer of the
Corporation, he is or was serving at the request of the Corporation as
a director, officer, partner or trustee of, or in any similar
managerial or fiduciary position of, or as an employee or agent of,
another corporation, partnership, joint venture, trust association, or
other entity. Expenses (including attorneys' fees) incurred in
defending an action, suit, or proceeding may be paid by the
Corporation in advance of the final disposition of such action, suit,
or proceeding to the full extent and under the circumstances permitted
by Delaware law. The Corporation may purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee,
fiduciary, or agent of the Corporation against any liability asserted
against and incurred by such person in any such capacity or arising
out of such person's position, whether or not the Corporation would
have the power to indemnify against such liability under the
provisions of this Article IX. The indemnification provided by this
Article IX shall not be deemed exclusive of any other rights to which
those indemnified may be entitled under this certificate of
incorporation, any bylaw, agreement, vote of stockholders or
disinterested directors, statute, or otherwise, and shall inure to the
benefit of their heirs, executors, and administrators. The provisions
of this Article IX shall not be deemed to preclude the Corporation
from indemnifying other persons from similar or other expenses and
liabilities as the board of directors or the stockholders may
determine in a specific instance or by resolution of general
application.
ARTICLE X
The Corporation shall have authority, to the fullest extent
now or hereafter permitted by the General Corporation Law of the State
of Delaware, or by any other applicable law, to enter into any
contract or transaction with one or more of its directors or officers,
or with any corporation, partnership, joint venture, trust,
association, or
-4-<PAGE>
other entity in which one or more of its directors or officers are
directors or officers, or have a financial interest, notwithstanding
such relationships and notwithstanding the fact that the director or
officer is present at or participates in the meeting of the Board of
Directors or committee thereof which authorizes the contract or
transaction.
IN WITNESS WHEREOF, The Corporation has caused this Restated
Certificate of Incorporation to be signed by its President or Vice
President and attested by its Secretary or Assistant Secretary this
30th day of November, 1995.
- ----
SHEFFIELD EXPLORATION COMPANY, INC.
By /s/ J. Samuel Butler
--------------------------------------
Name: J. Samuel Butler
Title: President
ATTEST:
By: /s/ David L. Milanesi
---------------------------
Name: David L. Milanesi
Title: Secretary
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