<PAGE>
SHEFFIELD EXPLORATION COMPANY, INC.
_________________________
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 5, 1995
____________________________________
The Annual Meeting of Stockholders of Sheffield Exploration
Company, Inc. (the "Company") will be held at the Norwest Bank
Building, Forum Room, 1740 Broadway, Denver, Colorado at 10:30 a.m. on
Tuesday, December 5, 1995, for the purpose of considering and voting
upon the following:
1. To elect five directors to hold office until the next Annual
Meeting of Stockholders and until their successors are
elected and qualified;
2. To approve the appointment of Coopers & Lybrand as the
Company's auditors for 1996; and
3. Any other matters which may properly come before the meeting
or any adjournment thereof.
Information relating to the above matters is set forth in the
accompanying Proxy Statement. Only shareholders of record at the
close of business on November 3, 1995 will be entitled to vote at the
meeting or any adjournment thereof.
By Order of the Board of Directors
David L. Milanesi
David L. Milanesi
Secretary
Denver, Colorado
November 6, 1995
PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN
THE ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
IF YOU ATTEND THE MEETING AND SO DESIRE, YOU MAY WITHDRAW YOUR PROXY
AND VOTE IN PERSON. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED
STATES.<PAGE>
SHEFFIELD EXPLORATION COMPANY, INC.
______________________________
PROXY STATEMENT
For the Annual Meeting of Stockholders
to be held on December 5, 1995.
INTRODUCTION
This Proxy Statement is being furnished to the stockholders of
Sheffield Exploration Company, Inc., a Delaware corporation (the
"Company"), in connection with the solicitation of proxies by the
Board of Directors of the Company (the "Board") for use at the Annual
Meeting of Stockholders of the Company to be held on December 5, 1995
(the "Meeting"), and at any adjournment thereof, for the purpose of
considering and voting upon the matters set forth in the Notice of
Annual Meeting. The Meeting will be held at the Norwest Bank
Building, Forum Room, 1740 Broadway, Denver, Colorado at 10:30 a.m.
The approximate date on which this Proxy Statement is being mailed to
stockholders is November 6, 1995.
SHARES OUTSTANDING AND VOTING RIGHTS
The close of business on November 3, 1995 has been fixed as the
record date (the "Record Date") for the determination of holders of
the Company's common stock, $.01 par value ("Common Stock") entitled
to notice of, and to vote at, the Meeting. At the close of business
on November 3, 1995, there were 3,391,261 shares of Common Stock
issued and outstanding. Each share of Common Stock is entitled to one
vote per share. Cumulative voting is not allowed. A majority of the
Company's outstanding Common Stock represented in person or by proxy
shall constitute a quorum at the Meeting. If a quorum is present at
the Meeting, a majority of shares voting is required for approval of
the matters to be voted upon.
Shares represented by properly executed and unrevoked proxies
will be voted at the Meeting in accordance with the directions
contained therein. If no direction is made on a proxy card, the
shares represented by such proxy will be voted by the persons
designated in the proxy "FOR" the election of the Board's nominees to
the Board of Directors, and "FOR" the selection of Coopers & Lybrand
as the Company's independent accountants. A stockholder executing and
returning a proxy card has the power to revoke his or her proxy at any
time before it is exercised at the Meeting. Such revocation, to be
effective, must either be communicated in writing to the Secretary of
the Company prior to the Meeting or effected by attendance at the
Meeting and voting in person.
PROXY SOLICITATIONS
The cost of proxy solicitations by or on behalf of the Board of
Directors will be borne by the Company. In addition to solicitation
of proxies by use of the mail, certain of the officers or employees of
the Company may solicit proxies personally or by telephone. Such
officers or employees will receive no additional remuneration in
connection with the solicitation of proxies. The Company will also,
where appropriate, request brokers, dealers, banks and their nominees
to transmit proxy materials to their clients and will reimburse them
for reasonable expenses related thereto.
1<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
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.
Unless otherwise specified, each properly executed proxy received
will be voted "FOR" the election of the five members named below to
serve until the 1995 Annual Meeting of Stockholders. Each of the
nominees has consented to be named a nominee in this Proxy Statement
and to serve as a director if elected. Should any nominee become
unable or unwilling to accept a nomination or election, the persons
named in the enclosed proxy card will vote for the election of a
nominee designated by the Board of Directors or will vote for such
lesser number of directors as may be prescribed by the Board of
Directors in accordance with the Company's Bylaws.
The following persons have been nominated as directors:
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.
BOARD OF DIRECTORS' COMMITTEES AND MEETINGS
The Board has an Audit Committee composed of Messrs. Morgens,
Melman and Forman. The Company does not have a compensation or
nominating committee.
2<PAGE>
The primary functions of the Audit Committee are to make
recommendations to the Board concerning engaging the independent
auditors, to review the overall scope and the results of the annual
audit and to make inquires as to the adequacy of the Company's
accounting, financial and operating controls when needed.
During the fiscal year ended June 30, 1995, the Audit Committee
held one meeting and the Board of Directors held seven meetings. Mr.
King attended fewer than 75% of the meetings during fiscal 1995.
See "Beneficial Share Ownership" for the security ownership of
the nominees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE NOMINEES NAMED ABOVE.
PROPOSAL TWO
APPROVAL OF INDEPENDENT ACCOUNTANTS
The Board, upon recommendation of its Audit Committee, has
appointed Coopers & Lybrand, Certified Public Accountants, to examine
the consolidated financial statements of the Company for fiscal 1996.
Stockholders are being asked to approve this appointment. Coopers &
Lybrand has served the Company in this capacity since 1984.
Representatives of Coopers & Lybrand are expected to be present
at the Meeting with the opportunity to make a statement if they desire
to do so and are expected to be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF
COOPERS & LYBRAND AS INDEPENDENT ACCOUNTANTS.
EXECUTIVE OFFICERS
The executive officers of the Company and their respective
positions and ages are as follows:
Edwin H. Morgens 54 Chairman
J. Samuel Butler 50 President and Chief Executive Officer
Randall E. King 41 Vice President
David L. Milanesi 48 Vice President, Secretary and Treasurer
Jerry D. Smothermon 58 Vice President, Operations
Biographical data on Mr. Morgens, Mr. Butler and Mr. King is set
forth under Board of Directors above.
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 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.
3<PAGE>
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.
BENEFICIAL SHARE OWNERSHIP
The following table sets forth, as of October 27, 1995,
information regarding the beneficial ownership of the Company's Common
Stock (i) by each person known by the Company to be the beneficial
owner of more than five percent of the Common Stock of the Company,
(ii) by each of the Company's directors and (iii) by all directors and
officers of the Company as a group.
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS AMOUNT AND NATURE OUTSTANDING
OF BENEFICIAL OWNER BENEFICIAL OWNER <F1> SHARES <F2>
- ------------------- --------------------- -----------
<S> <C> <C>
Edwin H. Morgens 486,050 <F3> 14.3%
10 East 50th Street
New York, NY 10022
J. Samuel Butler 174,810 <F4> 5.1%
1801 Broadway, Suite 600
Denver, CO 80202
Randall E. King 41,667 <F5> 1.2%
1801 Broadway, Suite 600
Denver, CO 80202
David A. Melman 14,761 *
1801 Broadway, Suite 600
Denver, CO 80202
McLain J. Forman 6,667 *
1801 Broadway, Suite 600
Denver, CO 80202
All Officers and Directors 805,621 <F6> 23.0%
as a Group (7 persons)
<FN>
* Indicates less than one percent.
<F1> All shares are owned both of record and beneficially unless otherwise specified by footnote to this table.
<F2> Based on 3,391,261 shares of Common Stock outstanding.
4<PAGE>
<F3> Shares are held by the Edwin H. Morgens and Linda H. Morgens 1993 Trust.
<F4> Includes 50,000 shares issuable upon exercise of stock options granted under the 1990 Stock Option Plan.
Also includes 7,000 shares held in trust for Mr. Butler's grandchildren for which Mr. Butler serves as
Trustee. Mr. Butler disclaims beneficial ownership of such 7,000 shares.
<F5> Includes 16,667 shares issuable upon exercise of stock options granted under the 1990 Stock Option Plan.
<F6> Includes 50,000 shares issuable upon exercise of stock options granted under the 1990 Stock Option Plan and
not included in prior footnotes.
</TABLE>
MANAGEMENT COMPENSATION
EXECUTIVE COMPENSATION
During September 1990, the Company signed an agreement with
Trinity Petroleum Management ("Trinity") providing for Trinity to
furnish management services to the Company. In conjunction with the
agreement, some of the Company's officers transferred to Trinity,
maintaining their status as officers of the Company but being
compensated by Trinity. Accordingly, the Company paid no compensation
other than grants of stock options to any officer or employee during
the 1993 and 1994 fiscal years and through the second quarter of
fiscal 1995. On December 31, 1994, however, the Company purchased all
of the outstanding stock of Trinity and, therefore, the management
services agreement with Trinity was discontinued and the Company's
officers began receiving compensation directly from the Company.
Compensation paid and stock options granted to Mr. Butler, the Chief
Executive Officer of the Company, is set forth in the following table:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
____________________________________________________________________________________________________________________
ANNUAL COMPENSATION LONG-TERM COMPENSATION
___________________ _______________________
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS/OPTIONS/SARS
___________________________ _____ _________ _________ ___________________
<S> <C> <C> <C> <C>
J. Samuel Butler
President & CEO 1995 $65,000 <F1> $ 65,000 <F2> ----
1994 N.A N.A 50,000 shares
1993 N.A N.A 50,000 shares
<FN>
<F1> Compensation was paid by the Company for the quarters ended March 31, 1995 and June 30, 1995. Compensation
for the quarters ended September 30, 1994 and December 31, 1994 was paid by Trinity.
<F2> In January 1995, Mr. Butler was granted a cash bonus of $65,000 for the purpose of exercising a Special
Purchase Warrant, purchasing 43,333 shares of common stock at a price of $1.50 per share. The bonus was
granted in conjunction with the Company's acquisition of Trinity.
</TABLE>
5<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTIONS/SAR VALUES<F1>
NUMBER OF
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS FOR OPTIONS/SARS FOR
SHARES VALUE YEAR END YEAR END
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE
_________________ ___________ ________ _______________ ____________________
<S> <C> <C> <C> <C>
J. Samuel Butler 43,333<F1> -0- 50,000/50,000 $71,875/$71,875
<FN>
<F1> Special Purchase Warrant issued in September 1990 for 43,333 shares of Common Stock at a purchase price of
$1.50 per share. The warrant became exercisable in three equal parts on September 13, 1991, 1992 and 1993
and was due to expire on September 14, 1995.
</TABLE>
COMPENSATION TO DIRECTORS
Directors of the Company are paid a director's fee of $250 for
each meeting of the Board of Directors that they attend.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to the terms of the Company's management agreement,
Trinity provided management and administrative services to the Company
and to Sterling Energy Corporation, a 6.6% stockholder of the Company.
In conjunction with the purchase of Republic in May 1993, effective
June 1, 1993, the Company agreed to an increase in the management fees
payable under the management agreement with Trinity from $100,000 per
year to $232,000 through June 30, 1994 and $172,000 thereafter. On
December 31, 1994, the Company purchased all of the outstanding stock
of Trinity from Mr. J. Samuel Butler. Mr. Butler is a director,
officer and stockholder of the Company, and was a director, officer
and the sole stockholder of Trinity at the time of the transaction.
The Company's Board of Directors, with Mr. Butler abstaining, approved
consummation of the transaction and determined that the value of the
Trinity shares received by the Company in exchange for the issuance by
the Company to Mr. Butler of 60,000 shares of Common Stock (valued at
$1.44 per share based upon the then-current stock price) and a cash
payment of $9,756 represented a fair value to the Company.
MISCELLANEOUS
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K, as filed with the
Securities and Exchange Commission for the fiscal year ended June 30,
1995 (the "Annual Report"), is being mailed herewith to the Company's
stockholders entitled to notice of, and to vote at, the Meeting. In
addition, upon written request of any stockholder not receiving the
Annual
6<PAGE>
Report, the Company will provide without charge, a copy of the Annual
Report. Requests should be mailed to the Corporate Secretary,
Sheffield Exploration Company, Inc., 1801 Broadway, Suite 600, Denver,
Colorado 80202. The Company's telephone number is (303) 296-1908.
PROPOSALS OF SECURITY HOLDERS FOR 1996 MEETING
Proposals of security holders intended to be presented at the
1996 Annual Meeting must be received by the Company for inclusion in
the proxy statement and form of proxy relating to that meeting no
later than July 9, 1996.
OTHER MATTERS
The proxy holders are authorized to vote, in their discretion,
upon any other business that comes before the Meeting and any
adjournment of the Meeting. The Board knows of no other matters which
will be presented to the Meeting.
David L. Milanesi
David L. Milanesi
Secretary
7<PAGE>
PROXY SHEFFIELD EXPLORATION COMPANY, INC. PROXY
- ----------------------------------------------------------------------
The undersigned stockholder hereby appoints J. SAMUEL BUTLER and
DAVID L. MILANESI, and any one of them, the proxies of the
undersigned, with power of substitution, hereby revoking any proxy
heretofore given, to vote all shares which the undersigned is entitled
to vote at the 1995 Annual Meeting of Stockholders of SHEFFIELD
EXPLORATION COMPANY, INC. (the "Company") to be held at Norwest Bank
Building, Forum Room, 1740 Broadway, Denver, Colorado at 10:30 a.m.,
on Tuesday, December 5, 1995, and at any adjournments thereof, with
all powers the undersigned would possess if personally present, and
the undersigned authorizes and instructs said proxies to vote in their
discretion upon any other matters as may properly come before the
meeting, and specifically as follows:
Item 1 - Election of directors: Edwin H. Morgens, J. Samuel Butler,
David A. Melman, McLain J. Forman and Randall E. King. (TO
WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME.)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Item 2 - The approval of Coopers & Lybrand as the Company's
independent auditors for fiscal 1996.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(SEE OTHER SIDE)<PAGE>
Date____________________________________
Signature_______________________________
Signature_______________________________
Please mark, date and sign as your name
appears above and return in the enclosed
envelope. If acting as executor,
administrator, trustee, guardian, etc.,
you should so indicate when signing. If
the signer is a corporation, please sign
the full corporate name by a duly
authorized officer. If shares are held
jointly, each stockholder named should
sign.
THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. IF NO DIRECTION IS GIVEN,
SUCH SHARES WILL BE VOTED "FOR" ITEMS 1
AND 2.
