AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 7, 1998
REGISTRATION NO. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HONDO OIL & GAS COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 95-1998768
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10375 RICHMOND AVENUE
SUITE 900
HOUSTON, TEXAS 77042
(713) 954-4600
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
JOHN J. HOEY
PRESIDENT
HONDO OIL & GAS COMPANY
10375 RICHMOND AVENUE, SUITE 900
HOUSTON, TEXAS 77042
(713) 954-4600
WITH A COPY TO:
RICHARD A. BOEHMER, ESQ.
O'MELVENY & MYERS LLP
400 SOUTH HOPE STREET
LOS ANGELES, CALIFORNIA 90071
(213) 669-6643
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the
public: FROM TIME TO TIME AFTER THIS REGISTRATION STATEMENT IS
DECLARED EFFECTIVE BY THE SECURITIES AND EXCHANGE COMMISSION.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box /__/.
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following box. /_X_/
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier registration statement for the same
offering. /__/
__________________
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. /__/
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. /__/
<TABLE>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Proposed Proposed
maximum maximum
Title of each class Amount offering aggregate Amount of
of securities to be price offering registration
to be registered registered per Share<1> price fee
Common Stock, $1.00
par value. . . . . . . 208,656 $6.91 $1,441,813 $426
<FN>
<1> Estimated solely for the purpose of calculating the
registration fee on the basis of the high and low price on the
American Stock Exchange on January 5, 1998.
</FN>
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL
THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8 OF THE SECURITIES ACT OF
1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8, MAY
DETERMINE.
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 7, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR
TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR
SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER
THE SECURITIES LAW OF ANY SUCH STATE.
PROSPECTUS
HONDO OIL & GAS COMPANY
208,656 SHARES
COMMON STOCK
($1.00 PAR VALUE)
The 208,656 shares (the "Shares") of the Common Stock, par value
$1.00 per share, of Hondo Oil & Gas Company (the "Company") offered
hereby are being offered by Phillips Petroleum Company (the
"Selling Stockholder"). The Company will not receive any proceeds
from this offering. See "Selling Stockholder" below.
SEE "RISK FACTORS" COMMENCING ON PAGE 4 HEREOF FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY THE
PROSPECTIVE INVESTOR.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The Shares may be sold from time to time in one or more
transactions on the American Stock Exchange, in the over-the-
counter market, in negotiated transactions or a combination of such
methods of sale, or otherwise, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or
at negotiated prices including (a) through ordinary brokerage
transactions in which the broker solicits purchases, (b) sales to
one or more brokers or dealers as principal, and the resale by such
brokers or dealers for their account pursuant to this Prospectus,
including resales to other brokers and dealers, (c) block trades in
which the broker or dealer so engaged will attempt to sell the
Shares as agent but may position and resell a portion of the block
as principal in order to facilitate the transaction or (d)
negotiated transactions with purchasers with or without a broker or
dealer. On January 6, 1998, the last reported sales price of the
Common Stock of the Company on the American Stock Exchange was
$7.00 per share.
The date of this Prospectus is _____________, 1998.
<PAGE>
TABLE OF CONTENTS
Page
Available Information . . . . . . . . . . . . . . . . . . 3
Documents Incorporated by Reference . . . . . . . . . . . 3
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . 4
The Company . . . . . . . . . . . . . . . . . . . . . . . 5
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 6
Selling Stockholder . . . . . . . . . . . . . . . . . . . 6
Plan of Distribution. . . . . . . . . . . . . . . . . . . 6
Experts . . . . . . . . . . . . . . . . . . . . . . . . . 6
Legal Matters . . . . . . . . . . . . . . . . . . . . . . 6
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN
THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY,
ANY SECURITIES OTHER THAN THE SHARES OR AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, SHARES IN ANY JURISDICTION IN
WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER OR SOLICITATION WOULD
BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO ITS DATE.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements, information statements
and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the following Regional Offices of the Commission: Seven World
Trade Center, New York, New York 10048 and Citicorp Center, Suite
1400, 500 West Madison Street, Chicago, Illinois 60661. Copies of
such material can be obtained at prescribed rates from the Public
Reference Section of the Commission, at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Common Stock is listed on the American
Stock Exchange; reports, proxy statements, information statements
and other information filed by the Company with the American Stock
Exchange can be inspected at the offices of the American Stock
Exchange at 86 Trinity Place, New York, New York 10006. The
Commission maintains a website that contains reports, proxy
statements, information statements and other information filed
electronically with the Commission at http:www.sec.gov.
This Prospectus does not contain all the information set forth
in the Registration Statement (No. 333-________) on Form S-3 (the
"Registration Statement") of which this Prospectus is a part,
including exhibits thereto, which has been filed with the
Commission in Washington, D.C. Copies of the Registration
Statement and the exhibits thereto may be obtained, upon payment of
the fee prescribed by the Commission, or may be examined without
charge, at the office of the Commission.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1997 (the "1997 Form 10-K") as filed by the
Company (File No. 1-8979) with the Commission pursuant to the
Exchange Act is incorporated in this Prospectus by reference .
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to
termination of this offering, shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the
date of filing of such document. Any statement contained in a
document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for the
purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which
also is incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS
DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF
ANY AND ALL DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS
(NOT INCLUDING EXHIBITS UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE). REQUESTS FOR SUCH INFORMATION SHOULD
BE DIRECTED TO THE SECRETARY OF HONDO OIL & GAS COMPANY,
10375 RICHMOND AVENUE, SUITE 900, HOUSTON, TEXAS 77042,
TELEPHONE: (713) 954-4600.
<PAGE>
RISK FACTORS
The following factors should be considered carefully by
prospective investors in the Shares offered hereby.
Substantial Reliance on Single Investment. The Company's
success currently is dependent on its investment in the Opon
project, a gas and oil exploration concession in Colombia, South
America.
Role of Ecopetrol. As described in the Company's 1997 Form
10-K, Ecopetrol is a quasi-governmental corporate organization
wholly owned by the Colombian government, a party to the contract
with respect to the Opon project and the purchaser of natural gas
and liquid hydrocarbons under contracts for the sale of production
from the Opon field. At present, the price of natural gas is set
by law enacted by the legislature of Colombia in 1983. The
regulated price of natural gas could be changed in the future by
governmental action. The participation of Ecopetrol, a government-
owned company, in the Opon project as a producer and as a
purchaser, and the power of the government of Colombia to set the
price of natural gas creates the potential for a conflict of
interest in Ecopetrol and/or the government. If such a conflict of
interest materializes, the economic value of the Company's interest
in the Opon project could be diminished.
Marketing of Natural Gas. The Company must secure additional
markets and sales contracts for natural gas in Colombia in order to
increase production and cash flow from the Opon project. This will
depend on the continued development of gas markets and an
infrastructure for the delivery of natural gas in Colombia. Also,
other producers of natural gas in Colombia will compete for the
natural gas market and for access to limited pipeline
transportation facilities.
Foreign Operations. The Company's operations in Colombia are
subject to political risks inherent in all foreign operations,
including: (i) loss of revenue, property and equipment as a result
of unforeseen events such as expropriation, nationalization, war
and insurrection, (ii) risks of increases in taxes and governmental
royalties, (iii) renegotiation of contracts with governmental
entities, and (iv) changes in laws and policies governing
operations of foreign-based companies in Colombia. Guerrilla
activity in Colombia has disrupted the operation of oil and gas
projects, including those at the Opon project. Security in the
area has been improved and the associate parties have taken steps
to enhance relations with the local population through a community
relations program. The government continues its efforts through
negotiation and legislation to reduce the problems and effects of
insurgent groups, including regulations containing sanctions such
as impairment or loss of contract rights on companies and
contractors if found to be giving aid to such groups.
Colombia is among several nations whose progress in stemming
the production and transit of illegal drugs is subject to annual
certification by the President of the United States. In February
1997, the President of the United States announced that Colombia
again would neither be certified nor granted a national interest
waiver. The consequences of the failure to receive certification
generally include the following: (i) all bilateral aid, except
anti-narcotics and humanitarian aid, has been or will be suspended;
(ii) the Export-Import Bank of the United States and the Overseas
Private Investment Corporation will not approve financing for new
projects in Colombia; (iii) U.S. representatives at multilateral
lending institutions will be required to vote against all loan
requests from Colombia, although such votes will not constitute
vetoes; and (iv) the President of the United States and Congress
retain the right to apply future trade sanctions. Each of these
consequences of the failure to receive such certification could
result in adverse economic consequences in Colombia and could
further heighten the political and economic risks associated with
the Company's operations in Colombia.
Risks of Oil and Gas Exploration. Inherent to the oil and gas
industry is the risk that future wells will not find hydrocarbons
where information from prior wells and engineering and geological
data indicate hydrocarbons should be found. Further, existing
wells can deplete faster than anticipated, potentially causing
revisions to reserve estimates and increasing costs due to
replacement wells. Also, because of the limited number of wells in
the Opon project area, the impact of the loss of a single well
would materially affect the Company's production capacity.
Operations at the Opon project area are subject to the operating
risks normally associated with exploration for, and production of,
oil and gas, including blowouts, cratering, and fires, each of
which could result in damage to, or destruction of, the oil and gas
wells, formations or production facilities or properties. In
addition, there are greater than normal mechanical drilling risks
at the Opon project area associated with high pressures in the La
Paz and other formations. These pressures may: cause collapse of
the well bore, impede the drill string while drilling, or cause
difficulty in completing a well with casing and cement.
Laws and Regulations. The Company may be adversely affected
by new laws or regulations in the United States or Colombia
regarding its operations and/or environmental compliance, or by
existing laws and regulations. For additional information, see
Other Factors Affecting the Company's Business in Item 1, Business
of the Company's 1997 Form 10-K.
Limited Capital. At September 30, 1997, the Company had a
deficiency in net assets of $93.2 million. The Company's principal
asset, its investment in the Opon project, will require additional
capital for exploitation. The Company has been unable to secure
financing from sources other than its principal shareholders. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources" in the
Company's 1997 Form 10-K.
Losses from Operations. The Company experienced losses of
$11,906,000, $12,657,000 and $12,388,000 for the years ended
September 30, 1995, 1996 and 1997, respectively. The Company
anticipates continued losses through fiscal 1998.
Continuation of American Stock Exchange Listing. Because of
continuing losses and decreases in shareholders' equity, the
Company does not fully meet all of the guidelines of the American
Stock Exchange for continued listing of its shares. For additional
information, see "Item 5, Market For Registrant's Equity and
Related Shareholder Matters" in the Company's 1997 Form 10-K.
Management has kept the Exchange fully informed regarding the
Company's present status and future plans. Although the Company
does not or may not meet all of the guidelines, to date, the
American Stock Exchange has chosen to allow the Company's shares to
remain listed. However, no assurances can be given that the
Company's shares will remain listed on the Exchange in the future.
Effect on Common Stock Price. Sales or potential sales of
other shares registered by the Company for the account of The Hondo
Company, and Lonrho Plc as pledgee, and for the account of Lonrho
Plc may have an adverse effect on the market price for the
Company's Common Stock. On February 10, 1995, Amendment No. 2 to
a registration statement on Form S-3 became effective registering
for sale from time to time by The Hondo Company and Lonrho Plc as
pledgee 3,609,200 shares of the Company's Common Stock. On May 22,
1995 and November 15, 1995, registration statements on Form S-3
became effective registering for sale from time to time by Lonrho
Plc of 189,080 shares and 121,372 shares, respectively, of the
Company's Common Stock. Each of these registration statements
remain effective. In a Schedule 13D amendment filed October 15,
1997 by Lonrho Plc and its affiliates, the filing parties said that
Lonrho Plc had retained Morgan Stanley & Co. Incorporated to assess
and implement strategic alternatives with respect to Lonrho's
direct and indirect investment in the Company. Lonrho Plc said
such strategic alternatives could include, without limitation, a
possible recapitalization of the Company or a sale or business
combination involving the Company or Lonrho's direct and indirect
equity interest in the Company (including the sale or assumption of
the debt obligations of the Company to affiliates of Lonrho). The
Company cannot predict what effect sales of such shares under the
registration statements or as a result of the matters described in
the October 1997 amendment to the Schedule 13D may have on the
market price of the Common Stock.
THE COMPANY
The Company, a Delaware corporation organized in 1958, is an
independent oil and gas company presently focusing on international
oil and gas exploration and development. The Company's principal
asset is an interest in the Opon project, an exploration concession
in Colombia. For a more detailed description of the business of
the Company, including audited and unaudited financial information,
see the 1997 Form 10-K and other documents referred to in
"Documents Incorporated by Reference." The Company's principal
executive offices are located at 10375 Richmond Avenue, Suite 900,
Houston, Texas 77042, telephone: (713) 954-4600.
USE OF PROCEEDS
The Company will not receive any of the proceeds from this
offering.
SELLING STOCKHOLDER
The Shares are being offered for the account of Phillips
Petroleum Company, Bartlesville, Oklahoma 74004. The Shares
constitute shares of Common Stock of the Company acquired by the
Selling Stockholder, and shares of Common Stock of the Company
issuable upon exercise of a Warrant acquired by the Selling
Stockholder, pursuant to a Stock Purchase Agreement, dated as of
December 23, 1997, such acquisition being in satisfaction of a debt
owed by the Company to the Selling Stockholder. The Selling
Stockholder does not beneficially own any other shares of the
Common Stock of the Company.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling
Stockholder. The Selling Stockholder has informed the Company that
Shares sold under this Prospectus may be sold on the American Stock
Exchange, in the over-the-counter market, in negotiated
transactions, or a combination of such methods of sale, or
otherwise, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated
prices by one or more of the following methods: (a) through
ordinary brokerage transactions in which the broker solicits
purchases, (b) sales to one or more brokers or dealers as
principal, and the resale by such brokers or dealers for their
account pursuant to this Prospectus, including resales to other
brokers and dealers, (c) block trades in which the broker or dealer
so engaged will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal in order to
facilitate the transaction or (d) negotiated transactions with
purchasers with or without a broker or dealer. In connection with
any sales, any broker or dealer participating in such sales may be
deemed an "underwriter" within the meaning of the Securities Act of
1933, as amended, and any commissions, discounts or concessions
received by a broker or dealer (which may be in excess of customary
commissions) and any gain realized by such broker or dealer on the
sale of Shares may be deemed "underwriting compensation." Any such
commissions, discounts or concessions will be paid or borne by the
Selling Stockholder and not the Company.
EXPERTS
The consolidated financial statements of the Company appearing
in the Company's Annual Report on Form 10-K for the year ended
September 30, 1997, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
LEGAL MATTERS
The validity of the Shares is being passed upon for the
Company by C.B. McDaniel, an employee of the Company. Mr. McDaniel
holds options to acquire 60,000 shares of the Common Stock of the
Company at exercise prices ranging from $7.50 to $14.625 per share.
At December 31, 1997, options to acquire 55,000 of such shares were
exercisable.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are the actual and estimated expenses incurred
in connection with the registration and sale of the Shares.
Item Amount
SEC registration fee. . . . . . . . . . . . . . . . . .$ 426.00
Listing fee, American Stock Exchange. . . . . . . . . . 4,173.12
Legal fees and expenses . . . . . . . . . . . . . . . . 5,000.00
Accountants' fees and expenses. . . . . . . . . . . . . 5,000.00
Miscellaneous . . . . . . . . . . . . . . . . . . . . . ___100.88_
Total . . . . . . . . . . . . . . . . . . . . . . .$14,700.00
____________________
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits a
Delaware corporation to indemnify its officers or directors under
certain circumstances. That statute provides that, in actions in
which the corporation is not a party, the corporation may indemnify
its officers and directors for losses incurred by them if the
officer or director acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. In actions in which the corporation is a party, the
statute provides the same standard but prohibits indemnification if
the officer or director is adjudged liable to the corporation,
unless the Delaware Court of Chancery or the court in which the
suit or action is brought determines that, despite the adjudication
of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity. The statute
further permits a corporation to purchase and maintain insurance on
behalf of its officers or directors against any liability asserted
against him and incurred by him in such capacity or arising out of
his status as such, whether or not the corporation would have the
power to indemnify him against such liability.
The Company's Certificate of Incorporation does not restrict
the indemnification of officers or directors. The Company's Bylaws
provide for the indemnification of the Company's officers and
directors to the fullest extent permitted under Delaware law
against all costs, charges, expenses, liabilities and losses
reasonably incurred or suffered by such person in connection with
any action, suit or proceeding by reason of the fact that they are
or were officers or directors of the Company. The Company's Bylaws
permit the Company to maintain insurance to protect any officer or
director of the Company against any expense, liability or loss,
whether or not the Company would have the power to indemnify such
person against such expense, liability or loss under Delaware law.
The Company's Bylaws further permit the Company to enter into
agreements with any officer or director providing for
indemnification to the fullest extent permitted by Delaware law.
The Company has directors' and officers' liability insurance
policies presently in force insuring directors and officers of the
Company and its subsidiaries.
ITEM 16. EXHIBITS.
Exhibits required by Item 601 of Regulation S-K are set forth
in the Exhibit Index commencing on page II-4.
ITEM 17. UNDERTAKINGS.
The Company hereby undertakes:
(a) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 (the "Securities Act") may be permitted
to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(b) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (b)(i) and (b)(ii) of this
section do not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
Company pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the registration statement.
(c) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(d) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(e) That, for purposes of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of
Houston, State of Texas, on January 7, 1998.
HONDO OIL & GAS COMPANY
By: /s/ JOHN J. HOEY
Name: John J. Hoey
Title: President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated. Each person
whose signature appears below hereby authorizes John J. Hoey and
Stanton J. Urquhart, or any of them, as attorney-in-fact, with full
power of substitution, to sign on his behalf, individually and in
each capacity stated below, and to file any amendments, including
post-effective amendments or supplements, to this Registration
Statement, and to sign any registration statement for the same
offering covered by this Registration Statement that is to be
effective upon filing pursuant to Rule 462(b) promulgated under the
Securities Act of 1933, and any post-effective amendments thereto.
<TABLE>
<S> <C> <C>
Signature Title Date
/s/ JOHN J. HOEY President, Chief Executive January 7, 1998
JOHN J. HOEY Officer and Director
/s/ NICHOLAS J. MORRELL Director January 7, 1998
NICHOLAS J. MORRELL
/s/ DOUGLAS G. McNAIR
DOUGLAS G. McNAIR Director January 7, 1998
/s/ JOHN F. PRICE Director January 7, 1998
JOHN F. PRICE
/s/ ROBERT K. STEER Director January 7, 1998
ROBERT K. STEER
/s/ R. E. WHITTEN Director January 7, 1998
R. E. WHITTEN
/s/ STANTON J. URQUHART Vice President (Principal January 7, 1998
STANTON J. URQUHART Financial and Principal
Accounting Officer)
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Subject
4.1 Form of Warrant by the Company in favor of Phillips
Petroleum Company.
*4.2 Documents relating to the $1 million principal amount of
California Pollution Control Authority, 7-1/2% Industrial
Development Revenue Bonds (Newhall Refining Co., Inc.
Project) including Installment Sale Agreement and
Indenture of Trust.
*4.3 Documents relating to the $5 million principal amount of
California Pollution Control Financing Authority
Pollution Control Revenue Bonds (Newhall Refining Co.,
Inc. Project), including Pollution Control Facilities
Lease Agreement, Indenture, U.S. Small Business
Administration Pollution Control Facility Payment
Guaranty and Reimbursement Agreement.
5 Opinion of C.B. McDaniel, Esq.
23.1 Consent of Ernst & Young LLP.
23.2 The consent of C.B. McDaniel, Esq. appears in Exhibit 5.
24 Powers of Attorney appears on page II-3.
_________________________
* These exhibits, which were previously incorporated by reference
to the Company's reports which have now been on file with the
Commission for more than 5 years, are not filed with this
Registration Statement. The Company agrees to furnish these
documents to the Commission upon request.
<PAGE>
EXHIBIT 4.1
WARRANT TO PURCHASE COMMON STOCK VOID AFTER 5:00 P.M.,
HOUSTON, TEXAS TIME, ON THE EXPIRATION DATE
(AS DEFINED BELOW)
HONDO OIL & GAS COMPANY
No. 1 29,808 Warrants
This certifies that, for value received, Phillips Petroleum
Company (the "Holder"), is entitled to purchase from Hondo Oil &
Gas Company, a Delaware corporation (the "Company"), until 5:00
P.M., Houston, Texas time, on the earlier of (i) December 31,
1999, and (ii) the date upon which the Holder no longer is the
registered owner of any of the 178,848 shares of Common Stock, par
value $1.00 per share (the "Common Stock"), of the Company
evidenced by Certificate No. ____ (or any certificate or
certificates registered in the name of Holder and representing all
or some of such shares of Common Stock) (the "Expiration Date"), at
the purchase price of $1.00 per share (the "Exercise Price"), a
number of shares of Common Stock that is equal to the number of
Warrants set forth above. The number of shares purchasable upon
exercise of this Warrant and the Exercise Price per share are
subject to adjustment from time to time as set forth below.
Section 1. Exercise of Warrants. The Warrants evidenced
hereby may be exercised in whole or in part at any time after the
date the average of the Trading Price (as defined in Section 3(d)
hereof) of the Common Stock for 20 consecutive Trading Days (as
defined in Section 3(d) hereof) is less than $5.415 per share and
prior to 5:00 P.M. Houston, Texas time, on the Expiration Date.
The Warrants evidenced hereby may be exercised by presentation of
this Warrant with the Purchase Form at the end of this Warrant duly
executed and simultaneous payment of the Exercise Price at the
office of the Company in the City of Houston, Texas. Payment of
such price shall be made at the option of the Holder hereof by
certified or cashier's check. No fractional shares of Common Stock
will be issued upon the exercise of rights to purchase hereunder,
but the Company shall pay the cash value of any such fraction upon
the exercise of this Warrant.
Upon any partial exercise of this Warrant Certificate, there
shall be countersigned and issued to the Holder hereof a new
Warrant in respect of the shares as to which this Warrant shall not
have been exercised.
Section 2. Transferability and Exchange.
(a) This Warrant shall be transferable only in the books of
the Company maintained at the executive offices of the Company
upon delivery thereof duly endorsed by the Holder or by its duly
authorized attorney or legal representative, or accompanied by
proper evidence of succession, assignment or authority to
transfer, which endorsement shall be guaranteed by a bank or
trust company located in the United States or a broker or dealer
that is a member of a national securities exchange. In all
cases of transfer by an attorney, the original power of
attorney, duly approved, or an official copy thereof, duly
certified, shall be deposited and remain with the Company. In
case of transfer by executors, administrators, guardians or
other legal representatives, duly authenticated evidence of
their authority shall be produced, and may be required to be
deposited and remain with the Company in its discretion. Upon
any registration of transfer, the Company shall countersign and
deliver a new Warrant to the person entitled thereto.
(b) This Warrant may be exchanged for another Warrant or
Warrants entitling the Holder thereof to purchase a like
aggregate number of shares as this Warrant then entitles such
Holder to purchase. Any Holder desiring to exchange this
Warrant shall make such request in writing delivered to the
Company, and shall surrender, properly endorsed in the manner
described in subsection (a) above, this Warrant. Thereupon, the
Company shall countersign and deliver to the person entitled
thereto a new Warrant or Warrants, as the case may be, as so
requested.
Section 3. Adjustments. From and after the date hereof, the
number and kind of securities purchasable upon the exercise of this
Warrant and the Exercise Price shall be subject to adjustment as
follows:
(a) Stock Dividends, Splits, etc. In case the Company
shall at any time after the date hereof (i) pay a dividend or
make a distribution on its Common Stock which is paid or made
(A) in Common Stock or other shares of the Company's capital
stock or (B) in rights to purchase Common Stock or other
securities of the Company if such rights are not initially
separable from the Common Stock at the time of issuance, (ii)
subdivide its outstanding Common Stock into a greater number of
shares of Common Stock, (iii) combine its outstanding shares
into a smaller number of shares of Common Stock or (iv) issue
by reclassification of its Common Stock other securities of the
Company, then, in any such event the number of shares of Common
Stock purchasable upon exercise of this Warrant immediately
prior thereto shall be adjusted so that the Holder of this
Warrant shall be entitled to receive upon exercise of this
Warrant the kind and number of shares of the Company and rights
to purchase Common Stock or other securities of the Company (or,
in the event of the redemption of any such rights, any cash paid
in respect of such redemption) that such Holder would have owned
or have been entitled to receive after the happening of any of
the events described above had this Warrant been exercised
immediately prior to the happening of such event or any record
date with respect thereto. An adjustment made pursuant to this
paragraph (a) shall become effective immediately after the
opening of business on the next business day following the
record date in the case of dividends or other distributions and
shall become effective immediately after the opening of business
on the next business day following the effective date in the
case of a subdivision or combination.
(b) Distribution of Rights or Warrants. In case the Company
shall at any time after the date hereof issue rights or warrants
to the holders of Common Stock as such entitling them (for a
period expiring within 60 days after the record date for the
determination of stockholders entitled to receive the same) to
subscribe for or purchase Common Stock at a price per share less
than the current market price per share (as defined in paragraph
(d) below) on such record date, then, in each such case the
number of shares of Common Stock thereafter purchasable upon the
exercise of this Warrant shall be determined by multiplying the
number of shares of Common Stock theretofore purchasable upon
exercise of this Warrant by a fraction, of which the numerator
shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights or warrants, plus the number of
additional shares of Common Stock offered for subscription or
purchase, and of which the denominator shall be the number of
shares of Common Stock outstanding on the date of issuance of
such rights or warrants plus the number of shares of Common
Stock that the aggregate offering price of the total number of
shares of Common Stock so offered would purchase at such current
market price. For the purposes of this paragraph (b), the
issuance of rights or warrants to subscribe for or purchase
securities convertible into Common Stock shall be deemed to be
the issuance of rights or warrants to purchase the Common Stock
into which such securities are convertible at an aggregate
offering price equal to the aggregate offering price of such
securities plus the minimum aggregate amount (if any) payable
upon conversion of such securities into Common Stock. Any
adjustment pursuant to this paragraph (b) shall be made whenever
any such rights or warrants are issued, but shall also become
effective retroactively, if this Warrant is exercised between
the record date for the determination of stockholders entitled
to receive such rights or warrants and the date such rights or
warrants are issued. For purposes of this paragraph (b) and
paragraph (c) below, the granting of the right to purchase
shares of Common Stock (whether from treasury shares or
otherwise) pursuant to any dividend or interest reinvestment
plan and/or Common Stock purchase plan providing for the
reinvestment of dividends or interest payable on securities of
the Company and/or the investment of periodic optional payments,
in any such case at a price per share of not less than 85% of
the current market price per share (determined as provided in
such plans) of the Common Stock, shall not be deemed to
constitute an issue of rights or warrants by the Company within
the meaning of this paragraph (b) or paragraph (c) below.
(c) Distributions of Assets. In case the Company shall at
any time after the date hereof distribute to all holders of its
Common Stock evidences of indebtedness of the Company (or any
other entity) or assets of the Company (or any other entity)
(excluding cash dividends or distributions out of retained
earnings) or rights or warrants to subscribe for securities of
the Company (excluding those referred to in paragraph (a) and
paragraph (b) above), then in each case the Exercise Price shall
be adjusted to a price determined by multiplying the Exercise
Price in effect immediately prior to such distribution by a
fraction, of which the numerator shall be the then current
market price per share of Common Stock (as defined in paragraph
(d) below) on the record date for determination of stockholders
entitled to receive such distribution, less the then fair value
(as reasonably determined in good faith by the Board of
Directors of the Company, such determination being conclusive)
of the portion of the assets or evidences of indebtedness so
distributed or of such subscription rights or warrants which are
applicable to one share of Common Stock, and of which the
denominator shall be such market price per share of Common
Stock; provided, however, that if the then current market price
per share of Common Stock on the record date for determination
of stockholders entitled to receive such distribution is less
than the then fair value of the portion of the assets or
evidences of indebtedness so distributed or of such subscription
rights or warrants which are applicable to one share of Common
Stock, the foregoing adjustment of the Exercise Price shall not
be made and in lieu thereof the number of shares of Common Stock
purchasable upon exercise of this Warrant immediately prior to
such distribution shall be adjusted so that the Holder of this
Warrant shall be entitled to receive upon exercise of this
Warrant the kind and number of assets, evidences of
indebtedness, subscription rights and warrants (or, in the event
of the redemption of any such evidences of indebtedness,
subscription rights and warrants, any cash paid in respect of
such redemption) that such Holder would have owned or have been
entitled to receive after the happening of such distribution had
this Warrant been exercised immediately prior to the record date
for such distribution. Such adjustment shall be made whenever
any such distribution is made, and shall become effective on the
date of distribution retroactive to the record date for the
determination of stockholders entitled to receive such
distribution. Upon each adjustment of the Exercise Price
pursuant to this paragraph (c), each Warrant outstanding
immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of shares of Common Stock
(calculated to the nearest hundredth) obtained by (i)
multiplying the number of shares of Common Stock purchasable
upon exercise of this Warrant immediately prior to such
adjustment of the number of shares of Common Stock by the
Exercise Price in effect immediately prior to such adjustment
of the Exercise Price and (B) dividing the product so obtained
by the Exercise Price in effect immediately after such
adjustment to the Exercise Price.
(d) Computation of Market Price. For the purpose of any
computation under paragraphs (b) and (c) of this Section 3, the
current market price per share of Common Stock at any date shall
be deemed to be the average of the daily Trading Price per share
for the 30 consecutive Trading Days commencing 45 Trading Days
before the date in question.
"Trading Price" on any specified date shall mean (i) if
the Common Stock is listed or admitted to trade on a securities
exchange, the closing price of the Common Stock, regular way,
on such day, on the principal securities exchange on which the
stock is so listed or admitted to trade, or, if there is no such
reported sale on such date, the average closing bid and asked
prices on such day, or (if none) then the closing price of the
stock or (if none) such average, as reported on the next
preceding date on which there was such reported activity in such
shares (such date or earlier date being hereinafter referred to
as the "applicable trading date"); (ii) if the Common Stock is
not listed or admitted to trade on a securities exchange, the
last reported sales price for the Common Stock or (if none) the
average of the last reported bid and asked prices on the
applicable trading date, as reported by the principal reputable
quotation system available to the Board of Directors; (iii) if
the Common Stock is not listed or admitted to trade on a
securities exchange and no such reported closing sale price or
closing bid and asked prices are available, the average of the
reported high bid and low asked price for the stock on the
applicable trading date, as reported by a reputable quotation
source designated by the Board of Directors; or (iv) if the
Common Stock is not listed or admitted to trade on a securities
exchange, trading is not so reported, and bid and asked prices
are not available on a reasonably current basis, the value as
established by the Board of Directors in good faith at such
time.
The term "Trading Day" shall mean a Monday, Tuesday,
Wednesday, Thursday or Friday on which banking institutions in
the City of New York are not authorized or obligated by law or
executive order to close or, if the Common Stock is listed or
admitted to trading on a national securities exchange, a day on
which the principal national securities exchange on which the
Common Stock is listed or admitted to trading is open for the
transaction of business.
(e) Minimum Adjustment. No adjustment in the number of
shares of Common Stock purchasable hereunder shall be required
unless such adjustment would require an increase or decrease of
at least one per cent (1%) in the number of shares of Common
Stock purchasable upon the exercise of this Warrant; provided,
however, that any adjustments which by reason of this paragraph
(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
(f) Exercise Price Adjustment. Whenever the number of shares
of Common Stock purchasable upon the exercise of this Warrant
is adjusted, as herein provided, the Exercise Price per share
of Common Stock payable upon exercise of this Warrant shall be
adjusted (to the nearest cent) by multiplying such Exercise
Price immediately prior to such adjustment by a fraction, of
which the numerator shall be the number of shares of Common
Stock purchasable upon the exercise of this Warrant immediately
prior to such adjustment, and of which the denominator shall be
the number of shares of Common Stock so purchasable immediately
thereafter; provided, however, that if, as a result of an
adjustment of the shares of Common Stock purchasable upon the
exercise of this Warrant, the Holder of this Warrant shall be
entitled upon exercise to receive shares of two or more classes
of capital stock or Common Stock of the Company and other
capital stock of the Company, the Board of Directors shall
determine in good faith the allocation of the Exercise Price
between or among shares of such classes of capital stock or
Common Stock and other capital stock. Notwithstanding anything
in this Warrant to the contrary, if the Exercise Price in effect
on the date of exercise of this Warrant is less than the par
value of a share of Common Stock, the price per share at which
shares of Common Stock may be purchased upon the exercise of
this Warrant shall be the par value of a share of Common Stock.
(g) Notice of Adjustment. Whenever the number of shares of
Common Stock purchasable upon the exercise of this Warrant or
the Exercise Price is adjusted, as herein provided, the Company
shall promptly mail by first class mail, postage prepaid, to the
Holder notice of such adjustment or adjustments and a
certificate of a firm of independent public accountants selected
by the Board of Directors of the Company (who may be the regular
accountants employed by the Company) setting forth (i) the
number of shares of Common Stock purchasable upon the exercise
of this Warrant and the Exercise Price after such adjustment,
(ii) a brief statement of the facts requiring such adjustment
and (iii) the computation by which such adjustment was made.
(h) Definition of Common Stock. For the purpose of this
Section 3, the term "Common Stock" shall mean (i) the class of
stock designated as the Common Stock of the Company at the date
of this Warrant or (ii) any other class of stock resulting from
successive changes or reclassifications of such shares
consisting solely of changes in par value, or from par value to
no par value or from no par value to par value. In the event
that at any time, as a result of an adjustment made pursuant to
paragraph (a) above, the Holder shall become entitled to
purchase any securities of the Company other than Common Stock,
thereafter the number of such other securities so purchasable
upon exercise of this Warrant and the Exercise Price of such
securities shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares contained in this Section
3 and the provisions of Sections 4 and 5, inclusive, with
respect to such shares, shall apply on like terms to any such
other securities.
(i) Readjustment of Exercise Price and Number of Shares. If,
upon the expiration of any rights or warrants with respect to
which there shall have been an adjustment of the number of
shares of Common Stock purchasable upon the exercise of this
Warrant or of the Exercise Price, any of such rights or warrants
shall not have been exercised, the Exercise Price and the number
of shares of Common Stock purchasable upon the exercise of this
Warrant shall, upon such expiration, be readjusted and shall
thereafter be such as it would have been had it been originally
adjusted (or had the original adjustment not been required, as
the case may be) on the basis of (A) the only shares of Common
Stock so issued were the shares of Common Stock, if any actually
issued or sold upon the exercise of such rights or warrants and
(B) such shares of Common Stock, if any, were issued or sold for
the consideration actually received by the Company upon such
exercise plus the consideration, if any, actually received by
the Company for the issuance, sale or grant of all such rights
or warrants whether or not exercised; provided, that no such
readjustment shall have the effect of increasing the Exercise
Price or reducing the number of shares of Common Stock
purchasable upon exercise of this Warrant by an amount in excess
of the amount of the adjustment initially made in respect of the
issuance, sale or grant of such rights or warrants.
Section 4. No Adjustment for Dividends. Except as provided
in Section 3, no adjustment in respect of any dividends shall be
made during the term of this Warrant or upon the exercise of this
Warrant.
Section 5. Adjustment of Exercise Price upon Merger,
Consolidation, etc. In case the Company shall consolidate or merge
with or into any other corporation (other than a consolidation or
merger in which the Company is the surviving corporation and each
share of Common Stock outstanding immediately prior to such
consolidation or merger is to remain outstanding immediately after
such consolidation or merger) or shall sell or transfer all or
substantially all of its assets to any corporation, the Company or
such successor or purchasing corporation, as the case may be
(collectively, the "acquiring corporation"), shall execute an
agreement that the Holder shall have the right thereafter upon
payment of the Exercise Price in effect immediately prior to such
action to purchase upon exercise of this Warrant the kind and
amount of shares and other securities, cash and other property that
the Holder would have owned or have been entitled to receive after
the happening of such consolidation, merger or sale had this
Warrant been exercised immediately prior to such action, including,
without limitation, any and all distributions in respect thereof
from the date of such action to the date of such exercise (assuming
that the Holder, as a holder of Common Stock prior to such action,
would not have exercised any rights of election as a holder of
Common Stock as to the kind or amount of securities, cash or other
property receivable upon such consolidation, merger or sale;
provided, that if the kind or amount of securities, cash or other
property receivable upon such consolidation, merger or sale is not
the same for each non-electing share of Common Stock, then the kind
and amount of securities, cash or other property receivable shall
be deemed to be the kind and amount so receivable by a plurality of
the non-electing shares). In addition to any adjustments required
by this Section 5, such agreement shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the
adjustments provided for in Sections 3 and 4. The Company shall
not effect any such consolidation, merger or sale unless prior to
or simultaneously with the consummation thereof the acquiring
corporation (if other than the Company) resulting from such
consolidation or merger or the acquiring corporation purchasing
such assets or other appropriate corporation or entity shall
assume, by written instrument executed and delivered to the Holder,
the obligation to deliver to the Holder such shares of stock,
securities or assets as, in accordance with the foregoing
provisions, the Holder may be entitled to receive and the other
obligations of the Company under this Warrant. The provisions of
this Section 5 shall similarly apply to successive consolidations,
mergers, sales or conveyances.
Section 6. Fractional Warrant Shares. The Company shall not
be required to issue fractional shares of Common Stock on the
exercise of this Warrant. If any fraction of a share of Common
Stock would, except for the provisions of this Section 6, be
issuable on the exercise of the Warrant (or specified portion
thereof), the Company shall pay an amount by check equal to the
current market price per share of common stock (as defined in
Section 3(d) above) multiplied by such fraction.
Section 7. No Rights as Stockholder. Nothing contained in
this Warrant shall be construed as conferring upon the Holder the
right to vote or to receive dividends or to consent or to receive
notice as a stockholder in respect of any meeting of shareholders
for the election of directors of the Company or any other matter,
or any rights whatsoever as a stockholder of the Company.
Section 8. Notices. Any notice pursuant to this Warrant by
the Holder to the Company shall be in writing and shall be deemed
to have been duly given if delivered or mailed by certified mail,
return receipt requested, to Hondo Oil & Gas Company, 10375
Richmond Avenue, Suite 900, Houston, Texas 77042 Attention:
Secretary. Any notice pursuant to this Warrant by the Company to
the Holder shall be in writing and shall be deemed to have been
duly given if delivered or mailed by certified mail, return receipt
requested, to the Holder at Phillips Petroleum Company, P.O. Box
1967, Houston, Texas 77251-1967, Attention: J.M. McKee.
Each party hereto may from time to time change the address to
which notices to it are to be delivered or mailed hereunder by
notice in writing to the other party.
Section 9. Applicable Law. This Warrant shall be deemed to
be a contract made under the laws of the State of Texas and for all
purposes shall be construed in accordance with the laws of said
State.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its duly authorized officers and the corporate seal
hereunto affixed.
Dated:
HONDO OIL & GAS COMPANY
By: ___________________________
Title:
ATTEST: _______________________
Title:
<PAGE>
HONDO OIL & GAS COMPANY
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise the
right of purchase represented by the within Warrant for, and to
purchase thereunder, ____ shares of Common Stock, provided for
therein, and requests that certificates for such shares of Common
Stock be issued in the name of:
Name:__________________________________________________
Address:_______________________________________________
Social Security or Taxpayer's
Identification Number:_________________________________
and, if said number of shares of Common Stock shall not be all the
Common Stock purchasable thereunder, that a new Warrant for the
balance remaining of the Common Stock purchasable under the within
Warrant be registered in the name of the undersigned Warrantholder.
Dated: __________________
Signature: _________________________
NOTICE: The above signature must
correspond with the name as
written upon the face of this
Warrant in every particular,
without alteration or
enlargement or any change
whatever, unless this Warrant
has been assigned.
<PAGE>
ASSIGNMENT
(To be signed only upon
assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ______________________________
(Name of Assignee)
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Social Security or other Taxpayer Identification Number of
Assignee)
the within Warrant, hereby irrevocably constituting and appointing
_____________________________________________ Attorney to transfer
said Warrant on the books of the Company, with full power of
substitution in the premises.
DATED: ________________
______________________________
Signature of Registered Holder
Signature Guaranteed:
NOTICE: The signature on this
assignment must correspond
with the name as it appears
upon the face of the within
Warrant in every particular,
without alteration or
enlargement or
any change whatever.
<PAGE>
EXHIBIT 5
[C.B. MCDANIEL LETTERHEAD]
January 7, 1998
Hondo Oil & Gas Company
10375 Richmond Avenue
Suite 900
Houston, Texas 77042
Ladies and Gentlemen:
At your request, I have examined the Registration
Statement on Form S-3 proposed to be filed by Hondo Oil & Gas
Company, a Delaware corporation (the "Company"), in connection with
the registration under the Securities Act of 1933, as amended, of
shares of Common Stock, $1.00 par value, of the Company to be sold
from time to time by Phillips Petroleum Company ("Phillips"). The
shares of Common Stock to be registered include shares to be issued
to Phillips pursuant to a Stock Purchase Agreement, dated as of
December 23, 1997 (the "Stock Purchase Agreement"), between the
Company and Phillips (the "Initial Shares") and shares issuable
upon exercise of a Warrant, a copy of which is included as an
Exhibit to the Registration Statement (the "Warrant"), to be issued
to Phillips by the Company (the "Warrant Shares"). I am familiar
with the proceedings taken by the Company in connection with the
authorization, issuance and sale of the Initial Shares and the
Warrant Shares.
I am of the opinion that the Initial Shares have been duly
authorized by all necessary corporate action on the part of the
Company and, upon issuance of, payment for and delivery of the
Initial Shares in accordance with the Stock Purchase Agreement and
the countersigning of the certificate or certificates representing
the Initial Shares by a duly authorized signatory of the registrar
for the Common Stock of the Company, the Initial Shares will be
validly issued, fully paid and nonassessable. In addition, I am of
the opinion that the Warrant Shares to be issued upon exercise of
the Warrant have been duly authorized by all necessary corporate
action on the part of the Company and, upon issuance of, payment
for and delivery of the Warrant Shares in accordance with the
Warrant and the countersigning of the certificate or certificates
representing the Warrant Shares by a duly authorized signatory of
the registrar of the Common Stock of the Company, the Warrant
Shares will be validly issued, fully paid and nonassessable.
I hereby consent to the use of this opinion as an exhibit to
the Registration Statement and to the reference to me under the
heading "Legal Matters" in the Prospectus constituting part of the
Registration Statement.
Very truly yours,
/s/ C.B. MCDANIEL
C.B. McDaniel
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" in this Registration Statement on Form S-3 and related
Prospectus of Hondo Oil & Gas Company and to the incorporation by
reference therein of our report dated November 21, 1997, except for
Note 5 thereof as to which the date is December 18, 1997, with
respect to the consolidated financial statements and schedule of
Hondo Oil & Gas Company included in its Annual Report (Form 10-K)
for the year ended September 30, 1997, filed with the Securities
and Exchange Commission.
Ernst & Young LLP
Denver, Colorado
January 7, 1998
