As Filed with the Securities and Exchange Commission on August 29, 1997
Registration No.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
PEASE OIL AND GAS COMPANY
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(Exact name of registrant as specified in its charter)
Nevada 87-0285520
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
751 Horizon Court, Suite 203, P.O. Box 60219
Grand Junction, Colorado 81506-8758
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(Address of principal executive offices) (Zip Code)
WILLARD PEASE OIL AND GAS COMPANY
1990 STOCK OPTION PLAN
WILLARD PEASE OIL AND GAS COMPANY
1993 STOCK OPTION PLAN
PEASE OIL AND GAS COMPANY
1994 EMPLOYEE STOCK OPTION PLAN
PEASE OIL AND GAS COMPANY
1996 STOCK OPTION PLAN
(Full title of plan)
Willard H. Pease, Jr.
751 Horizon Court, Suite 203
P.O. Box 60219
Grand Junction, Colorado 81506-8758
(970) 245-5917
(Name, address and telephone number,
including area code, of agent for service)
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With Copies to:
Alan W. Peryam, Esq.
Alan W. Peryam, LLC
1120 Lincoln Street, Suite 200
Denver, Colorado 80203
(303) 866-0900
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Approximate date of commencement of proposed reoffer or resale to the
public: As soon as practicable after filing of this Registration Statement.
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CALCULATION OF REGISTRATION FEE
=============================================================================================================================
Proposed Maximum Proposed Maximum Amount of
Amount to be Offering Price Aggregate Registration
Title of Securities To Be Registered(3) Registered Per Share(3) Offering Price(1) Fee
- -------------------------------------- ------------ -------------- ------------------- ------------
<S> <C> <C> <C> <C>
Common Stock, $0.10 par value,
underlying option(2).................... 856,300 Shares $ 1.58 $ 1,352,954.00 $ 409.97
Common Stock, $0.10 par value,
underlying option(2).................... 43,700 Shares $ 2.891 $ 126,336.70 $ 38.28
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Total registration fee $ 448.25
=============================================================================================================================
</TABLE>
(1) Estimated for purposes of calculating the registration fee pursuant to
Rule 457.
(2) Pursuant to Rule 457(h) of the Securities Act of 1933, as amended (the
"Securities Act"), the number of shares of Common Stock to be
registered is the maximum number of shares issuable herein, except
that any additional shares of Common Stock issuable pursuant to stocks
splits, stock dividends or similar transactions will be deemed
registered by this registration statement.
As of August 26, 1997, there were outstanding options to purchase
856,300 shares of Common Stock pursuant to the Plans, with an average
exercise price of $1.58 per share. As of August 26, 1997, there were
43,700 shares of Common Stock available for grant under the Plans that
are not subject to outstanding Options, with a proposed maximum
offering price equal to the closing bid price for one share of Common
Stock as reported by NASDAQ.
(3) Pursuant to Rules 457(c) and (h) of the Securities Act, the proposed
maximum offering price per share of Common Stock subject to
outstanding options ("Options") issued pursuant to the Registrant's
1990 Stock Option Plan, 1993 Stock Option Plan, 1994 Stock Option Plan
and 1996 Stock Option Plan (together the "Plans") has been calculated
on the basis of the average exercise price of outstanding Options, and
the proposed maximum offering price per share of Common Stock
available for grant under the Plans that are not subject to
outstanding Options has been calculated on the basis of the average of
the high and low prices reported in the Nasdaq Small Cap Market for
August 26, 1997.
(ii)
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PEASE OIL AND GAS COMPANY
REOFFER PROSPECTUS
CROSS REFERENCE SHEET
Location in Prospectus of Information Required by Part I of Form S-3.
Item Heading Caption in Prospectus
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<C> <S> <C>
1. Forepart of the Registration Statement and Out Outside Front Cover Page of Prospectus
side Front Cover of Prospectus
2. Inside Front and Outside Back Cover Pages Available Information; Certain Documents
of Prospectus Incorporated by Reference; Table of Contents;
Back Cover Page
3. Summary Information, Risk Factors Front Cover Page of Prospectus; Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Selling Shareholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Registered Incorporation of Certain Documents by Reference
10. Interest of Named Experts and Counsel Not Applicable
11. Material Changes Not Applicable
12. Incorporation of Certain Information by Incorporation of Certain Documents by Reference
Reference
13. Disclosure of Commission Position on Certain Provisions of the Articles of Incorporation
Indemnification for Securities Act Liabilities and Bylaws
</TABLE>
The following reoffer prospectus is filed as a part of this registration
statement on Form S-8 in accordance with General Instruction C3(a) to Form S-8:
(iii)
<PAGE>
PEASE OIL AND GAS COMPANY
751 Horizon Court, Suite 203
P.O. Box 60219
Grand Junction, Colorado 81506-8758
(970) 245-5917
900,000 Shares of Common Stock
($0.10 Par Value Per Share)
This Prospectus (the "Prospectus") relates to an aggregate of 900,000
shares of Common Stock, $0.10 par value ("Shares"), of Pease Oil and Gas Company
(the "Company"), and is to be used in connection with the reoffer or resale of
Shares issuable to the selling shareholders of the Company listed in the section
entitled "Selling Shareholders" herein (the "Selling Shareholders") upon
exercise of Options issued, or which may be issued, under any of the Company's
following stock option plans (hereafter the "Plans"):
WILLARD PEASE OIL AND GAS COMPANY
1990 STOCK OPTION PLAN
WILLARD PEASE OIL AND GAS COMPANY
1993 STOCK OPTION PLAN
PEASE OIL AND GAS COMPANY
1994 EMPLOYEE STOCK OPTION PLAN
PEASE OIL AND GAS COMPANY
1996 STOCK OPTION PLAN
The Company's Shares of Common Stock trade on the Nasdaq Small-Cap Market
("NASDAQ") under the symbol "WPOG." The last reported sales price of one share
of Common Stock on NASDAQ on August 26, 1997, was $2.81.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The offer and sale of the Shares will be made in accordance with the plan
of distribution described in the Prospectus. See "Plan of Distribution." The
Selling Shareholders reserve the sole right to accept and, together with their
agents from time to time, to reject, in whole or in part, any proposed purchase
of Common Stock to be made directly or through agents. The Company will pay all
expenses of this offering (the "Offering"), other than selling commissions to,
or expenses of, brokers or dealers retained by the Selling Shareholders, which
commissions and expenses will be paid by the Selling Shareholders.
If any agent of any Selling Shareholder or a dealer is involved in the sale
of the Shares in respect of which the Prospectus is being delivered, the net
proceeds to the Selling Shareholders from sale will be the purchase price of
such Shares less such commission in the case of an agent, the purchase price of
such Shares in the case of a dealer, and less, in each case, other attributable
issuance expenses. The aggregate proceeds to the Selling Shareholders from all
the Shares will be the purchase price of Shares sold less the aggregate of
agents' commissions and other expenses of issuance and distribution. See "Plan
of Distribution" for possible indemnification arrangements for the agents and
dealers.
No person has been authorized to give any information or to make any
representation not contained in the Prospectus. If given or made, such
information or representation must not be relied upon as having been authorized
by the Company or the Selling Shareholders. The Prospectus does not constitute
an offer to sell or the solicitation of an offer to buy any securities other
than the Shares offered herein, nor does it constitute an offer to any person in
any jurisdiction in which such offer or solicitation would be unlawful. Neither
the delivery of the Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information contained herein is
correct as of any time subsequent to the date hereof.
The date of this Prospectus is August 29, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance with the Exchange
Act files periodic reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and other
information filed by the Company with the Commission can be inspected and copied
(at prescribed rates) at the Commission's Public Reference Section, Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Regional Offices of the Commission located at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade
Center, 13th Floor, New York, New York 10048. The commission maintains a Web
site at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding the Company. In addition, reports,
proxy statements and other information concerning the Company can be inspected
and copied at the office of the National Association of Securities Dealers,
Inc., 9513 Key West Avenue, Rockville, Maryland 20850-3389.
The Company has filed with the Commission a registration statement (the
"Registration Statement") under the Securities Act of 1933 (the "Securities
Act") with respect to the Shares offered hereby. This Prospectus, which is part
of the Registration Statement, does not contain all the information set forth in
the Registration Statement and the exhibits and schedules thereto, certain items
of which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the Shares,
reference is hereby made to the Registration Statement and such exhibits and
schedules.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference.
(a) Annual Report on Form 10-KSB for the year ended December 31, 1996 (the
"Annual Report on Form 10-KSB");
(b) The Company's Proxy Statement, dated April 30, 1997 for the Annual
Meeting of Shareholders of the Company held May 31, 1997 (the "Proxy
Statement");
(c) Quarterly Report on Form 10-QSB for the quarter ended March 31, 1997
(the "First Quarter Report");
(d) Quarterly Report on Form 10-QSB for the quarter ended June 30, 1997
(the "Second Quarter Report");
(e) Current Report on Form 8-K dated January 10, 1997;
(f) Current Report on Form 8-K dated February 14, 1997;
(g) Current Report on Form 8-K dated March 13, 1997;
(h) Current Report on Form 8-K dated May 31, 1997;
(i) Current Report on Form 8-K dated June 11, 1997;
(j) Current Report on Form 8-K dated June 19, 1997;
(k) Current Report on Form 8-K dated June 27, 1997;
(l) The description of the Company's shares of Common Stock, $0.10 par
value, contained in the Company's Registration Statement No.333-31921
on Form S-3, filed under the Securities Act, and any further amendment
or any report filed under the Exchange Act for the purpose of updating
such description; and
(m) All documents filed after the date of this Prospectus by the Company
pursuant to Sections 13(a) or 15(d) of the Exchange Act.
Any statement in any of items (a) through (l) shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that
information contained in any document referenced in item (m) above modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Copies of any documents or portions of such other documents incorporated in
this Prospectus, not including exhibits to the information that is incorporated
by reference, unless such exhibits are specifically incorporated by reference in
this Prospectus, may be obtained at no charge by any person (including any
beneficial owner) to whom this Prospectus is delivered by a written or oral
request to Patrick J. Duncan, Corporate Secretary, 751 Horizon Court, P.O. Box
60219, Grand Junction, Colorado 81506-8758, telephone (970) 245-5917.
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<PAGE>
PROSPECTUS SUMMARY
This Prospectus and documents incorporated herein by reference contain
certain forward-looking statements that involve substantial risks and
uncertainties. When used in this Prospectus or the documents incorporated herein
by reference, words such as "anticipate," "believe," "intend," "estimate,"
"plans," "expect" and similar expressions as they relate to the Company or its
business or the management of the Company, are intended to identify such
forward-looking statements. The Company's actual results, performances and
achievements could differ materially from the results in, or implied by, these
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed in "Risk Factors."
The following summary is qualified in its entirety by the more detailed
information and financial statements and related notes appearing elsewhere in
this Prospectus or contained in other reports and documents of the Company which
are incorporated by reference in this Prospectus.
The Company
Pease Oil and Gas Company ("Company"), a Nevada corporation, has been
engaged in the oil and gas explora tion, development and production business
since 1972. The Company's operations have been conducted primarily in Colorado,
Nebraska, Utah and Wyoming. In late 1996 and early 1997, the Company acquired
interests in producing and exploratory oil and gas properties in Louisiana and
intends to focus substantial efforts on the Gulf Coast area of the southeastern
United States.
The Company's business strategy is to expand its reserve base and cash flow
primarily through:
o Participating in exploration projects that have opportunities
involving relatively small amounts of capital that could potentially
generate significant rates of return. These projects include areas
with large field potentials in Alabama, southern Louisiana, Texas and
the Gulf of Mexico. Generally, the exploration projects will target
prospects with potential reserves of 10 million barrels of oil or 100
Bcf of natural gas;
o Developing alliances with major oil and gas finders who have been
trained by major oil companies;
o Positioning itself with strategic sources of capital and partners that
can react to opportunities in the oil and gas business when presented;
o Raising significant capital to take advantage of leading edge
technology-driven exploration projects, enhanced 2-D and 3-D seismic
and horizontal drilling;
o Acquiring properties that build upon and enhance the Company's
existing asset base;
o Reinvesting operating cash flows into development drilling and
recompletion activities;
o Implementing the Company's investment strategy to carefully consider,
analyze, and exploit the potential value of the Company's existing
assets to increase the rate of return to its shareholder;
o Continuing the implementation of asset rationalization and operating
efficiencies designed to improve operating margins and lower per unit
operating cost;
o Developing a long term track record regarding stock price performance
and a reasonable rate of return to shareholders.
As of July 1, 1997, the Company had varying ownership interests in 185
gross productive wells (150 net) located in six states. The Company operates 177
of the wells (134 net wells), with the other wells being operated by independent
operators under contracts that are standard in the industry.
The Company's address is 751 Horizon Court, Suite 203, Grand Junction,
Colorado 81506-8718 and its telephone number is (970) 245-5917.
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<PAGE>
RISK FACTORS
Prospective purchasers of shares of Common Stock of the Company should
consider carefully the following factors, in addition to other information
concerning the Company and its business contained in this Prospectus and
documents incorporated herein by reference. The following risk factors are not
considered a definitive list of all risks associated with an investment in
shares of the Company's Common Stock.
Company's Continuing Losses and Financial Condition. As described in the
financial statements contained in the Company's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 1996 and the Second Quarter Report, the
Company has sustained operating losses during each of the last five fiscal years
and for the six months ended June 30, 1997. The Company had net losses of
approximately $1,707,000, $765,000, $1,412,000 and $1,149,000 for the fiscal
years ended December 31, 1994, 1995, 1996 and the six months ended June 30,
1997, respectively, and net losses applicable to common shareholders of
$2,865,000, $2,609,000, $1,614,000 and $1,239,000 for fiscal years 1994, 1995,
1996 and for the six months ended June 30, 1997, respectively. Although the
Company's current assets and the estimated present value of the Company's oil
and gas reserves exceeded the Company's liabilities as of June 30, 1997, there
can be no assurance that the Company can produce the oil and gas reserves or
otherwise liquidate those assets during the times or at the prices assumed in
valuing those reserves. In addition, no assurance can be made that the Company
will generate cash flows from operations or operate profitably in the future as
an oil and gas exploration, development and production company. Any likelihood
of future profitability of the Company must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered in connection with the oil and natural gas exploration, development
and production business in which the Company will be engaged.
Need for Additional Capital. The Company's ability to complete its planned
drilling and development programs which are intended to expand its reserve base
and diversify its operations, is dependent upon the Company's ability to obtain
the necessary capital. The Company's cash flow and borrowing capacity, together
with any proceeds from this offering, will not be sufficient for the Company to
complete its planned drilling and development programs. Additional sources of
financing will be needed and there can be no assurance that additional sources
of financing will be available at all or at a reasonable cost. See "Management's
Discussion and Analysis" in the First Quarter Report and the Second Quarter
Report.
Development Risks and Production. A portion of the Company's oil and gas
reserves are proved undeveloped reserves. Successful development and production
of such reserves, although they are categorized as "proved," cannot be assured.
Additional drilling will be necessary in future years both to maintain
production levels and to define the extent and recoverability of existing
reserves. There is no assurance that present oil and gas wells of the Company
will continue to produce at current or anticipated rates of production, that
development drilling will be successful, that production of oil and gas will
commence when expected, that there will be favorable markets for oil and gas
which may be produced in the future or that production rates achieved in early
periods can be maintained.
Convertible Debenture Repayment Priority. As of June 30, 1997, the
Company's obligations under its outstanding 10% collateralized convertible
debentures, (the "Convertible Debentures"), in the principal amount of
$4,180,000, together with interest thereon, is secured by a first priority
security interest in substantially all of the Company's oil and gas reserves in
Larimer and Weld Counties, Colorado, which reserves totaled over 50% of all the
Company's reserves at December 31, 1996. The Convertible Debentures are due in
2001 and interest is paid quarterly. If the Company's obligations under the
Convertible Debentures are ever declared immediately due and payable, the
holders of the Convertible Debentures would have a first lien on the pledged
assets and the Company might be required to sell all or a significant portion of
the assets to repay the Convertible Debentures.
Price Volatility. The revenues generated by the Company and estimated
future net revenue are highly dependent upon the prices of oil, natural gas and
natural gas liquids. The volatile energy market makes it difficult to estimate
future prices of oil, natural gas or natural gas liquids. The Company's average
collected price for oil in 1994 was $15.94 per barrel and for natural gas was
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<PAGE>
$1.36 per thousand cubic feet ("mcf"), for 1995 was $16.77 and $1.18,
respectively and for 1996, $20.35 and $1.26, respectively. For the six months
ended June 30, 1997 the Company's average collected price was $19.92 per barrel
of oil and $1.61 per mcf for gas. The reserve valuations shown in the Company's
Annual Report on Form 10-KSB are based on prices being received by the Company
at December 31, 1996 which were $24.43 per barrel of oil and $3.73 per mcf of
natural gas, which are higher than the average prices received during the first
half of 1997. Various factors beyond the control of the Company affect prices of
oil and natural gas, including worldwide and domestic supplies of, and demand
for, oil and natural gas, the ability of the members of the Organization of
Petroleum Exporting Countries ("OPEC") to agree to and maintain oil price and
production controls, political instability or armed conflict in oil-producing
regions, the price of foreign imports, the level of consumer demand, the price
and availability of alternative fuels, the availability of pipeline capacity and
changes in existing federal regulation and price controls. As in the past, it is
likely that oil and gas prices will continue to fluctuate in the future which
may adversely affect the Company's business.
Limitations on Accuracy of Reserve Estimates and Future Net Revenue. This
Prospectus and the Annual Report on Form 10-KSB contain estimates of the
Company's oil and gas reserves and the future net revenue therefrom which have
been prepared by independent petroleum engineers. These estimates are based on
various assumptions and, therefore, are inherently imprecise. Estimates of
reserves and of future net revenue prepared by different petroleum engineers may
vary substantially depending, in part, on the assumptions made and may be
subject to adjustment either up or down in the future. Actual future production,
revenue, taxes, development expenditures, operating expenses and quantities of
recoverable oil and gas reserves may vary substantially from those assumed in
the estimates. In addition, the Company's reserves may be subject to downward or
upward revision, based upon production history, results of future exploration
and development, prevailing oil and gas prices and other factors. If these
estimates of quantities, prices and costs prove inaccurate, the Company is
unsuccessful in expanding its oil and gas reserves base with its capital
expenditure program, and/or declines in and instability of oil and natural gas
prices occur, then writedowns in the capitalized costs associated with the
Company's oil and gas assets may be required.
Risks Inherent in Oil and Gas Operations The search for oil and gas is a
highly speculative activity that may be marked by numerous unproductive efforts.
Many wells will be dry, and productive wells may not produce enough oil or gas
to produce a profit or even return the invested capital. The Company must
continually acquire and explore for and develop new oil and gas reserves to
replace those being depleted by production. Without successful drilling or
acquisition ventures, the Company's assets, properties and revenues will
decline. Oil and gas exploration and development are speculative, involve a high
degree of risk and are subject to all the hazards typically associated with the
search for, development of, and production of oil and gas. The Company's
operations are subject to all of the risks incident to exploration for and
production of oil and gas including blow-outs, cratering, pollution and fires,
each of which could result in damage to or destruction of oil and gas wells or
production facilities or damage to persons and property. The Company's insurance
may not fully cover certain of these risks and the occurrence of a significant
event not fully insured against could have a material adverse effect on the
Company's financial position. The process of drilling for oil and gas can be
hazardous and carry the risk that no commercially viable oil or gas production
will be obtained. The cost of drilling, completing and operating wells is often
uncertain. Moreover, drilling may be curtailed, delayed or canceled as the
result of many factors, including title problems, weather conditions, shortages
of or delays in delivery of equipment, as well as the financial instability of
well operators, major working interest owners and well servicing companies. The
availability of a ready market for the Company's oil and gas depends on numerous
factors beyond its control, including the demand for and supply of oil and gas,
the proximity of the Company's natural gas reserves to pipelines, the capacity
of such pipelines, fluctuations in production and seasonal demand, the effects
of inclement weather and governmental regulation. New gas wells may be shut-in
for lack of a market until a gas pipeline or gathering system with available
capacity is extended into the area. New oil wells may have production curtailed
until production facilities and delivery arrangements are acquired or developed.
The Company's business will always be subject to these types of risks.
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<PAGE>
Exploration Risks. The Company intends to pursue a significant number of
wildcat projects in southern Louisiana, Texas and the Gulf Coast, and through
June 30, 1997 had drilled or participated in the drilling of three exploratory
wells, of which one was dry and two wells have been completed as producing
wells. The Company expects to expend at least $5 million in exploratory drilling
and related exploration activities during the remainder of 1997 and at least an
additional $8 million in 1998. Exploration for oil and gas involves an extremely
high degree of risk that no commercial production will be obtained or that the
production will be insufficient to recover drilling and completion costs. The
costs of drilling, completing and operating wells is, at best, uncertain.
Drilling operations may be curtailed, delayed or canceled as a result of
numerous factors, including title problems, weather conditions, compliance with
governmental regulations and shortages and delays in the delivery of equipment.
Furthermore, completion of a well does not assure a profit on the investment or
a recovery of drilling, completion and operating costs.
Risks of Purchasing Interests in Oil and Gas Properties. The Company
expects to continue to make acquisitions of producing and exploratory oil and
gas properties in the future. The Company often will not control the operation
of properties in which an interest is acquired. It is generally not feasible for
the Company to review in-depth every property it purchases and all records with
respect to such properties. However, even an in-depth review of properties and
records may not necessarily reveal existing or potential problems, nor will it
permit the Company to become familiar enough with the properties to assess fully
their deficiencies and capabilities. Evaluation of future recoverable reserves
of oil, gas and natural gas liquids, which is an integral part of the property
selection process, is a process that depends upon evaluation of existing
geological, engineering and production data, some or all of which may prove to
be unreliable or not indicative of future performance. To the extent the seller
does not operate the properties, obtaining access to properties and records may
be more difficult. Even when problems are identified, the seller may not be
willing or financially able to give contractual protection against such
problems, and the Company may decide to assume environmental and other
liabilities in connection with acquired properties.
Competition. The oil and gas industry is highly competitive in many
respects, including identification of attractive oil and gas properties for
acquisition, drilling and development, securing financing for such activities
and obtaining the necessary equipment and personnel to conduct such operations
and activities. In seeking suitable opportunities, the Company competes with a
number of other companies, including large oil and gas companies and other
independent operators with greater financial resources and, in some cases, with
more experience. Many other oil and gas companies in the industry have financial
resources, personnel and facilities substantially greater than those of the
Company and there can be no assurance that the Company will continue to be able
to compete effectively with these larger entities.
Shortage of Equipment, Services, and Supplies. There is often competition
for scarce drilling and completion equipment, services and supplies, and there
can be no assurance that sufficient drilling and completion equipment, services
and supplies will be available when needed. The likelihood of shortages is
greater at the present time than in the past because of the recent increase in
oil and gas prices causing an increase in drilling activity and a resulting
decrease in available material and equipment. Any such shortages could delay the
proposed exploration, development, and sales activities of the Company and could
cause a material adverse affect to the financial condition of the Company.
Dependence on Key Personnel. The success of the Company will largely be
dependent upon the efforts and active participation of Willard H. Pease, Jr. the
President of the Company, James N. Burkhalter, the Vice President of Engineering
and Production of the Company, Patrick J. Duncan, the Chief Financial Officer of
the Company, and certain other key employees. The loss of the services of any of
its officers or other key employees may adversely affect the Company's business.
Government Regulation and Environmental Risks. The production and sale of
gas and oil are subject to a variety of federal, state and local government
regulations, including regulations concerning the prevention of waste, the
discharge of materials into the environment, the conservation of natural gas and
oil, pollution, permits for drilling operations, drilling bonds, reports
concerning operations, the spacing of wells, the unitization and pooling of
properties, and various other matters, including taxes. Many jurisdictions have
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<PAGE>
at various times imposed limitations on the production of gas and oil by
restricting the rate of flow for gas and oil wells below their actual capacity
to produce. In addition, many states have raised state taxes on energy sources
and additional increases may occur, although increases in state energy taxes
would have no predictable effect on natural gas and oil prices. The Company
believes it is in substantial compliance with applicable environmental and other
government laws and regulations, however, there can be no assurance that
significant costs for compliance will not be incurred in the future.
The production and sale of oil and natural gas are subject to various
federal, state and local governmental regulations, which may be changed from
time to time in response to economic or political conditions. Matters subject to
regulation include discharge permits for drilling operations, drilling bonds,
reports concerning operations, the spacing of wells, unitization and pooling of
properties, taxation and environmental protection. From time to time, regulatory
agencies have imposed price controls and limitations on production by
restricting the rate of flow of oil and gas wells below actual production
capacity in order to conserve supplies of oil and gas. From time to time,
regulatory agencies have also reviewed certain aspects of the operations of oil
and gas companies in the D-J Basin to determine if additional regulations or
regulatory action is necessary. State statutes, rules and regulations affecting
oil and gas companies may, if changed as proposed by certain interest groups,
render drilling in certain locations more expensive or uneconomical due to
increased surface owner compensation and bonding requirements or environmental
regulatory constraints. The Colorado Oil and Gas Conservation Commission
recently enacted and is considering stricter regulation of matters such as oil
conservation, land reclamation, fluid disposal and bonding of oil and gas
companies. Additionally, various cities and counties in which the Company
operates have conducted and continue to conduct hearings to review their
ordinances to determine the level of regulatory authority they should assert
over such matters. At present, it cannot be determined to what degree stricter
regulations would adversely impact the Company's operations.
Various federal, state and local laws and regulations covering the
discharge of materials into the environment, or otherwise relating to the
protection of the public health and the environment, may affect the Company's
operations, expenses and costs. Moreover, the recent trend toward stricter
standards in environmental legislation and regulations is likely to continue.
Legislation and regulations concerning the disposal of oil and gas waste were
adopted by the Colorado Oil and Gas Conservation Commission during the summer of
1993. The Colorado Air Quality Control Commission has adopted regulations to
implement the federal Clean Air Act. These regulations generally exempt oil and
gas exploration and production activities, except from certain routine filings.
These governmental agencies may impose further regulatory restrictions and
reporting requirements which could adversely impact the Company's operating
costs. However, at present the Company cannot predict if or to what degree its
costs and operations will be impacted.
Anti-Takeover Protections. The Company's Articles of Incorporation and
Bylaws include certain provisions, the effect of which may be to inhibit a
change of control of the Company. These include the authorization for issuance
of additional classes of Preferred Stock and classification of the Board of
Directors so that approximately one-third of the Company's directors are elected
annually. In addition, certain of the Company's officers have entered into
employment contracts providing for certain payments to be made upon any
termination of employment. These provisions may discourage a third party from
attempting to obtain control of the Company.
Dividend Policy. Payment of dividends on Common Stock is subject to
declaration by the Board of Directors. The Company does not currently pay cash
dividends on its Common Stock and does not anticipate paying such dividends in
the foreseeable future.
Shares Available For Future Sale. As of August 11, 1997, a total of
7,225,539 outstanding shares of Common Stock are "restricted securities" as that
term is defined under Rule 144 of the Securities Act. An additional 6,935,171
shares of Common Stock, issuable upon conversion of outstanding convertible
Debentures and exercise of outstanding Warrants and 988,300 shares of Common
Stock issuable upon exercise of options would be "restricted securities" upon
issuance. Substantially all of such Common Stock (which includes the shares of
Common Stock offered for resale by this Prospectus) has been or is expected to
be registered under the Securities Act for resale by the holders at or prior to
the time the Shares may be acquired in this Offering. Sales of substantial
amounts of Common Stock into the market by such holders or the potential of such
sales may have a depressive effect on the market price of the Company's Common
Stock.
- 7 -
<PAGE>
Outstanding Options and Warrants. As of August 11, 1997, the Company has
outstanding warrants and options to purchase a total of 6,555,144 shares of the
Company's Common Stock at an average exercise price of $3.98 per share. The
exercise prices of the outstanding warrants and options range from $.70 per
share to $6.00 per share. If all these warrants and options should be exercised,
the Company would receive gross proceeds of approximately $26 million. The
holders of the outstanding options and warrants might have the opportunity to
profit from a rise in the market price (of which there is no assurance) of the
shares of the Company's Common Stock underlying the warrants and options , and
their exercise may dilute the ownership interest in the Company held by other
stockholders.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Shares by the
Selling Shareholders.
SELLING SHAREHOLDERS
The Selling Shareholders under this Prospectus are directors, executive
officers or employees of the Company who may be deemed to be affiliates of the
Company. The names of the Selling Shareholders and the number of Shares which
may be sold hereunder are as follows:
Name of Holder Number of Shares
- -------------- ----------------
Marilyn Adams............................................... 17,500
Steve Antry................................................. 7,500
James N. Burkhalter......................................... 150,000
Patrick J. Duncan........................................... 150,000
R. Thomas Fetters........................................... 50,000
Gounong Hu.................................................. 15,000
Richard A. Houlihan......................................... 7,500
Homer C. Osborne............................................ 42,800
Willard H. Pease, Jr........................................ 198,500
John Ratcliff............................................... 5,000
James C. Ruane ............................................. 72,500
LeRoy W. Smith.............................................. 17,500
Robert V. Timlin............................................ 57,500
Clemons F. Walker........................................... 7,500
William F. Warnick.......................................... 57,500
-------
856,300
=======
PLAN OF DISTRIBUTION
The Selling Shareholders (or their pledgees, donees, transferees, or other
successors in interest) from time to time may sell all or a portion of the
Shares "at the market" to or through a market maker or into an existing trading
market, in private sales, including direct sales to purchasers, or otherwise at
prevailing market prices or at negotiated or fixed prices. By way of example,
and not by way of limitation, the Common Shares may be sold by one or more of
the following methods: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the Shares as agent but may purchase and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) an exchange distribution in accordance
with the rules of such exchange; and (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the seller may arrange for other brokers or
dealers to participate. Brokers or dealers will receive commissions or discounts
- 8 -
<PAGE>
from the seller in amounts to be negotiated immediately prior to the sale. Such
brokers or dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Securities Act, in connection
with such sales. In addition, any securities covered by the Prospectus which
qualify for sale pursuant to Rule 144 under the Securities Act may be sold under
Rule 144 rather than pursuant to the Prospectus.
The Selling Shareholders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the Shares
against certain liabilities, including liabilities arising under the Securities
Act. Any commissions paid or any discounts or concessions allowed to any such
broker-dealer which purchases Shares as principal or any profits received on the
resale of such Shares may be deemed to be underwriting discounts and commissions
under the Securities Act.
In order to comply with certain state securities laws, if applicable, the
Shares will not be sold in a particular state unless the Shares have been
registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.
The Shares offered hereby will be sold by the Selling Shareholders (or
their pledgees, donees, transferees or other successors in interest) acting as
principals for their own account. The Registrant will receive none of the
proceeds from such sales.
No underwriting arrangements exist as of the date of this Prospectus for
the Selling Shareholders to sell their shares. Upon being advised of any
underwriting arrangements that may be entered into by a Selling Shareholder
after the date of this Prospectus, the Company will prepare a supplement to this
Prospectus to disclose such arrangements. It is anticipated that the per share
selling price for the shares will be at or between the "bid" and "asked" prices
of the Company's Common Stock as quoted in the over-the-counter market
immediately preceding the sale. Expenses of any such sale will be borne by the
parties as they may agree.
Certain Provisions of the Articles of Incorporation, Bylaws and Nevada Law
The Company's ability to issue shares of new classes of preferred stock and
to determine the rights, preferences, privileges, designations and limitations
of such stock, including the dividend rights, dividend rate, conversion rights,
voting rights, terms of redemption and other terms of conditions of such stock,
could make it more difficult for a person to engage in, or discourage a person
from engaging in, a change in control transaction without the cooperation of
management. Also, the Company has adopted Bylaws pursuant to which the Board of
Directors has been classified such that in the future approximately one-third of
the directors will be elected at each annual meeting of stockholders for a three
year term. As a result of this "staggered" Board of Directors, it would be more
difficult for a person to assume control of the Company by changing the Board of
Directors without the cooperation of the Board of Directors.
The Company's Articles of Incorporation contain a provision, authorized
under Nevada law, which limits the liability of directors or officers of the
Company for monetary damages for breach of fiduciary duty as an officer or
director other than for intentional misconduct, fraud or a knowing violation of
law or for payment of a dividend in violation of Nevada law. Such provision
limits recourse for money damages which might otherwise be available to the
Company or stockholders for negligence by individuals while acting as officers
or directors of the Company. Although this provision would not prohibit
injunctive or similar actions against directors or officers, the practical
effect of such relief would be limited.
- 9 -
<PAGE>
The Articles of Incorporation and Bylaws also contain provisions requiring
the Company to indemnify officers, directors and certain employees for certain
liabilities incurred in connection with actions taken on behalf of the Company,
including expenses incurred in defending against such liabilities. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Company pursuant
to the foregoing provisions, or otherwise, the Company 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.
DESCRIPTION OF SECURITIES
The Company is authorized to issue 40,000,000 shares of $0.10 par value
Common Stock and 2,000,000 shares of preferred stock, $0.01 par value of which
740,000 shares are undesignated and the balance have been retired (hereafter the
"Preferred Stock"). As of the date of this Prospectus there were outstanding
15,458,575 shares of Common Stock, warrants to purchase up to 5,566,844 shares
of Common Stock and options to purchase up to 988,300 shares of Common Stock. No
shares of Preferred Stock are outstanding.
Common Stock
Holders of shares of Common Stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders of the Company. Except as may be
required by applicable law, holders of shares of Common Stock will not vote
separately as a class, but will vote together with the holders of outstanding
shares of other classes of capital stock. There is no right to cumulate votes in
the election of directors. A majority of the issued and outstanding Common Stock
constitutes a majority of the outstanding shares is required to effect certain
fundamental corporate changes such as liquidation, merger or amendment of the
Articles of Incorporation.
Holders of shares of Common Stock are entitled to receive dividends, if,
as, and when declared by the Board of Directors out of finds available therefor,
after payment of dividends required to be paid on outstanding shares of
preferred stock. The Company's agreement with its bank lender prohibits payment
of Common Stock dividends without the consent of the lender. Upon liquidation of
the Company, holders of shares of Common Stock are entitled to share ratably in
all assets of the Company remaining after payment of liabilities, subject to the
liquidation preference rights of any outstanding shares of Preferred Stock.
Holders of shares of Common Stock have no conversion, redemption or preemptive
rights. The rights of the holders of Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of Preferred Stock. The
outstanding shares of Common Stock are and all shares of Common Stock sold
pursuant to this offering will be, fully paid and nonassessable.
Preferred Stock
Under the Company's Articles of Incorporation, as amended ("Articles"), the
Board of Directors has the power, without further action by the holders of the
Common Stock, to designate the relative rights and preferences of the Company's
Preferred Stock, when and if issued. Such rights and preferences could include
preferences as to liquidation, redemption and conversion rights, voting rights,
dividends or other preferences, any of which my be dilutive of the interest of
the holders of the Common Stock. The Board previously designated Series A
Cumulative Convertible Preferred Stock, none of which is outstanding and all of
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<PAGE>
which has been retired. Additional classes of Preferred Stock may be designated
and issued from time to time in one or more series with such designations,
voting powers or other preferences and relative other rights or qualifications
as are determined by resolution of the Board of Directors of the Company. The
issuance of Preferred Stock may have the effect of delaying or preventing a
change in control of the Company and may have an adverse effect on the rights of
the holders of Common Stock.
Publicly Traded Warrants
As of August 11, 1997, issued and outstanding warrants to purchase up to
3,175,808 shares of Common Stock, are traded publicly on the Nasdaq Small-Cap
Market under the symbol WPOGW. The Warrants expire, if not previously exercised
by holders, on August 13, 1998 and are subject to redemption by the Company, in
whole or in part, on a pro rata basis, at the option of the Company, upon not
less than 30 days prior notice, at a redemption price equal to $0.25 per
Warrant.
Each Warrant represents the right to purchase one share of Common Stock on
or before 5:00 p.m. Eastern Time on August 13, 1998 at an initial exercise price
of $6.00 per share. The exercise price and the number of shares underlying the
Warrants are subject to adjustment in certain events, including the issuance of
Common Stock as a dividend on shares of Common Stock; subdivisions, combinations
and reclassifications of the shares of the Common Stock; the distribution to all
holders of Common Stock of evidences of indebtedness of the Company or assets
(other than cash dividends); and certain mergers, a consolidation or a sale of
substantially all of the assets of the Company. Except as stated in the
preceding sentence, the Warrants do not contain provisions protecting against
dilution resulting from the sale of additional shares of Common Stock for less
than the exercise price of the Warrants or the current market price.
Holders of Warrants will be entitled to notice if (a) the Company grants
holders of its Common Stock rights to purchase any shares of capital stock or
any other rights, or (b) the Company authorizes a reclassification, capital
reorganization, consolidation, merger or sale of substantially all of its
assets.
The Warrants are subject to the terms of a Warrant Agreement between the
Company and American Securities Transfer and Trust, Inc. as Warrant Agent. The
Company and the Warrant Agent may from time to time supplement or amend the
Warrant Agreement, without the approval of any Warrant Holders, to correct or
supplement defective or inconsistent provisions or to make any other provisions
in regard to matters or questions arising under the Warrant Agreement which
shall not adversely affect the Warrant Holders, including (but not limited to)
extending the Expiration Date and any conditional or unconditional reduction in
the Exercise Price, as the Board of Directors may determine. The Company and the
Warrant Agent may make any other amendment to the Warrant Agreement upon
obtaining the consent of a majority of the holders of outstanding Warrants,
except that the consent of all Warrant Holders is necessary to shorten the time
of exercise of any Warrant or to increase the Exercise Price.
The Company has reserved from its authorized but unissued shares a
sufficient number of shares of Common Stock for issuance on exercise of the
Warrants. Exercise of each Warrant may be effected by delivery of the Warrant,
duly endorsed for exercise and accompanied by payment of the exercise price, to
the Warrant Agent. The shares of Common Stock issuable on exercise of the
Warrants will be, when issued and paid for in the manner contemplated by the
Warrants, fully paid and nonassessable.
For the life of the Warrants, the holders thereof have the opportunity to
profit from a rise in the market for the Company's Common Stock, with a
resulting dilution in the interest of all other stockholders. So long as the
Warrants are outstanding, the terms on which the Company could obtain additional
capital may be adversely affected. The holders of the Warrants might be expected
to exercise them at a time when the Company would, in all likelihood, be able to
obtain any needed capital by a new offering of securities on terms more
favorable than those provided for by the Warrants.
- 11 -
<PAGE>
Except as described above, the holders of the Warrants have no rights as
stockholders until they exercise their Warrants. Shares of Common Stock issuable
upon exercise of the Warrants have been registered under the Securities Act for
resale by holders.
LEGAL MATTERS
The validity of the Common Stock will be passed upon for the Company by
Alan W. Peryam, LLC, Denver, Colorado.
EXPERTS
The consolidated financial statements as of December 31, 1996, and for each
of the two years in the period ended December 31, 1996, incorporated by
reference in this Prospectus, have been audited by HEIN + ASSOCIATES LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
- 11 -
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
No dealer, salesperson or other person has been authorized to
give any information or to make any representa tion not contained
in this Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized PEASE OIL AND GAS COMPANY
by the Company or any Selling Securityholder. This Prospectus
does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any juris- 900,000 SHARES OF COMMON STOCK
diction to any persons to whom it is unlawful to make such offer
in such jurisdiction.
-----------------------------------
Page No. ---------------------
--------
PROSPECTUS
AVAILABLE INFORMATION...................................2
---------------------
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE...............................2
PROSPECTUS SUMMARY......................................3
RISK FACTORS............................................4
USE OF PROCEEDS.........................................8
SELLING SHAREHOLDERS....................................8
PLAN OF DISTRIBUTION....................................9
DESCRIPTION OF SECURITIES..............................10
LEGAL MATTERS..........................................12 August 29, 1997
EXPERTS ..............................................12
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
In accordance with Rule 428 under the Securities Act, and the instructional
Note to Part I of Form S-8, the information required by Part I to be contained
in the Section 10(a) prospectus has been omitted from this Registration
Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant with the Securities and
Exchange Commission (the "Commission") are incorporated by reference into this
Registration Statement:
(1) Annual Report on Form 10-KSB for the year ended December 31,
1996;
(2) The Company's Proxy Statement, dated April 30, 1997 for the
Annual Meeting of Shareholders of the Company held May 31, 1997;
(3) Quarterly Report on Form 10-QSB for the quarter ended March 31,
1997;
(4) Quarterly Report on Form 10-QSB for the quarter ended June 30,
1997;
(5) Current Report on Form 8-K dated January 10, 1997;
(6) Current Report on Form 8-K dated February 14, 1997;
(7) Current Report on Form 8-K dated March 13, 1997;
(8) Current Report on Form 8-K dated May 31, 1997;
(9) Current Report on Form 8-K dated June 11, 1997;
(10) Current Report on Form 8-K dated June 19, 1997;
(11) Current Report on Form 8-K dated June 27, 1997;
(12) The description of the Company's shares of Common Stock, $0.10
par value, contained in the Company's Registration Statement
No.333-31921 on Form S-3, filed under the Securities Act, and any
further amendment or any report filed under the Exchange Act for
the purpose of updating such description; and
(13) All documents filed after the date of this Prospectus by the
Company pursuant to Sections 13(a) or 15(d) of the Exchange Act
since the end of the last fiscal year ended December 31, 1997.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference to this Registration Statement and to be part hereof from the date of
filing of such documents.
Item 4. Description of Securities.
The Company is authorized to issue 40,000,000 shares of $0.10 par value
Common Stock and 2,000,000 shares of preferred stock, $0.01 par value of which
740,000 shares are undesignated and the balance have been retired (hereafter the
"Preferred Stock"). As of the date of this Prospectus there were outstanding
15,458,575 shares of Common Stock, warrants to purchase up to 5,566,844 shares
of Common Stock and options to purchase up to 988,300 shares of Common Stock. No
shares of Preferred Stock are outstanding.
II-1
<PAGE>
Common Stock
Holders of shares of Common Stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders of the Company. Except as may be
required by applicable law, holders of shares of Common Stock will not vote
separately as a class, but will vote together with the holders of outstanding
shares of other classes of capital stock. There is no right to cumulate votes in
the election of directors. A majority of the issued and outstanding Common Stock
constitutes a majority of the outstanding shares is required to effect certain
fundamental corporate changes such as liquidation, merger or amendment of the
Articles of Incorporation.
Holders of shares of Common Stock are entitled to receive dividends, if,
as, and when declared by the Board of Directors out of finds available therefor,
after payment of dividends required to be paid on outstanding shares of
preferred stock. The Company's agreement with its bank lender prohibits payment
of Common Stock dividends without the consent of the lender. Upon liquidation of
the Company, holders of shares of Common Stock are entitled to share ratably in
all assets of the Company remaining after payment of liabilities, subject to the
liquidation preference rights of any outstanding shares of Preferred Stock.
Holders of shares of Common Stock have no conversion, redemption or preemptive
rights. The rights of the holders of Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of Preferred Stock. The
outstanding shares of Common Stock are and all shares of Common Stock sold
pursuant to this offering will be, fully paid and nonassessable.
Preferred Stock
Under the Company's Articles of Incorporation, as amended ("Articles"), the
Board of Directors has the power, without further action by the holders of the
Common Stock, to designate the relative rights and preferences of the Company's
Preferred Stock, when and if issued. Such rights and preferences could include
preferences as to liquidation, redemption and conversion rights, voting rights,
dividends or other preferences, any of which my be dilutive of the interest of
the holders of the Common Stock. The Board previously designated Series A
Cumulative Convertible Preferred Stock, none of which is outstanding and all of
which has been retired. Additional classes of Preferred Stock may be designated
and issued from time to time in one or more series with such designations,
voting powers or other preferences and relative other rights or qualifications
as are determined by resolution of the Board of Directors of the Company. The
issuance of Preferred Stock may have the effect of delaying or preventing a
change in control of the Company and may have an adverse effect on the rights of
the holders of Common Stock.
Publicly Traded Warrants
As of August 11, 1997, issued and outstanding warrants to purchase up to
3,175,808 shares of Common Stock, are traded publicly on the Nasdaq Small-Cap
Market under the symbol WPOGW. The Warrants expire, if not previously exercised
by holders, on August 13, 1998 and are subject to redemption by the Company, in
whole or in part, on a pro rata basis, at the option of the Company, upon not
less than 30 days prior notice, at a redemption price equal to $0.25 per
Warrant.
Each Warrant represents the right to purchase one share of Common Stock on
or before 5:00 p.m. Eastern Time on August 13, 1998 at an initial exercise price
of $6.00 per share. The exercise price and the number of shares underlying the
Warrants are subject to adjustment in certain events, including the issuance of
Common Stock as a dividend on shares of Common Stock; subdivisions, combinations
and reclassifications of the shares of the Common Stock; the distribution to all
holders of Common Stock of evidences of indebtedness of the Company or assets
(other than cash dividends); and certain mergers, a consolidation or a sale of
substantially all of the assets of the Company. Except as stated in the
preceding sentence, the Warrants do not contain provisions protecting against
dilution resulting from the sale of additional shares of Common Stock for less
than the exercise price of the Warrants or the current market price.
II-2
<PAGE>
Holders of Warrants will be entitled to notice if (a) the Company grants
holders of its Common Stock rights to purchase any shares of capital stock or
any other rights, or (b) the Company authorizes a reclassification, capital
reorganization, consolidation, merger or sale of substantially all of its
assets.
The Warrants are subject to the terms of a Warrant Agreement between the
Company and American Securities Transfer and Trust, Inc. as Warrant Agent. The
Company and the Warrant Agent may from time to time supplement or amend the
Warrant Agreement, without the approval of any Warrant Holders, to correct or
supplement defective or inconsistent provisions or to make any other provisions
in regard to matters or questions arising under the Warrant Agreement which
shall not adversely affect the Warrant Holders, including (but not limited to)
extending the Expiration Date and any conditional or unconditional reduction in
the Exercise Price, as the Board of Directors may determine. The Company and the
Warrant Agent may make any other amendment to the Warrant Agreement upon
obtaining the consent of a majority of the holders of outstanding Warrants,
except that the consent of all Warrant Holders is necessary to shorten the time
of exercise of any Warrant or to increase the Exercise Price.
The Company has reserved from its authorized but unissued shares a
sufficient number of shares of Common Stock for issuance on exercise of the
Warrants. Exercise of each Warrant may be effected by delivery of the Warrant,
duly endorsed for exercise and accompanied by payment of the exercise price, to
the Warrant Agent. The shares of Common Stock issuable on exercise of the
Warrants will be, when issued and paid for in the manner contemplated by the
Warrants, fully paid and nonassessable.
For the life of the Warrants, the holders thereof have the opportunity to
profit from a rise in the market for the Company's Common Stock, with a
resulting dilution in the interest of all other stockholders. So long as the
Warrants are outstanding, the terms on which the Company could obtain additional
capital may be adversely affected. The holders of the Warrants might be expected
to exercise them at a time when the Company would, in all likelihood, be able to
obtain any needed capital by a new offering of securities on terms more
favorable than those provided for by the Warrants.
Except as described above, the holders of the Warrants have no rights as
stockholders until they exercise their Warrants. Shares of Common Stock issuable
upon exercise of the Warrants have been registered under the Securities Act for
resale by holders.
Item 5. Interests of Named Experts and Counsel.
Alan W. Peryam, LLC, 1120 Lincoln Street, Suite 1000, Denver, Colorado
80203 has given the Company its opinion upon the validity and legality of the
securities being registered and has acted as counsel to the Company upon other
legal matters in connection with the registration or offering of such
securities.
Item 6. Indemnification of Directors and Officers.
Article VII of the Registrant's Articles of Incorporation provides that no
director or officer of the Registrant shall be personally liable to the
Registrant or any of its stockholders for damages for breach of fiduciary duty
as a director or officer, except that such provision will not eliminate or limit
the liability of a director or officer for any act or omission which involves
intentional misconduct, fraud or a knowing violation of law or for the payment
of any dividend in violation of Section 78.300 of the Nevada Revised Statutes.
Section 78.751 of the Nevada Revised Statutes permits the Registrant to
indemnify its directors, officers, employees and agents if such person acted in
good faith and in a manner which 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, has no reasonable cause to believe his conduct was
unlawful.
II-3
<PAGE>
To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, the
corporation must provide indemnification against expenses, including attorneys'
fees, actually and reasonably incurred by him in connection with the defense.
Section 43 of the Registrant's Bylaws provides that the Registrant shall
provide indemnification to Registrant's officers, directors and employees to the
fullest extent permitted under the Nevada General Corporation Law.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following are exhibits to this Registration Statement.
Exhibit No. Description and Method of Filing
4.1 1991 Stock Option Plan, incorporated by reference to Registration
Statement no. 33-6448 on Form SB-2.
4.2 1993 Stock Option Plan, incorporated by reference to Registration
Statement no. 33-6448 on Form SB-2.
4.3 1994 Stock Option Plan, incorporated by reference to Registration
Statement no. 33-6448 on Form SB-2.
4.4 1996 Stock Option Plan, incorporated by reference to Exhibit 10.25 to
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996.
5.1 Opinion of Alan W. Peryam, LLC. as to legality of securities being
registered.
23.1 Consent of Alan W. Peryam, LLC.
23.2 Consent of HEIN + ASSOCIATES LLP.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(a) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement
(the "Registration Statement"):
(i) to include any prospectus required by section 10(a)(3) of
the Securities Act of 1933 (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; and
II-4
<PAGE>
(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 (a)(i) and (a(ii) 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 Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(b) that, for the purposes 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;
(c) 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 Plan;
(d) that, for purpose of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement 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
(e) that, insofar as indemnification for liabilities arising under 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 its 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 Securities Act and
will be governed by the final adjudication of such issue.
II-5
<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 the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Grand Junction, State of Colorado, on August 29,
1997.
PEASE OIL AND GAS COMPANY
By: /s/ Willard H. Pease, Jr.
--------------------------------------------------
Willard H. Pease, Jr. Chief Executive Officer
By: /s/ Patrick J. Duncan
--------------------------------------------------
Patrick J. Duncan, Principal Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the capacity
and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Willard H. Pease, Jr. Director, Principal Executive August 29, 1997
Willard H. Pease, Jr. Officer
/s/ Patrick J. Duncan Director, Chief Financial Of August 29, 1997
Patrick J. Duncan ficer, Treasurer and Principal
Accounting Officer
/s/ Steve Antry Director August 29, 1997
Steve Antry
/s/ James N. Burkhalter Director August 29, 1997
James N. Burkhalter
/s/ R. Thomas Fetters, Jr. Director August 29, 1997
R. Thomas Fetters, Jr.
/s/ Richard A. Houlihan Director August 29, 1997
Richard A. Houlihan
/s/ Homer C. Osborne Director August 29, 1997
Homer C. Osborne
/s/ James C. Ruane Director August 29, 1997
James C. Ruane
/s/ Clemons F. Walker Director August 29, 1997
Clemons F. Walker
/s/ William F. Warnick Director August 29, 1997
William F. Warnick
</TABLE>
II-6
<PAGE>
As filed with the Securities and Exchange Commission on August 29, 1997
Registration No.
--------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Registration Statement
Under
The Securities Act of 1993
Pease Oil and Gas Company
EXHIBITS
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description Page No.
- ------- ----------- --------
<C> <C> <C>
4.1 1991 Stock Option Plan, incorporated by reference to Registration N/A
Statement no. 33-6448 on Form SB-2.
4.2 1993 Stock Option Plan, incorporated by reference to Registration N/A
Statement no. 33-6448 on Form SB-2.
4.3 1994 Stock Option Plan, incorporated by reference to Registration N/A
Statement no. 33-6448 on Form SB-2.
4.4 1996 Stock Option Plan, incorporated by reference to Exhibit N/A
10.25 to Registrant's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1996.
5.1 Opinion of Alan W. Peryam, LLC. as to legality of securities being
registered.
23.1 Consent of Alan W. Peryam, LLC.
23.2 Consent of HEIN + ASSOCIATES LLP Independent Certified Public
Accountants.
</TABLE>
ALAN W. PERYAM, LLC
1120 Lincoln Street, Suite 1000
Denver, Colorado 80203
Telephone: (303) 866-0999
Facsimile: (303) 866-0999
August 29, 1997
Pease Oil and Gas Company
751 Horizon Court, Suite 203
Grand Junction, Colorado 1506-8758
Gentlemen:
We refer to the Registration Statement on Form S-8 ("Registration
Statement") of Pease Oil and Gas Company, a Nevada corporation ("Company"), to
be filed with the United States Securities and Exchange Commission on or about
August 29, 1997, relating to 900,000 shares of $0.10 par value common stock
issuable upon exercise of Options ("Options") under the Company's 1990, 1993,
1994 and 1996 Stock Option Plans (the "Plans")
We have reviewed such documents and records as we have deemed necessary to
enable us to express an informed opinion on the matters covered thereby and we
are of the opinion that the 900,000 shares of common stock issuable upon
exercise of Options duly granted under the above-referenced Plans will, upon
issuance and payment therefor in accordance with the Plans, be legally issued,
fully paid and nonassessable.
Sincerely,
ALAN W. PERYAM, LLC
By /s/ Alan W. Peryam
------------------------------
Alan W. Peryam
CONSENT OF ATTORNEY
Reference is made to the Registration Statement on Form S-8 pursuant to
which certain Selling Securityholders described therein propose to sell a
maximum of 900,000 shares of the $0.10 par value common stock ("Common Stock")
of the Company. Reference is also made to the opinion dated August 29, 1997
included as Exhibit (5.1) to the Registration Statement relating to the legality
of the securities proposed to be issued and to be sold.
I hereby consent to the filing of the opinion dated August 29, 1997, as an
exhibit to the Company's Registration Statement on Form S-8 and reference to the
undersigned in the Registration Statement under the caption "Interest of Named
Experts and Legal Counsel."
ALAN W. PERYAM, LLC
By /s/ Alan W. Peryam
------------------------------
Alan W. Peryam
Denver, Colorado
Dated: August 29, 1997
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S CONSENT
We consent to the incorporation by reference in the Registration Statement of
Pease Oil and Gas Company on Form S-8 of our report dated February 21, 1997 on
our audits of the consolidated financial statements of Pease Oil and Gas Company
as of December 31, 1996, and for the years ended December 31, 1996 and 1995,
which report is included in the Annual Report of Pease Oil and Gas Company on
Form 10-KSB for the fiscal year ended December 31, 1996.
/s/ Hein + Associates LLP
HEIN + ASSOCIATES LLP
Denver, Colorado
August 29, 1997
