SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT UNDER TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): March 18, 1997
Commission File Number: 0-14096
FORELAND CORPORATION
(Exact Name of Registrant as Specified in its Charter)
NEVADA 87-0422812
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
12596 W. BAYAUD AVENUE
SUITE 300, LAKEWOOD, COLORADO 80228
(Address of Principal (Zip Code)
Executive Offices)
Registrant's Telephone Number, including Area Code:
(303) 988-3122
N/A
(Former name, former address, and formal fiscal year, if changed since
last report)
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ITEM 5. OTHER EVENTS
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Foreland Corporation ("Foreland" or the "Company") announced on March 18,
1997, that its oil reserves had increased to 3.7 million barrels as of December
31, 1996, as compared to 2.0 million barrels a year earlier. The value of
Foreland's oil reserves increased to $22.9 million as of December 31, 1996, as
compared to $6.2 million at the end of 1995. The reserve evaluation was
prepared by Malkewicz Hueni Associates, independent petroleum engineers of
Golden, Colorado, based on its analysis of estimated future net cash flows,
discounted to present value at 10% per annum, using constant oil prices and
costs in accordance with the requirements of the Securities and Exchange
Commission. The estimated non-discounted future net cash flows increased from
$12 million year end 1995 to $42 million as of December 31, 1996.
The substantial increase in oil reserves reflects the addition of proved
developed producing and proved undeveloped reserves attributable to the Ghost
Ranch Field discovered through the Company's 1996 drilling program as well as
Foreland's purchase in the fourth quarter of a 40% working interest in the Eagle
Springs field held by a third party. The increase in discounted present value
of Foreland's oil reserves is also the result of a favorable oil price of $18.12
per barrel as of December 31, 1996, as compared to $12.92 a year earlier
Management of the Company believes that this growth reflects the results of
the company's strategy of acquisitions, exploration and development and is
pleased that the Company's success in using 3D seismic in selecting Ghost Ranch
drilling locations is being translated into significant reserves. Management
also believes that the increased production will allow the Company to
aggressively expand its exploration and development program through production
revenues.
There are numerous uncertainties inherent in estimating quantities of
proved reserves and projecting future rates of production and timing of
development expenditures. Estimated future net revenues are particularly
subject to fluctuations in oil prices, which have fluctuated significantly
during the preceding years. As noted above, the reserve values announced by
Foreland are based on the December 31, 1996, price of $18.12 then being
received. As of March 10, 1997, Foreland was receiving approximately $12.87 for
oil then delivered by it.
The following table highlights Foreland's reserve information.
FORELAND CORPORATION
OIL RESERVE SUMMARY
DECEMBER 31, 1996 AND 1995
Present Value of
Estimated Net Estimated Future
Oil Reserves Estimated Future Net Cash Flow,
Reserve Classification (Bbls) Net Cash Flow* Discounted at 10%*
1996 1995 1996 1995 1996 1995
(In thousands)
Proved Developed 1,851 1,128 21,286 7,267 11,270 3,969
Producing
Proved Developed Non- 49 47 407 213 246 123
Producing
Proved Undeveloped 1823 831 21,135 4,600 11,405 2,107
Total Proved 3,723 2,006 $42,828 $12,080 $22,922 $6,199
*Before federal income tax.
Foreland has been engaged in oil exploration in Nevada since 1985 and
produces oil principally from the Eagle Springs and Ghost Ranch fields that it
operates in Railroad Valley, Nevada. Foreland discovered the Ghost Ranch field
in 1996 through the use of a focused 3D seismic program.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: March 19, 1997
FORELAND CORPORATION
By /s/ Kenneth Ransom,
Vice President
