SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
November 1, 1999
DELTA PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 0-16203 84-1060803
(State of Commission (I.R.S. Employer
Incorporation) File No. Identification No.)
Suite 3310
555 17th Street
Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 293-9133
This report on Form 8-K/A amends and supplements a report on
Form 8-K filed by Delta Petroleum Corporation ("Delta" or "the
Company") on November 1, 1999 in connection with the acquisition of
certain producing wells and associated acreage in New Mexico and Texas
from Whiting Petroleum Corporation ("Whiting Properties").
ITEM 7. FINANCIAL STATEMENTS AND EXHIBIT.
(A) Audited Statement of Oil and Gas Revenue and Direct Lease
Operating Expenses of the Whiting Properties for each of the years in
the two year period ended June 30, 1999.
(B) Condensed pro forma combined financial statements of Delta
Petroleum Corporation at September 30, 1999 and for the three months
then ended, and for the year ended June 30, 1999.
(C) Exhibit
(23.1) Consent of KPMG LLP
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
DELTA PETROLEUM CORPORATION
(Registrant)
Date: January 13, 2000 By: s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
Chairman/C.E.O.
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS
WHITING PETROLEUM CORPORATION
We have audited the accompanying statement of oil and gas
revenue and direct lease operating expenses of oil and gas
properties ("the Whiting Properties") of Whiting Petroleum
Corporation ("Whiting") acquired by Delta Petroleum Corporation
for each of the years in the two-year period ended June 30, 1999.
This financial statement is the responsibility of Whiting's
management. Our responsibility is to express an opinion on this
financial statement based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the statement of oil and gas revenue and direct lease
operating expenses is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the statement of oil and gas revenue
and direct lease operating expenses. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
The accompanying statement of oil and gas revenue and direct
lease operating expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and
Exchange Commission. Full historical financial statements,
including general and administrative expenses and other indirect
expenses, have not been presented as management of the Whiting
Properties cannot make a practicable determination of the portion
of their general and administrative expenses or other indirect
expenses which are attributable to the Whiting Properties.
In our opinion, the statement of oil and gas revenue and
direct lease operating expenses referred to above presents
fairly, in all material respects, the oil and gas revenue and
direct lease operating expenses of the Whiting Properties as
described in Note 1 for each of the years in the two-year period
ended June 30, 1999, in conformity with generally accepted
accounting principles.
KPMG LLP
s/KPMG LLP
December 29,1999
WHITING PROPERTIES
STATEMENT OF OIL AND GAS REVENUE
AND DIRECT LEASE OPERATING EXPENSES
Three months
Ended
September 30, Years Ended June 30,
1999 1999 1998
(Unaudited)
Operating Revenue:
Sales of condensate $ 47,689 124,083 165,555
Sales of natural gas 207,243 648,583 675,536
Total Operating Revenue 254,932 772,621 841,091
Direct Lease Operating Expenses 66,339 250,373 221,593
Net Operating Revenue $188,593 522,248 619,498
See accompanying notes to financial statements.
NOTES TO WHITING PROPERTIES STATEMENT OF
OIL AND GAS REVENUE AND DIRECT LEASE OPERATING EXPENSES
FOR EACH OF THE YEARS IN THE TWO-YEAR PERIOD ENDED
JUNE 30, 1999
1) PURCHASE OF OIL AND GAS PROPERTIES AND BASIS OF
PRESENTATIONS
The accompanying financial statement presents the revenues
and direct lease operating expenses of certain oil and gas
properties of Whiting Petroleum Corporation (the "Whiting
Properties") for each of the years in the two-year period ended
June 30, 1999. The properties consist of working interests in
oil and gas properties located in New Mexico and Texas. These
properties are subject to an agreement whereby Delta Petroleum
Corporation's purchase is effective July 1, 1999.
The accompanying statement of oil and gas revenue and direct
lease operating expenses of the Whiting Properties was prepared
to comply with certain rules and regulations of the Securities
and Exchange Commission. Full historical financial statements
including general and administrative expenses and other indirect
expenses, have not been presented as management of the Whiting
Properties cannot make a practicable determination of the portion
of their general and administrative expenses or other indirect
expenses which are attributable to the Whiting Properties.
Revenue in the accompanying statement of oil and gas revenue
and direct lease operating expenses is recognized on the sales
method.
Direct lease operating expenses are recognized on the
accrual basis and consist of all costs incurred in producing,
marketing and distributing products produced by the property as
well as production taxes and monthly administrative overhead
costs.
2) SUPPLEMENTAL FINANCIAL DATA -OIL AND GAS PRODUCING
ACTIVITIES (UNAUDITED)
The following unaudited information has been prepared in
accordance with Statement of Financial Accounting Standards No.
69, DISCLOSURE ABOUT OIL AND GAS PRODUCING ACTIVITIES (SFAS 69).
A) ESTIMATED PROVED OIL AND GAS RESERVES
Proved oil and gas reserves are the estimated
quantities of crude oil, natural gas, and natural gas
liquids which geological and engineering data demonstrate
with reasonable certainty to be recoverable in future
years from known reservoirs under existing economic and
operating conditions; i.e., prices and costs as of the
date the estimate is made. Proved developed oil and gas
reserves are reserves that can be expected to be
recovered through existing wells with existing equipment
and operating methods. Proved undeveloped oil and gas
reserves are reserves that are expected to be recovered
from new wells on undrilled acreage, or from existing
wells where a relatively major expenditure is required
for recompletion.
An estimate of proved developed future net
recoverable oil and gas reserves of the Whiting
Properties and changes therein follows. Such estimates
are inherently imprecise and may be subject to
substantial revisions. Proved undeveloped reserves
attributable to the Whiting Properties are not
significant.
Oil and Natural
Condensate Gas
(Bbls) (Mcf)
Balance at July 1, 1997 107,847 3,752,496
Production (10,129) (286,248)
Effect of changes in prices
and other 1,190 71,163
Balance at June 30, 1998 98,908 3,537,411
Production (9,698) (305,944)
Effect of changes in
prices and other 4,046 145,563
Balance at June 30, 1999 93,256 3,377,030
B) STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET
CASH FLOWS
The standard measure of discounted future net cash
flows has been calculated in accordance with the
provisions of SFAS No. 69.
Future oil and gas sales and production and
development costs have been estimated using prices and
costs in effect at the end of the years indicated.
Future income tax expenses have not been considered, as
the properties are not a tax paying entity. Future
general and administrative and interest expenses have
also not been considered.
Changes in the demand for oil and natural gas,
inflation, and other factors make such estimates
inherently imprecise and subject to substantial revision.
This table should not be construed to be an estimate of
the current market value of the proved reserves. The
standardized measure of discounted future net cash flows
as of June 30, 1999 and 1998 is as follows:
1999 1998
Future oil and gas sales $9,911,271 8,635,254
Future production and
development costs (4,176,027) (3,999,310)
Future net revenue 5,735,244 4,635,944
10% annual discount for estimated
timing of cash flows (2,622,202) (2,047,660)
Standardized measure of discounted
Future net cash flows $3,113,042 2,588,284
No income taxes have been reflected due to available
net operating loss carry forwards of Delta Petroleum
Corporation.
C) CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE
NET CASH FLOWS RELATING TO PROVED OIL AND GAS
RESERVES
An analysis of the changes in the total standardized
measure of discounted future net cash flows during each
of the last two years is as follows:
1999 1998
Beginning of year $2,588,284 2,526,799
Changes resulting from:
Sales of oil and gas, net of
Production costs (522,248) (619,498)
Changes in prices and other 788,178 428,303
Accretion of discount 258,828 252,680
End of year $3,113,042 2,588,284
DELTA PETROLEUM CORPORATION
CONDENSED PRO FORMA COMBINED FINANCIAL STATEMENTS
On November 1, 1999, Delta Petroleum Corporation ("Delta"
or "the Company") purchased interests in 11 producing wells and
associated acreage in New Mexico and Texas from Whiting Petroleum
Corporation ("Whiting Properties") for a purchase price of
approximately $2,880,000 financed through borrowings from an
unrelated entity at an interest rate of 18% per annum.
The following unaudited condensed pro forma combined
balance sheet assumes that the acquisition of the Whiting
Properties occurred on September 30, 1999 and reflects the
historical consolidated balance sheet of Delta giving pro forma
effect to this transaction using the purchase method of
accounting. The unaudited condensed pro forma combined balance
sheet should be read in conjunction with the historical
statements and related notes of the Company.
The following unaudited condensed pro forma combined
statement of operations for the three months ended September 30,
1999 and for the year ended June 30, 1999 assumes the acquisition
of the Whiting Properties occurred on July 1, 1998. No general
and administrative or other indirect costs related to the Whiting
Properties have been reflected in the historical results of the
Whiting Properties nor have they been reflected in proforma
adjustments as it is not practical to allocate such costs for the
historical statements or estimate such costs for proforma
purposes. The pro forma results of operations are not
necessarily indicative of the results of operations that would
actually have been attained if the transaction had occurred as of
this date. These statements should be read in conjunction with
the historical financial statements and related notes of the
Company and the Statement of Oil and Gas Revenue and Direct
Operating Expenses of the Whiting Properties included herein.
DELTA PETROLEUM CORPORATION
Unaudited Condensed Pro Forma Combined Balance Sheet
As of September 30, 1999
<TABLE>
Pro Forma
Delta Adjustments Pro Forma
Historical (Note B) Delta
Current Assets:
<S> <C> <C> <C>
Cash $ 39,560 39,560
Trade accounts receivable 257,171 257,171
Other current assets 10,900 10,900
Total current assets 307,631 - 307,631
Property and Equipment:
Oil and gas properties, at cost,
using the successful
efforts method of accounting 10,861,712 2,880,000(1) 13,741,712
Less accumulated depreciation
and depletion (1,684,862) (1,684,862)
Net property and equipment 9,176,850 2,880,000 12,056,850
Long term assets:
Other long term assets 257,338 257,338
Deposit on purchase of oil and
gas properties 3,919,800 3,919,800
Total long term assets 4,177,138 - 4,177,138
$13,661,619 2,880,000 16,541,619
Current Liabilities:
Accounts payable $ 410,584 410,584
Other accrued liabilities 208,964 208,964
Current portion of long-term debt 360,425 2,880,000(1) 3,240,425
Total current liabilities 979,973 2,880,000 3,859,973
Long-term debt 2,679,575 2,679,575
Stockholders' Equity:
Preferred stock, $.10 par value - -
Common stock, $.01 par value 66,539 66,539
Additional paid-in capital 30,190,800 30,190,800
Accumulated other comprehensive loss (148,332) (148,332)
Accumulated deficit (20,106,936) (20,106,936) 0
Total stockholders' equity 10,002,071 - 10,002,071
Commitments
$13,661,619 2,880,000 16,541,619
</TABLE>
See accompanying notes to condensed pro forma combined financial statements.
DELTA PETROLEUM CORPORATION
Unaudited Condensed Pro Forma Combined Statement of Operations
Three Months Ended September 30, 1999
<TABLE>
Pro Forma
Delta Whiting Adjustments Pro Forma
Historical Properties (Note C) Delta
Revenue:
<S> <C> <C> <C> <C>
Oil and gas sales $ 116,540 254,932 371,472
Other revenue 30,288 - 30,288
Total revenue 146,828 254,932 - 401,760
Operating expenses:
Lease operating expenses 39,147 66,339 105,486
Depreciation and depletion 34,634 - 64,224(1) 98,858
Exploration expenses 415 - 415
Abandoned and impaired
properties 1,114 - 1,114
General and administrative 380,083 - 380,083
Stock option expense 109,986 - 109,986
Total operating expenses 565,379 66,339 64,224 695,942
Loss from operations (418,551) 188,593 (64,224) (294,182)
Other income and expenses:
Interest expense (107,475) - (129,600)(2) (237,075)
Loss on sale of securities
available for sale (2,551) - (2,551)
Total other income
and expenses (110,026) - (129,600) (239,626)
Loss $ (528,577) 188,593 (193,824) (533,808)
Basic and diluted loss
per common share $ (0.08) (0.08)
Weighted average number
of common
shares outstanding 6,574,445 6,574,445
</TABLE>
See accompanying notes to condensed pro forma combined financial statements.
DELTA PETROLEUM CORPORATION
Unaudited Condensed Pro Forma Combined Statement of Operations
Year Ended June 30, 1999
<TABLE>
Pro Forma
Delta Whiting Adjustments Pro Forma
Historical Properties (Note C) Delta
Revenue:
<S> <C> <C> <C> <C>
Oil and gas sales $ 557,503 772,621 1,330,124
Gain on sale of oil
and gas properties 957,147 - 957,147
Other revenue 203,001 - 203,001
Total revenue 1,717,651 772,621 - 2,490,272
Operating expenses:
Lease operating expenses 209,438 250,373 459,811
Depreciation and depletion 229,292 - 243,936(1) 473,228
Exploration expenses 74,670 - 74,670
Abandoned and impaired
properties 273,041 - 273,041
Dry hole costs 226,084 - 226,084
General and administrative 1,506,683 - 1,506,683
Stock option expense 2,080,923 - 2,080,923
Total operating expenses 4,600,131 250,373 243,936 5,094,440
Loss from operations (2,882,480) 522,248 (243,936) (2,604,168)
Other income and expenses:
Interest expense (19,726) - (518,400)(2) (538,126)
Loss on sale of securities
available for sale (96,553) - (96,553)
Total other income
and expenses (116,279) - (518,400) (634,679)
Loss $(2,998,759) 522,248 (762,336) (3,238,847)
Basic and diluted loss per
common share $ (0.51) (0.55)
Weighted average number
of common
shares outstanding 5,854,758 5,854,758
</TABLE>
See accompanying notes to condensed pro forma combined financial statements.
NOTES TO CONDENSED PRO FORMA COMBINED
FINANCIAL STATEMENTS SEPTEMBER 30, 1999 (UNAUDITED)
A) BASIS OF PRESENTATION
The accompanying unaudited condensed pro forma combined
balance sheet assumes that acquisition of the Whiting Properties
occurred on September 30, 1999 and reflects the historical
consolidated balance sheet of Delta at that date giving pro forma
effect to the transaction using the purchase method of
accounting. The unaudited condensed pro forma combined balance
sheet should be read in conjunction with the historical
statements and related notes of Delta.
The accompanying unaudited condensed pro forma combined
statements of operations for the three months ended September 30,
1999 and for the year ended June 30, 1999 assume that the
acquisition of the Whiting Properties occurred as of July 1,
1998. No general and administrative or other indirect costs
related to the Whiting Properties have been reflected in the
historical results of the Whiting Properties nor have they been
reflected in proforma adjustments as it is not practical to
allocate such costs for the historical statements or estimate
such costs for proforma purposes. The pro forma results of
operations are not necessarily indicative of the results of
operations that would actual have been attained if the
transactions had occurred as of this date. These statements
should be read in conjunction with the historical financial
statements and related notes of Delta and the Statement of
Revenue and Direct Operating Expenses of the Whiting Properties
included herein.
B) ACQUISITION OF WHITING PROPERTIES - BALANCE SHEET
On November 1, 1999, the Company purchased interests in
11 producing wells and associated acreage in New Mexico and Texas
from Whiting Petroleum Corporation for a purchase price of
approximately $2,880,000 financed through borrowings from an
unrelated entity at an interest rate of 18% per annum.
The accompanying historical balance sheet of Delta at
September 30, 1999 has been adjusted to record the purchase price
of the Whiting Properties as follows:
(1) To record the assets acquired relating to the Whiting
Properties and the related short term financing.
C) ACQUISITION OF WHITING PROPERTIES - STATEMENT OF
OPERATIONS
The accompanying condensed pro forma combined statement
of operations for the three months ended September 30, 1999 and
for the year ended June 30, 1999 have been adjusted to include
the historical revenue and direct lease operating expenses of the
Whiting Properties prior to the acquisition. In addition, the
following adjustments have been made to the
accompanying condensed pro forma combined statement of operations
for the three months ended September 30, 1999 and for the year
ended June 30, 1999:
(1) To adjust depletion expense to reflect the pro forma
combined depletion rate giving effect to the acquisition of the
Whiting properties.
(2) To record interest expense for interest associated with the
debt incurred in connection with the Whiting Properties. Assumed
interest rate is 18%. A one-eighth change in interest rate would
have a $3,600 annual impact on interest expense.
(3) No income tax efforts of the proforma adjustment have been
reflected due to Delta's net operating loss carry forward
position.
INDEX TO EXHIBITS
(1) Underwriting Agreement. Not applicable.
(2) Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession. Not applicable.
(3) (i) Articles of Incorporation. Not applicable.
(ii) Bylaws. Not applicable.
(4) Instruments Defining the Rights of Security Holders,
including Indentures. Not applicable.
(5) Opinion: re: Legality. Not applicable.
(6) Opinion: Discount on Capital Shares. Not applicable.
(7) Opinion: re: Liquidation Preference. Not Applicable.
(8) Opinion: re: Tax Matters. Not Applicable.
(9) Voting Trust Agreement. Not Applicable.
(10) Material Contracts. Not Applicable.
(11) Statement re: Computation of Per Share Earnings.
Not Applicable.
(12) Statement re: Computation of Ratios. Not Applicable.
(13) Annual Report to Security Holders, etc. Not Applicable.
(14) Material Foreign Patents. Not Applicable.
(15) Letter re: Unaudited Interim Financial Information.
Not Applicable.
(16) Letter re: Change in Certifying Accountant.
Not applicable.
(17) Letter re: Director Resignation. Not applicable.
(18) Letter re: Change in Accounting Principles. Not Applicable.
(19) Report Furnished to Security Holders. Not Applicable.
(20) Other Documents or Statements to Security Holders. Not
applicable.
(21) Subsidiaries of the Registrant. Not Applicable.
(22) Published Report Regarding Matters Submitted to Vote of
Security Holders. Not Applicable.
(23) Consents of Experts and Counsel.
23.1 Consent of KPMG LLP
(24) Power of Attorney. Not applicable.
(25) Statement of Eligibility of Trustee. Not Applicable.
(26) Invitations for Competitive Bids. Not Applicable.
(27) Financial Data Schedule. Not Applicable.
(99) Additional Exhibits. Not Applicable.
Consent of Independent Auditors
We consent to the inclusion of our report dated December
29, 1999 in Form 8-K of Delta Petroleum Corporation and
incorporation by reference in the registration statement No. 33-
87106 on Form S-8 of Delta Petroleum Corporation relating to the
Statement of Oil and Gas Revenue and Direct lease operating
expenses of oil and gas properties of Whiting Petroleum
Corporation acquired by Delta Petroleum Corporation for each of
the years in the two-year period ended June 30, 1999 which report
appears in the Form 8-K of Delta Petroleum Corporation dated
January 13, 2000.
s/KPMG LLP
KPMG LLP
Denver, Colorado
January 12, 2000
