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
September 29, 2000
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 September 29, 2000 in connection with the
acquisition of certain producing wells and associated acreage in
North Dakota from Whiting Petroleum Corporation ("North Dakota
Properties").
ITEM 7. FINANCIAL STATEMENTS AND EXHIBIT.
(A) Audited Statement of Oil and Gas Revenue and Direct Lease
Operating Expenses of the North Dakota Properties for each of the
years in the two-year period ended June 30, 2000.
(B) Condensed pro forma financial statements of Delta Petroleum
Corporation for the year ended June 30, 2000.
(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: December 8, 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 statements of oil and gas
revenue and direct lease operating expenses of oil and gas
properties ("the North Dakota Properties") of Whiting Petroleum
Corporation ("Whiting") acquired by Delta Petroleum Corporation
for each of the years in the two-year period ended June 30, 2000.
These financial statement are the responsibility of Whiting's
management. Our responsibility is to express an opinion on these
financial statements 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 statements of oil and gas revenue and
direct lease operating expenses were 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 North
Dakota Properties cannot make a practicable determination of the
portion of their general and administrative expenses or other
indirect expenses which are attributable to the North Dakota
Properties.
In our opinion, the statements of oil and gas revenue and
direct lease operating expenses referred to above present fairly,
in all material respects, the oil and gas revenue and direct
lease operating expenses of the North Dakota Properties as
described in Note 1 for each of the years in the two-year period
ended June 30, 2000, in conformity with generally accepted
accounting principles.
s/KPMG LLP
KPMG LLP
November 28, 2000
NORTH DAKOTA PROPERTIES
STATEMENTS OF OIL AND GAS REVENUE
AND DIRECT LEASE OPERATING EXPENSES
Years Ended June 30,
2000 1999
Operating Revenue:
Sales of condensate $2,915,500 1,527,930
Sales of natural gas 218,065 118,801
Total Operating Revenue 3,133,565 1,646,731
Direct Lease Operating Expenses 233,475 136,996
Excess Revenue Over
Direct Operating Expenses $2,900,090 $1,509,735
See accompanying notes to financial statements.
NOTES TO NORTH DAKOTA PROPERTIES STATEMENTS OF
OIL AND GAS REVENUE AND DIRECT LEASE OPERATING EXPENSES
FOR EACH OF THE YEARS IN THE TWO-YEAR PERIOD ENDED
JUNE 30, 2000
1) PURCHASE OF OIL AND GAS PROPERTIES AND BASIS OF
PRESENTATIONS
The accompanying financial statements present the revenues
and direct lease operating expenses of certain oil and gas
properties of Whiting Petroleum Corporation (the "North Dakota
Properties") for each of the years in the two-year period ended
June 30, 2000. The properties consist of 100% of the working
interests in oil and gas properties located in North Dakota that
are subject to an agreement for acquisition by Delta Petroleum
Corporation ("Delta") effective February 1, 2000, which were
acquired on July 10, 2000 (67%) and September 28, 200 (33%),
respectively.
On July 10, 2000 the Company paid $3,745,000 and issued
90,000 shares of the Company's common stock valued at
approximately $280,000 and on September 28, 2000, the Company
paid $1,845,000, to acquire interests in producing wells and
acreage located in the Eland and Stadium fields in Stark County,
North Dakota. The July 10, 2000 and September 28, 2000
transactions resulted in the acquisition by the Company of 67%
and 33%, respectively, of the ownership interest in each property
acquired. The $3,745,000 payment on July 10, 2000 was financed
through borrowings from an unrelated entity and personally
guaranteed by two of the Company's officers. The payment on
September 28, 2000 was primarily paid out of the Company's share
of excess revenues over direct lease operating expenses from the
effective date of the acquisitions of February 1, 2000 through
closing. Delta also issued 100,000 shares of its restricted
common stock to an unaffiliated party for its consultation and
assistance related to the transaction. The fair value of the
shares at the date of issuance is $450,000 and is included as a
component of the cost of the properties.
The accompanying statements of oil and gas revenue and
direct lease operating expenses of the North Dakota Properties
were prepared to comply with certain rules and regulations of the
Securities and Exchange Commission and include 100% of the
property interests acquired in the two transactions. Full
historical financial statements including general and
administrative expenses and other indirect expenses, have not
been presented as management of the North Dakota Properties
cannot make a practicable determination of the portion of their
general and administrative expenses or other indirect expenses
which are attributable to the North Dakota Properties.
Accordingly, their financial statements are not indicative of the
operating results, subsequent to the acquisition.
Revenue in the accompanying statements 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 properties as
well as production taxes and monthly administrative overhead
costs charged by the operator.
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. Prices include consideration of
changes in existing prices provided only by contractual
arrangements, but not on escalations based on future
conditions.
An estimate of proved developed future net
recoverable oil and gas reserves of the North Dakota
Properties and changes therein follows. Such estimates
are inherently imprecise and may be subject to
substantial revisions. Proved undeveloped reserves
attributable to the North Dakota Properties are not
significant.
Oil and Condensate Natural Gas
(Bbls) (Mcf)
Balance at July 1, 1998 533,497 250,778
Production (121,885) (60,622)
Balance at June 30, 1999 411,612 190,156
Production (120,066) (59,312)
Balance at June 30, 2000 291,546 130,844
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, due
to available net operating loss carry forwards of the
Company. 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, 2000 and 1999 is as follows:
2000 1999
Future oil and gas sales $9,366,613 $6,042,856
Future production and
development costs (826,349) (1,057,438)
Future net revenue 8,540,264 4,985,418
10% annual discount for estimated
timing of cash flows (1,518,845) (597,353)
Standardized measure of discounted
Future net cash flows $7,021,419 $4,388,065
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:
2000 1999
Beginning of year $4,388,065 3,485,232
Changes resulting from:
Sales of oil and gas, net of
production costs (2,900,090) (1,509,735)
Changes in prices and other 5,094,637 2,064,045
Accretion of discount 438,807 348,523
End of year $7,021,419 $4,388,065
DELTA PETROLEUM CORPORATION
CONDENSED PRO FORMA FINANCIAL STATEMENTS
On July 10, 2000 the Company paid $3,745,000 and issued
90,000 shares of the Company's common stock valued at
approximately $280,000 and on September 28, 2000, the Company
paid $1,845,000 to acquire interests in producing wells and
acreage located in the Eland and Stadium fields in Stark County,
North Dakota. The July 10, 2000 and September 28, 2000 payments
resulted in the acquisition by the Company of 67% and 33%,
respectively, of the ownership interest in each property
acquired. The $3,745,000 payment on July 10, 2000 was financed
through borrowings from an unrelated entity and personally
guaranteed by two of the Company's officers. The payment on
September 28, 2000 was primarily paid out of the Company's share
of excess revenues over direct lease operating expenses from the
effective date of the acquisitions through closing. Delta also
issued 100,000 shares of its restricted common stock to an
unaffiliated party for its consultation and assistance related to
the transaction.
The following unaudited condensed pro forma balance sheet
assumes that the acquisition of 100% of the property interests
of North Dakota Properties occurred on June 30, 2000 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 balannce
sheet should be read in conjunction with the historical statements
and related notes of the Company.
The following unaudited condensed pro forma statement of
operations for the year ended June 30, 2000 assumes the
acquisition of 100% of the property interests of the North Dakota
Properties occurred on July 1, 1999, respectively. No general
and administrative or other indirect costs related to the North
Dakota Properties have been reflected in the historical results
of the North Dakota 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 Statements of Oil and Gas Revenue and Direct
Operating Expenses of the North Dakota Properties included
herein.
DELTA PETROLEUM CORPORATION
Unaudited Condensed Pro Forma Balance Sheet
As of June 30, 2000
<TABLE>
Pro Forma
Delta Adjustments Pro Forma
Historical (Note B) Delta
<S> <C> <C> <C>
Current Assets:
Cash $ 302,414 $ 302,414
Accounts receivable 756,109 756,109
Other current assets 571,761 571,761
Total current assets 1,630,284 - 1,630,284
Property and Equipment:
Oil and gas properties, at cost, using
the successful efforts method of accounting 20,414,206 5,001,394(1) 25,415,600
Less accumulated depreciation and depletion (2,538,030) (2,538,030)
Net property and equipment 17,876,176 5,001,394 22,877,570
Long term assets:
Other long term assets 1,270,810 1,270,810
Deposit on purchase of oil and gas properties 280,002 (280,002)(1) -
Total long term assets 1,550,812 (280,002) 1,270,810
$ 21,057,272 4,721,392 $ 25,778,664
Current Liabilities:
Accounts payable $ 1,636,651 $ 1,636,651
Purchase price payable - 526,392(1) 526,392
Other accrued liabilities 213,121 213,121
Current portion of long-term debt 1,765,653 1,765,653
Total current liabilities 3,615,425 526,392 4,141,817
Long-term debt 6,479,115 3,745,000(1) 10,224,115
Stockholders' Equity:
Preferred stock, $.10 par value - -
Common stock, $.01 par value 84,221 1,000(1) 85,221
Additional paid-in capital 33,746,861 449,000(1) 34,195,861
Accumulated other comprehensive loss 77,059 77,059
Accumulated deficit (22,945,409) (22,945,409)
Total stockholders' equity 10,962,732 450,000 11,412,732
Commitments
$ 21,057,272 4,721,392 $ 25,778,664
</TABLE>
See accompanying notes to condensed pro forma financial statements.
DELTA PETROLEUM CORPORATION
Unaudited Condensed Pro Forma Statement of Operations
Year Ended June 30, 2000
<TABLE>
Pro Forma
Delta North Dakota Adjustments Pro Forma
Historical Properties (Note C) Delta
<S> <C> <C> <C> <C>
Revenue:
Oil and gas sales $ 3,355,783 3,133,565 $ 6,489,348
Gain on sale of oil and gas properties 75,000 - 75,000
235,198 - 235,198
Total revenue 3,665,981 3,133,565 - 6,799,546
Operating expenses:
Lease operating expenses 2,405,469 233,475 2,638,944
Depreciation and depletion 887,802 - 1,464,908(1) 2,352,710
Exploration expenses 46,730 - 46,730
General and administrative 1,777,579 - 1,777,579
Stock option expense 537,708 - 537,708
Total operating expenses 5,655,288 233,475 1,464,908 7,353,671
Income (loss) from operations (1,989,307) 2,900,090 (1,464,908) (554,125)
Other income and expenses:
Interest expense (1,264,954) - (561,750)(2)(1,826,704)
Loss on sale of securities available
for sale (112,789) - (112,789)
Total other income and expenses (1,377,743) - (561,750) (1,939,493)
Net income (loss) $ (3,367,050) 2,900,090 (2,026,658) $(2,493,618)
Basic and diluted loss per common share $ (0.46) $(0.34)
Weighted average number of common
shares outstanding 7,271,336 100,000 7,371,336
See accompanying notes to condensed pro forma financial statements.
NOTES TO CONDENSED PRO FORMA
FINANCIAL STATEMENTS JUNE 30, 2000 (UNAUDITED)
A) BASIS OF PRESENTATION
The accompanying unaudited condensed pro forma balance
sheet assumes that both acquisitions of oil and gas properties
from Whiting Petroleum Corporation referred to as ("the North
Dakota Properties") occurred on June 30, 2000 and reflects the
historical consolidated balance sheet of Delta Petroleum
Corporation ("Delta") at that date giving pro forma effect to the
transactions using the purchase method of accounting. The
unaudited condensed pro forma balance sheet should be read in
conjunction with the historical financial statements and related
notes of Delta.
The accompanying unaudited condensed pro forma
statement of operations for the year ended June 30, 2000 assumes
that the acquisition of 100% of the property interests of the
North Dakota Properties occurred as of July 1, 1999,
respectively. No general and administrative or other indirect
costs related to the North Dakota Properties have been reflected
in the historical results of the North Dakota 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
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 Statements of
Revenue and Direct Operating Expenses of the North Dakota
Properties included herein.
B) ACQUISITION OF NORTH DAKOTA PROPERTIES - BALANCE SHEET
On July 10, 2000 the Company paid $3,745,000 and issued
90,000 shares of the Company's common stock valued at approximately
$280,000 and on September 28, 2000, the Company paid $1,845,000
to acquire interests in producing wells and acreage located in
the Eland and Stadium fields in Stark County, North Dakota. The
July 10, 2000 and September 28, 2000 payments resulted in the
acquisition by the Company of 67% and 33%, respectively, of the
ownership interest in each property acquired. The $3,745,000
payment on July 10, 2000 was financed through borrowings from an
unrelated entity and personally guaranteed by two of the
Company's officers. The payment on September 28, 2000 was
primarily paid out of the Company's share of excess revenues over
direct lease operating expenses from the effective date of the
acquisitions of February 1, 2000 through closing. Delta also
issued 100,000 shares of its restricted common stock to an
unaffiliated party for its consultation and assistance related to
the transaction.
The accompanying historical balance sheet of Delta at
June 30, 2000 has been adjusted to record the purchase price of
100% of the property interests of the North Dakota Properties as
follows:
(1) To record the assets acquired relating to the North Dakota
Properties and the related financing:
Oil and gas properties, net of excess revenues
over direct expenses between the contract effective
date of February 1, 2000 and the assumed acquisition
date of June 30, 2000 ($5,001,394), deposit
previously paid in common stock ($280,002), common
stock issued ($450,000), new borrowings
($3,745,000), and purchase price payable ($526,392).
C) ACQUISITION OF NORTH DAKOTA PROPERTIES - STATEMENT OF
OPERATIONS
The accompanying condensed pro forma statement of
operations for the year ended June 30, 2000 has been adjusted to
include the historical revenue and direct lease operating
expenses of 100% of the property interests of the North Dakota
Properties. In addition, the following adjustments have been
made to the accompanying condensed pro forma statement of
operations for the year ended June 30, 2000:
(1) To adjust depletion expense to reflect the pro forma
depletion rate giving effect to the acquisitions of the North
Dakota Properties.
(2) To record interest expense for interest
associated with the debt incurred in connection with
the North Dakota Properties at a rate of 15% per
annum. A one-eighth change in interest rate would
have a $4,681 annual impact on interest expense.
No income tax effects of the proforma adjustment have
been reflected due to Delta's net operating loss carry forward
position and income tax valuation allowance.
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.
</TABLE>
