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
July 10, 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 July 10, 2000 in connection with the acquisition of
certain producing wells and associated acreage in North Dakota 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, 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: September 22, 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 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, 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 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 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 Whiting 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
September 15, 2000
WHITING PROPERTIES
STATEMENTS OF OIL AND GAS REVENUE
AND DIRECT LEASE OPERATING EXPENSES
Years Ended June 30,
2000 1999
Operating Revenue:
Sales of condensate $1,953,385 1,023,713
Sales of natural gas 146,104 79,597
Total Operating Revenue 2,099,489 1,103,310
Direct Lease Operating Expenses 156,428 294,791
Excess Revenue Over
Direct Operating Expenses $1,943,061 $ 808,519
See accompanying notes to financial statements.
NOTES TO WHITING 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 "Whiting
Properties") for each of the years in the two-year period ended
June 30, 2000. The properties consist of 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. The July 10, 2000 payment
of $3,745,000 and the June 1, 2000 issuance of 90,000 shares of
Delta's common stock valued at approximately $280,000 resulted in
the effective acquisition of 67% of the ownership interest in
each property to be acquired. The remaining 33% of the ownership
interest in each property can be acquired by Delta on September
29, 2000 for a payment of $1,845,000.
The accompanying statements of oil and gas revenue and
direct lease operating expenses of the Whiting Properties were
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. 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 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 Condensate Natural Gas
(Bbls) (Mcf)
Balance at July 1, 1998 357,444 168,021
Production (81,663) (40,617)
Balance at June 30, 1999 275,781 127,404
Production (80,444) (39,739)
Balance at June 30, 2000 195,337 87,665
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, 2000 and 1999 is as follows:
2000 1999
Future oil and gas sales $6,275,631 $5,281,345
Future production and
development costs (553,654) (710,040)
Future net revenue 5,721,977 4,571,305
10% annual discount for estimated
timing of cash flows (1,017,626) (839,830)
Standardized measure of discounted
Future net cash flows $4,704,351 $3,731,475
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:
2000 1999
Beginning of year $3,731,475 3,026,596
Changes resulting from:
Sales of oil and gas, net of
production costs (1,943,061) (1,043,736)
Changes in prices and other 2,542,789 1,445,955
Accretion of discount 373,148 302,660
End of year $4,704,351 $3,731,475
DELTA PETROLEUM CORPORATION
CONDENSED PRO FORMA FINANCIAL STATEMENTS
On July 10, 2000, Delta Petroleum Corporation ("Delta" or
"the Company") effectively acquired 67% of the interests in 21
producing wells and associated acreage in North Dakota from
Whiting Petroleum Corporation ("the Whiting Properties") for a
purchase price of approximately $4,025,000 which consists of cash
of $3,745,000 which was financed through borrowings from an
unrelated entity at an interest rate of 15% per annum and 90,000
shares of the Company's common stock valued at approximately
$280,000. For accounting purposes, a purchase price adjustment
of approximately $871,000 for the excess of revenue over direct
expenses between the contract effective date of February 1, 2000
and June 30, 2000 (the acquisition date) has been recorded. The
remaining 33% ownership interests in each property can be
acquired by Delta on September 29, 2000 for a payment of
$1,845,000 which will be reduced by a purchase price adjustment
reflecting the excess of revenue over direct operating expenses
and capital costs from February 1, 2000, the contract effective
date, through the closing date of September 29, 2000.
The following unaudited condensed pro forma balance sheet
assumes that the acquisition of the Whiting 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 balance 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 for the year ended June 30, 2000 assumes the
acquisition of the Whiting Properties occurred on July 1, 1999.
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 Statements of Oil and Gas Revenue and Direct Operating
Expenses of the Whiting 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 756,109 870,802(2) 1,626,911
Other current assets 571,761 571,761
Total current assets 1,630,284 870,802 2,501,086
Property and Equipment:
Oil and gas properties, at cost, using
the successful efforts method
of accounting 20,414,206 4,025,002(1) 23,568,406
(870,802)(2)
Less accumulated depreciation
and depletion (2,538,030) (2,538,030)
Net property and equipment 17,876,176 3,154,200 21,030,376
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 3,745,000 $ 24,802,272
Current Liabilities:
Accounts payable $ 1,636,651 $ 1,636,651
Other accrued liabilities 213,121 213,121
Current portion of long-term debt 1,765,653 3,745,000(1) 5,510,653
Total current liabilities 3,615,425 3,745,000 7,360,425
Long-term debt 6,479,115 6,479,115
Stockholders' Equity:
Preferred stock, $.10 par value - -
Common stock, $.01 par value 84,221 84,221
Additional paid-in capital 33,746,861 33,746,861
Accumulated other comprehensive loss 77,059 77,059
Accumulated deficit (22,945,409) (22,945,409) 0
Total stockholders' equity 10,962,732 - 10,962,732
Commitments
$ 21,057,272 3,745,000 $ 24,802,272
</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 Whiting Adjustments Pro Forma
Historical Properties (Note C) Delta
<S> <C> <C> <C> <C>
Revenue:
Oil and gas sales $ 3,355,783 2,099,489 $ 5,455,272
Gain on sale of oil
and gas properties 75,000 - 75,000
Other revenue 235,198 - 235,198
Total revenue 3,665,981 2,099,489 - 5,765,470
Operating expenses:
Lease operating expenses 2,405,469 156,429 2,561,897
Depreciation and depletion 887,802 - 1,179,728(1) 2,067,530
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 5,655,288 156,428 1,179,728 6,991,444
Loss from operations (1,989,307) 1,943,061 (1,179,728) (1,225,974)
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)
Loss $ (3,367,050) 1,943,061 (1,741,478) $ (3,165,467)
Basic and diluted loss per
common share $ (0.46) $ (0.44)
Weighted average number of common
shares outstanding 7,271,336 7,271,336
See accompanying notes to condensed pro forma financial statements.
</TABLE>
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 the acquisition of oil and gas properties from
Whiting Petroleum Corporation referred to as ("the Whiting
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
transaction 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 the Whiting Properties occurred as of
July 1, 1999. 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
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 Whiting Properties
included herein.
B) ACQUISITION OF WHITING PROPERTIES - BALANCE SHEET
On July 10, 2000, Delta Petroleum Corporation ("Delta"
or "the Company") effectively acquired 67% of the interests in 21
producing wells and associated acreage in North Dakota from
Whiting Petroleum Corporation ("Whiting Properties") for a
purchase price of approximately $4,025,000 which consists of cash
of $3,745,000 which was financed through borrowings from an
unrelated entity at an interest rate of 15% per annum and 90,000
shares of the Company's common stock valued at approximately
$280,000. For accounting purposes, a purchase price adjustment
of approximately $871,000 for the excess of revenue over direct
expenses between the contract effective date of February 1, 2000
and June 30, 2000 (the acquisition date) has been recorded.
The accompanying historical balance sheet of Delta at
June 30, 2000 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. The debt, due
October 9, 2000, is guaranteed by two officers of the Company.
(2) To record a purchase price adjustment for the
excess revenues over direct expenses between the
contract effective date of February 1, 2000 and the
acquisition date of June 30, 2000.
C) ACQUISITION OF WHITING 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 the Whiting Properties for the year ended June 30,
2000. 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 acquisition of the Whiting
properties.
(2) To record interest expense for interest associated with the
debt incurred in connection with the Whiting 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.
(3) 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.
