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As Filed with the Securities and Exchange Commission on March 28, 2000
Registration Statement No. 33-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT of 1933
DELTA PETROLEUM CORPORATION
(Exact Name of Registrant in its Charter)
Colorado 84-1060803
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
Suite 3310, 555 17th Street, Denver, Colorado 80202
(303) 293-9133
(Address and telephone number of principal
executive offices and principal place of business)
Aleron H. Larson, Jr., Chairman/C.E.O
Delta Petroleum Corporation
Suite 3310, 555 17th Street
Denver, Colorado 80202
(303) 293-9133
(Name, address and telephone number of agent for service)
Copies to: STANLEY F. FREEDMAN, ESQ.
Krys Boyle Freedman & Sawyer, P.C.
600 Seventeenth Street, Suite 2700 South
Denver, Colorado 80202-5427
(303) 893-2300
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: -- --
If any of the securities registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. -- X --
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. -- --
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. -- -- __________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. -- --
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CALCULATION OF REGISTRATION FEE
=============================================================================
Title of Class Proposed Maximum Amount of
of Securities Amount to be Aggregate Registration
to be Registered Registered Offering Price(1) Fee
- -----------------------------------------------------------------------------
Common Stock, 1,328,000 $3,652,000 $964.13
$.01 Par Value
=============================================================================
(1) Estimated solely for the purpose of computing the amount of registration
fee based on the closing price of Registrant's Common Stock on the Nasdaq
Small-Cap Market on March 2, 2000 of $2.75 per share.
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PART I
DELTA PETROLEUM CORPORATION
1,328,000 Shares of Common Stock
$0.01 par value per share
Of the 1,328,000 shares of the Common Stock, $0.01 par value (the "Common
Stock"), of Delta Petroleum Corporation ("Delta," "Company," or "we," "our" or
"us") registered hereunder, all 1,328,000 shares are for the account of the
owners (collectively, the "Selling Shareholders"). We will not receive any
proceeds from the sale of the Common Stock sold by the Selling Shareholders.
Our Common Stock is traded on the Nasdaq Small-Cap Market under the
symbol "DPTR." On March 2, 2000, the reported closing price for our Common
Stock on the Nasdaq Small-Cap Market was $2.75.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE of RISK AND IMMEDIATE
DILUTION. THESE SECURITIES SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN BEAR
THE ECONOMIC RISK OF THIS INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE 6
AND "DILUTION" BEGINNING ON PAGE 11.
____________________________
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 THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
We anticipate that sales may be effected from time to time, by or for the
accounts of the Selling Shareholders, in the Nasdaq Small-Cap Market, in
negotiated transactions or otherwise. Sales will be made through broker-
dealers acting as agent for the Selling Shareholders or to broker-dealers who
may purchase the Common Stock as principals and thereafter sell the shares
from time to time in the Nasdaq Small-Cap Market, in negotiated transactions
or otherwise. Sales will be made at market prices prevailing at the times of
the sales or at negotiated prices. See "Plan of Distribution."
The date of this Prospectus is March __, 2000
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AVAILABLE INFORMATION
We are subject to the information requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith file
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information filed by us can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Regional Offices of the Commission located at 7 World Trade Center,
New York, New York 10048 and 500 West Madison, 14th Floor, Chicago, Illinois
60661. Copies can be obtained by mail at prescribed rates. Requests for
copies should be directed to the Commission's Public Reference Section,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission maintains a Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
that file electronically.
We have filed with the Commission a Registration Statement on Form S-3
(together with all exhibits, amendments and supplements, the "Registration
Statement") of which this Prospectus constitutes a part, under the Securities
Act of 1933, as amended (the "Securities Act"). This Prospectus does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules of the
Commission. For further information pertaining to us, reference is made to
the Registration Statement. Statements contained in this Prospectus or any
document incorporated herein by reference concerning the provisions of
documents are necessarily summaries of such documents, and each such statement
is qualified in its entirety by reference to the copy of the applicable
document filed with the Commission. Copies of the Registration Statement are
on file at the offices of the Commission, and may be inspected without charge
at the offices of the Commission, the addresses of which are set forth above,
and copies may be obtained from the Commission at prescribed rates. The
Registration Statement has been filed electronically through the Commission's
Electronic Data Gathering, Analysis and Retrieval System and may be obtained
through the Commission's Web site (http://www.sec.gov).
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents that we have filed with the Commission shall be
deemed to be incorporated in this Prospectus and to be a part hereof from the
date of the filing of such documents:
1. Amendment to Quarterly Report on Form 10-QSB/A (for quarter ended
December 31, 1999) filed on February 23, 2000, Exchange Act
reporting number 0-16203.
2. Quarterly Report on Form 10-QSB (for quarter ended December 31, 1999)
filed on February 16, 2000, Exchange Act reporting number 0-16203.
3. Amendment to Current Report on Form 8-K/A filed February 15, 2000,
Exchange Act reporting number 0-16203.
4. Current Report on Form 8-K filed on December 10, 1999, Exchange Act
reporting number 0-16203.
5. Quarterly Report on Form 10-QSB (for quarter ended September 30, 1999)
filed on November 15, 1999, Exchange Act Reporting number 0-16203.
6. Amendment to Current Report on Form 8-K/A filed January 13, 2000,
Exchange Act reporting number 0-16203.
7. Current Report on Form 8-K filed on November 12, 1999, Exchange Act
reporting number 0-16203.
8. Annual Report on Form 10-KSB (for fiscal year ended June 30, 1999) filed
September 28, 1999, Exchange Act reporting number 0-16203.
9. Amendment to Current Report on Form 8-K/A filed on August 26, 1999,
Exchange Act reporting number 0-16203.
10. Current Report on Form 8-K filed on August 26, 1999, Exchange Act
reporting number 0-16203.
11. All documents filed by us, subsequent to the date of this Prospectus,
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, prior to the termination of the offering described
herein.
Any statement contained in a document incorporated by reference herein shall
be deemed to be modified or superseded for all purposes to the extent that a
statement contained in this Prospectus or in any other subsequently filed
document which is also incorporated herein by reference modifies or replaces
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.
We will provide without charge to each person to whom this Prospectus is
delivered, on written or oral request of such person, a copy (without
exhibits) of any or all documents incorporated by reference in this
Prospectus. Requests for such copies should be directed to Aleron H. Larson,
Jr., Delta Petroleum Corporation, Suite 3310, 555 17th Street, Denver,
Colorado 80202, or (303) 293-9133.
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TABLE OF CONTENTS
PAGE
RISK FACTORS ............................................... 5
USE OF PROCEEDS ............................................ 8
DETERMINATION OF OFFERING PRICE ............................ 9
DILUTION ................................................... 9
RECENT MATERIAL CHANGES IN OUR BUSINESS ................... 9
SELLING SHAREHOLDERS ....................................... 10
PLAN OF DISTRIBUTION ....................................... 11
DESCRIPTION OF COMMON STOCK ................................ 11
EXPERTS .................................................... 12
LEGAL MATTERS .............................................. 12
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RISK FACTORS
Prospective investors should consider carefully, in addition to the other
information in this Prospectus, the following:
1. Substantial Debt Obligations and Shortages of Funding. As the
result of debt obligations that we recently incurred in connection with our
purchase of oil and gas properties from Whiting Petroleum, we are obligated to
make substantial monthly payments to our lender on a loan which encumbers the
production revenue from 11 onshore wells and the offshore Rocky Point and
Point Arguello Units. Although we intend to seek outside capital to either
refinance the debt or provide a cushion, at the present time we are almost
totally dependent upon the revenues that we receive from our oil and gas
properties to service the debt. In the event that oil and gas prices and/or
production rates drop to a level that we are unable to pay the $150,000
principal and interest minimum payment per month that is required by the debt
agreements, it is likely that we would lose our interest in the properties
that we recently purchased. In addition, our level of oil and gas activities,
including exploration and development of existing properties, and additional
property acquisition, will be significantly dependent on our ability to
successfully conclude funding transactions. No assurances can be given that
any such funding transactions will be completed successfully.
2. History of Losses; No Assurance of Profitability. We have
incurred substantial losses from our operations to date, and at December 31,
1999 we had an accumulated deficit of $21,049,164. During the six months
ended December 31, 1999, we had total revenues of $733,834, expenses of
$2,204,639 and a net loss for the six months of $1,470,805. During the year
ended June 30, 1999, we had total revenues of $1,717,651, expenses of
$4,716,410 and a net loss for the year of $2,998,759. During the fiscal year
ended June 30, 1998 we had total revenues of $2,163,615, expenses of
$3,125,618 and a net loss for the year of $962,003. There are no assurances
that we will ever achieve profitability on a consistent basis.
3. Substantial Cost to Develop Certain of Our Offshore California
Properties; Development May Be Adversely Affected by the California Offshore
Oil and Gas Energy Resources ("COOGER") Study; Company Holds Minority Interest
in Certain Properties and Generally Will Not Control Timing of Development.
Certain of our offshore California undeveloped properties, in which we have
ownership interests ranging from 2.49% to 24.22%, are attributable to our
interests in four of our five federal units (plus one additional lease)
located offshore California near Santa Barbara. The cost to develop these
properties will be very substantial. The cost to develop all of these
offshore California properties in which we own a minority interest, including
delineation wells, environmental mitigation, development wells, fixed
platforms, fixed platform facilities, pipelines and power cables, onshore
facilities and platform removal over the life of the properties (assumed to be
38 years), is estimated to be in excess of $3 billion. Our share of such
costs, based on our current ownership interest, is estimated to be over $200
million. Operating expenses for the same properties over the same period of
time, including platform operating costs, well maintenance and repair costs,
oil, gas and water treating costs, lifting costs and pipeline transportation
costs, are estimated to be approximately $3.5 billion, with our share, based
on our current ownership interest, estimated to be approximately $300 million.
There will be additional costs of a currently undetermined amount to develop
the Rocky Point Unit. Each working interest owner will be required to pay its
proportionate share of these costs based upon the amount of the interest that
it owns. If we are unable to fund our share of these costs or otherwise cover
them through farmouts or other arrangements then we could either forfeit our
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interest in certain wells or properties or suffer other penalties in the form
of delayed or reduced revenues under our various unit operating agreements.
There can be no assurance that we can farmout our interests on acceptable
terms.
These units have been formally approved and are regulated by the Minerals
Management Service ("MMS") of the federal government. While the federal
government has recently attempted to expedite the process of obtaining permits
and authorizations necessary to develop the properties, there can be no
assurance that it will be successful in doing so. The MMS has initiated the
California Offshore Oil and Gas Energy Resources (COOGER) study at the request
of the local regulatory agencies of the affected Tri-Counties. The COOGER
study seeks to present a long-term regional perspective of potential onshore
constraints that should be considered when developing existing undeveloped
offshore leases. COOGER will project the economically recoverable oil and gas
production from offshore leases which have not yet been developed. These
projections will be utilized to assist in identifying a potential range of
scenarios for developing these leases. The "worst" case scenario is that no
new development of existing offshore leases would occur. If this scenario
were ultimately to be adopted by governmental decision makers and the industry
as the proper course of action for development, our offshore California
properties would in all likelihood have little or no value. We would seek to
cause the Federal government to reimburse us for all money spent by us and our
predecessors for leasing and other costs and/or for the value of the oil and
gas reserves found on the leases through our exploration activities and those
of our predecessors.
We do not act as operator of and, with the exception of Rocky Point, we
do not own a controlling interest in any of the offshore California properties
and consequently we will generally not control the timing of either the
development of the properties or the expenditures for development unless we
choose to unilaterally propose the drilling of wells under the relevant
operating agreements.
4. Substantial Costs to Develop Reserves. We have significant
undeveloped properties in addition to those in offshore California discussed
in #3 above that will require substantial costs to develop. During the year
ended June 30, 1999, we participated in the drilling and/or
completion/recompletion of four gas wells and seven non-productive wells. We
anticipate that we will participate in the drilling of a total of seven to ten
new wells during the fiscal year ending June 30, 2000. Although we believe
that we will participate in the drilling of additional wells during the
current fiscal year, our level of oil and gas activity, including exploration
and development and property acquisitions, will be to a significant extent
dependent upon our ability to successfully conclude funding transactions, of
which there is no assurance.
We expect to continue incurring costs to acquire, explore and develop oil
and gas properties, and management predicts that these costs (together with
general and administrative expenses) will be in excess of funds available from
revenues from properties owned by us and existing cash on hand. It is
anticipated that the source of funds to carry out such exploration and
development will come from a combination of our sale of working interests in
oil and gas leases, production revenues, sales of our securities, and funds
from any funding transactions in which we might engage.
5. Dependence on Oil and Gas Prices. Our current ability to service
our debt and our oil and gas exploration and production activities are
dependent on the market prices of oil and gas. The prices for oil and gas are
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dependent on a number of factors, including the extent of domestic production
and imports of oil; the competitive position of oil and gas as a source of
energy as compared with coal, atomic energy, hydroelectric power and other
energy sources; the refining capacity of prospective oil purchasers; the
availability and capacity of pipelines and other means of transportation; and
the effect of federal and state regulation on production, transportation and
sale of oil and gas. Such factors are beyond our control or influence. The
volatility of prices of oil and gas, which has been substantial in the past
and may continue to be high in the future, may have material effects on our
liquidity and capital resources. The Company is currently receiving oil and
gas prices in excess of their respective averages during the prior two years.
In addition, oil prices are at their highest level in the last ten years.
There can be no guarantee that these prices will continue in the future.
Additionally, the valuation of our proven and unproven oil and gas properties
and our production revenues could vary and fluctuate significantly with
changes in oil and gas prices. We have entered into a forward sale
arrangements to mitigate the risks associated with lower prices, but these
arrangements also limit our ability to receive increased revenues from higher
prices.
6. Shares Available for Resale. Of our presently outstanding shares
of Common Stock, 914,880 shares of "restricted securities" (the "UFG Owned
Shares") are owned by our former parent, Underwriters Financial Group, Inc.
("UFG"), which has filed for protection under federal bankruptcy laws. Under
the terms of a settlement agreement reached among us, UFG and Snyder Oil
Corporation ("SOCO"), UFG granted a lien to SOCO on the UFG Owned Shares.
While the settlement agreement imposes certain restrictions upon the sales of
the UFG Owned Shares into the public market in addition to any restrictions
provided by SEC Rule 144 for affiliates, SOCO and the Trustee in bankruptcy
for UFG intend to effectuate the sale of the UFG Owned Shares as soon as
practicable. Subject to these restrictions, all of the UFG Owned Shares are
currently eligible for resale. Investors should be aware that such sale of
the UFG Owned Shares may, in the future, have a depressive effect on the price
of our Common Stock.
7. Competition. Oil and gas exploration and acquisition of
undeveloped properties is a highly competitive and speculative business. We
compete with a number of other companies, including major oil companies and
other independent operators which may be more experienced and may have greater
financial resources. We do not hold a significant competitive position in the
oil and gas industry.
8. Governmental Regulation and Control. Our activities are subject
to extensive federal, state, and local laws and regulations controlling not
only the exploration for and sale of oil, but also the possible effects of
such activities on the environment. Present as well as future legislation and
regulations could cause additional expenditures, restrictions and delays in
our business, the extent of which cannot be predicted, and may require us to
cease operations in some circumstances. In addition, the production and sale
of oil and gas are subject to various governmental controls. Because federal
energy policies are still uncertain and are subject to constant revisions, no
prediction can be made as to the ultimate effect on us of such governmental
policies and controls.
9. Dependence Upon Operators. We currently operate only a small
portion of the wells in which we own an interest, and we are dependent upon
the operator of the wells that we do not operate to make most decisions
concerning such things as whether or not to drill additional wells, how much
production to take from such wells, or whether or not to cease operation of
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certain wells. While we, as a working interest owner, may have some voice in
the decisions concerning the wells, we are not the primary decision maker
concerning them. Therefore we may be unable to cause wells to be drilled even
though we may have the funds with which to pay our proportionate share of the
expenses of such drilling.
10. General Risks Inherent in Oil and Gas Exploration and Operations.
Our business is subject to risks inherent in the exploration, development and
operation of oil and gas properties, including but not limited to
environmental damage, personal injury, and other occurrences that could result
in our incurring substantial losses and liabilities to third parties. In our
own activities, we purchase insurance against risks customarily insured
against by others conducting similar activities. Nevertheless, we are not
insured against all losses or liabilities which may arise from all hazards
because such insurance is not available at economic rates, because the
operator has not purchased such insurance, or because of other factors. Any
uninsured loss could have a material adverse effect on us.
11. No Long-Term Contracts. We do not have any long-term supply or
similar agreements with governments or authorities pursuant to which we act as
producer. We are therefore dependent upon our ability to sell oil and gas at
the prevailing well head market price. There can be no assurance that
purchasers will be available or that the prices they are willing to pay will
remain stable.
12. Lack of Diversification. Since all of our resources are devoted
to one industry, purchasers of our Common Stock will be risking essentially
their entire investment in a company that is focused only on oil and gas
activities.
13. Voting Rights. Holders of our Common Stock are not entitled to
accumulate their votes for the election of directors or otherwise.
Accordingly, the present shareholders will be able to elect all of our
directors, and holders of the Common Stock offered hereby will not be able to
elect a representative to our Board of Directors. See "DESCRIPTION OF COMMON
STOCK."
14. Lack of Prospective Dividends. There can be no assurance that
our proposed operations will result in sufficient revenues to enable us to
operate at profitable levels or to generate a positive cash flow. For the
foreseeable future, it is anticipated that any earnings which may be generated
from our operations will be used to finance our growth and that dividends will
not be paid to holders of Common Stock. See "DESCRIPTION OF COMMON STOCK."
15. No Assurance of a Public Market. Our Common Stock is listed on
the Nasdaq Small-Cap Market and trades under the symbol "DPTR." To date,
trading volume for our Common Stock has been relatively light. Average weekly
trading volume for the fiscal year ended June 30, 1999 was 10,445 shares. The
high sales price during such period was $4.00, while the low sales price
during the same period was $1.125.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the Common Stock being
registered hereunder for sale by the Selling Shareholders. However, some of
the selling shareholders' shares being registered represent warrants and
exercisable stock options from which, if exercised, we would receive certain
proceeds. Any proceeds received pursuant to exercise of warrants and stock
options would be used for general working capital purposes.
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DETERMINATION OF OFFERING PRICE
The shares being registered herein are being sold by Selling
Shareholders, and not by us, and are therefore being sold at the market price
as of the date of sale. Our Common Stock is traded on the Nasdaq Small-Cap
Market under the symbol "DPTR." On March 2, 2000, the reported closing price
for our Common Stock on the Nasdaq Small-Cap Market was $2.75.
DILUTION
As of December 31, 1999, we had 7,311,902 shares of Common Stock issued
and outstanding with a net tangible book value of $11,003,150 or $1.50 per
share. Net tangible book value per share represents the amount of our total
assets excluding intangible assets, less total liabilities, divided by the
number of shares of Common Stock outstanding. The following table sets forth
the dilution (excess of assumed purchase price per share over net tangible
book value per share) to be incurred by investors acquiring Common Stock.
This dilution effect will not be reflected in the Company's financial
statements.
Assumed Purchase Price (1) $2.75
Net tangible book value per share at
December 31, 1999 $1.50
Dilution to Purchasers of Common Stock $1.25
Dilution to Purchasers as Percentage
of Purchase Price 45.45%
____________________
(1) Assumes a purchase price of $2.75. The closing bid price of our Common
Stock on NASDAQ on March 2, 2000 was $2.75.
RECENT MATERIAL CHANGES IN OUR BUSINESS
There have been no material changes in our business since June 30, 1999
other than the recent drilling activity set forth below and the changes
disclosed in the Form 10-KSB for the fiscal year ended June 30, 1999, the Form
10-QSB for the period ended December 31, 1999 and the Forms 8-K filed since
June 30, 1999.
Present Drilling Activity
-------------------------
Between July 1, 1999 and February 7, 2000, we participated in the
drilling of one new well with Slawson Exploration Company on its properties in
the Sacramento Basin. The well is successful and will be selling gas within a
few weeks. We plan to participate in the drilling of one additional well on
these properties during the next 90 days.
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SELLING SHAREHOLDERS
The following table indicates the Selling Shareholders currently known to
us. The calculations are based upon outstanding shares at February 10, 2000
of 7,564,702.
Number of
Shares of
Common Stock % Held
Owned Prior to Prior to Common Stock
Name the Offering Offering to be Sold
Bank Leu AG 428,000 5.66% 428,000
Troy L. Bates 257,500(1) 3.34% 200,000
Globemedia AG 762,200(2) 9.15% 700,000
Number of
Shares of
Common Stock % Held
Owned After After the
Name the Offering Offering
Bank Leu AG 0 0
Troy L. Bates 57,500 .75%
Globemedia AG 62,200 .75%
____________________________
(1) 117,500 shares are owned directly by Mr. Bates. Common Stock to be sold
includes 140,000 shares of Common Stock underlying currently exercisable
options to purchase shares at $2.00 per share.
(2) Includes 62,200 shares of Common Stock underlying currently exercisable
options to purchase shares at $1.75 per share which underlying shares have
been previously registered for sale. Common Stock to be sold in this offering
includes 100,000 shares of Common Stock underlying currently exercisable
options to purchase shares at $2.00 per share; 300,000 shares underlyng
currently exercisable options to purchase shares at $2.50 per share; 100,000
shares underlying currently exercisable options to purchase shares at $3.00
per share; 100,000 shares underlying currently exercisable options to purchase
shares at $3.50 per share; and 100,000 shares underlying options to purchase
shares at $4.00 per share.
We will not receive any proceeds from the sale of Common Stock by any of
the Selling Shareholders listed above except such proceeds as may be received
by us upon the exercise of outstanding warrants or options by the Selling
Shareholders. We have the unilateral right to reduce the exercise price of
each of the warrants and options listed above, and may do so if deemed to be
in the best interests of our company and our shareholders in the reasonable
business judgment of the Board of Directors. We have agreed to pay for all
costs and expenses incident to the issuance, offer, sale and delivery of the
Common Stock, including, but not limited to, all expenses and fees of
preparing, filing and printing the Registration Statement and Prospectus and
related exhibits, amendments and supplements thereto and mailing of such
items. We will not pay selling commissions and expenses associated with any
such sales by any of the Selling Shareholders. The Selling Shareholders have
advised us that sales of shares of our Common Stock may be made from time to
time by and for their respective accounts in one or more transactions in the
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over-the-counter market, in negotiated transactions or otherwise, at prices
related to the prevailing market price or at negotiated prices.
PLAN OF DISTRIBUTION
The Common Stock registered hereunder may be sold from time to time by
the Selling Shareholders. Such sales may be made in the over-the-counter
market or otherwise at prices and at terms then prevailing or at prices
related to the then current market price, or in negotiated transactions. The
Common Stock may be sold by one or more of the following methods: (i) a block
trade in which the broker or dealer so engaged will attempt to sell the Common
Stock as agent for the Selling Shareholders; and (ii) ordinary brokerage
transactions and transactions in which the broker solicits purchasers. In
effecting sales, brokers or dealers engaged by the Selling Shareholders may
arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions from the Selling Shareholders 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.
The Selling Shareholders have advised us that sales of the Common Stock
registered hereby may be effected from time to time in transactions (which may
include block transactions) in the NASDAQ market, in negotiated transactions,
through the writing of options on the Common Stock, or a combination of such
methods of sale, at fixed prices which may be charged, at market prices
prevailing at the time of sale, or at negotiated prices.
The Selling Shareholders may effect such transactions by selling Common
Stock directly to purchasers or to or through broker-dealers which may act as
agents or principals. Such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from the Selling Shareholders
and/or the purchasers of Common Stock for whom such broker-dealers may act as
agents or to whom they sell as principal, or both. The Selling Shareholders
and any broker-dealers that act in connection with the sale of the Common
Stock might be deemed to be "underwriters" within the meaning of Section 2(11)
of the Act and any commissions received by them and any profit on the resale
of the Common Stock as principal might be deemed to be underwriting discounts
and commissions under the Securities Act.
The Selling Shareholders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the Common
Stock against certain liabilities, including liabilities arising under the
Securities Act of 1933, as amended.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is therefore unenforceable.
DESCRIPTION OF COMMON STOCK
We are authorized to issue 300,000,000 shares of our $.01 par value
Common Stock, of which 7,564,702 shares were issued and outstanding as of
February 10, 2000. Holders of Common Stock are entitled to cast one vote for
each share held of record on all matters presented to shareholders.
Shareholders do not have cumulative rights; hence, the holders of more than
50% of the outstanding Common Stock can elect all directors.
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Holders of Common Stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefor
and, in the event of liquidation, to share pro rata in any distribution of our
assets after payment of all liabilities. We do not anticipate that any
dividends on Common Stock will be declared or paid in the foreseeable future.
Holders of Common Stock do not have any rights of redemption or conversion or
preemptive rights to subscribe to additional shares if issued by us. All of
the outstanding shares of our Common Stock are fully paid and nonassessable.
A total of 914,880 shares of our Common Stock that are owned by
Underwriters Financial Group, Inc. are subject to a voting agreement with us,
whereby Aleron H. Larson, Jr. and Roger A. Parker, our Chief Executive Officer
and President, respectively, have the right to vote the shares owned by UFG.
The voting agreement does not apply if the shares are sold to persons who,
upon such purchase, would not be deemed affiliates of us or UFG.
EXPERTS
The Consolidated Financial Statements of Delta Petroleum Corporation as
of June 30, 1999 and 1998, and for each of the years in the three-year period
ended June 30, 1999, have been incorporated by reference herein and in the
Registration Statement in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The Statement of Oil and Gas Revenue and Direct Lease Operating Expenses
of Oil and Gas Properties of Whiting Petroleum acquired by Delta Petroleum
Corporation for each of the years in the two year period ended June 30, 1999
which appears in the Form 8-K/A of Delta Petroleum Corporation dated January
13, 2000 has been incorporated by reference herein and in the Registration
Statement in reliance upon the report of KPMG LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing.
The Statement of Oil and Gas Revenue and Direct Lease Operating Expenses
of Oil and Gas Properties of Whiting Petroleum acquired by Delta Petroleum
Corporation for the year ended June 30, 1999 and the nine month period ended
June 30, 1998 which appears in the Form 8-K/A of Delta Petroleum Corporation
dated February 15, 2000 have been incorporated by reference herein and in the
Registration Statement in reliance on the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby will be
passed upon for us by Krys Boyle Freedman & Sawyer, P.C., Denver, Colorado.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE COMMON STOCK OFFERED BY THIS PROSPECTUS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY COMMON STOCK IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN OUR AFFAIRS SINCE THE DATE HEREOF OR THAT THE
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INFORMATION CONTAINED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO ITS DATE.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table itemizes the estimated expenses to be incurred by the
Company in connection with the issuance and distribution of the securities
being registered hereby.
SEC Registration Fee.................... $ 964.13
Transfer Agent Fees..................... 500.00
Legal Fees and Expenses................. 5,000.00
Accounting Fees and Expenses............ 1,000.00
Miscellaneous........................... 0
----------
Total .............................. $ 7,464.13
==========
Item 15. Indemnification of Directors and Officers.
The Colorado Business Corporation Act (the "Act") provides that a
Colorado corporation may indemnify a person made a party to a proceeding
because the person is or was a director against liability incurred in the
proceeding if (a) the person conducted himself or herself in good faith, and
(b) the person reasonably believed: (i) in the case of conduct in an official
capacity with the corporation, that his or her conduct was in the
corporation's best interests; and (ii) in all other cases, that his or her
conduct was at least not opposed to the corporation's best interests; and
(iii) in the case of any criminal proceeding, the person had no reasonable
cause to believe his or her conduct was unlawful. The termination of a
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent is not, of itself, determinative that the
director did not meet the standard of conduct described in the Act. The Act
also provides that a Colorado corporation is not permitted to indemnify a
director (a) in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation; or
(b) in connection with any other proceeding charging that the director derived
an improper personal benefit, whether or not involving action in an official
capacity, in which proceeding the director was adjudged liable on the basis
that he or she derived an improper personal benefit. Indemnification
permitted under the Act in connection with a proceeding by or in the right of
the corporation is limited to reasonable expenses incurred in connection with
the proceeding.
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Article X of the Company's Articles of Incorporation provides as follows:
"ARTICLE X
INDEMNIFICATION
The corporation may:
(A) Indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative (other
than an action by or in the right of the corporation), by reason of the fact
that he is or was a director, officer, employee, or agent of the corporation
or is or was serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust,
or other enterprise, against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit, or proceeding, if he acted in good faith
and in a manner he reasonably believed to be in the best interest of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, or conviction or
upon a plea of nolo contendere or its equivalent shall not of itself create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in the best interest of the corporation and, with
respect to any criminal action or proceeding, had reasonable cause to believe
his conduct was unlawful.
(B) The corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending, or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in the best
interest of the corporation; but no indemnification shall be made in respect
of any claim, issue, or matter as to which such person has been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the court in which such action
or suit was brought determines upon application that, despite the adjudication
of liability, but in view of all circumstances of the case, such person is
fairly and reasonably entitled to indemnification for such expenses which such
court deems proper.
(C) To the extent that a director, officer, employee, or agent of a
corporation has been successful on the merits in defense of any action, suit,
or proceeding referred to in (A) or (B) of this Article X or in defense of any
claim, issue, or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(D) Any indemnification under (A) or (B) of this Article X (unless
ordered by a court) and as distinguished from (C) of this Article shall be
made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee, or
agent is proper in the circumstances because he has met the applicable
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standard of conduct set forth in (A) or (B) above. Such determination shall
be made by the board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit, or proceeding, or, if
such a quorum is not obtainable or, even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or by the shareholders.
(E) Expenses (including attorneys' fees) incurred in defending a
civil or criminal action, suit, or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit, or proceeding as
authorized in (C) or (D) of this Article X upon receipt of an undertaking by
or on behalf of the director, officer, employee, or agent to repay such amount
unless it is ultimately determined that he is entitled to be indemnified by
the corporation as authorized in this Article X.
(F) The indemnification provided by this Article X shall not be
deemed exclusive of any other rights to which those indemnified may be
entitled under any applicable law, bylaw, agreement, vote of shareholders or
disinterested directors, or otherwise, and any procedure provided for by any
of the foregoing, both as to action in his official capacity and as to action
in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of heirs, executors, and administrators of such a person.
(G) The corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
corporation or who is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against any liability asserted
against him and incurred by him in any such capacity or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under provisions of this Article X."
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Item 16. Exhibits.
Exhibit
Number Description of Exhibit
3.1 Articles of Incorporation of Delta Petroleum Corporation
(incorporated by reference to Exhibit 3.1 to the Company's
Form 10 filed September 9, 1987 with the Securities and Exchange
Commission).
3.2 Bylaws of Delta Petroleum Corporation (incorporated by reference
to Exhibit 3.2 to the Company's Form 10 filed September 9, 1987
with the Securities and Exchange Commission).
4.1 Statement of Designation and Determination of Preferences of
Series A Convertible Preferred Stock is incorporated by reference
to Exhibit 28.3 of the Current Report on Form 8-K dated June 15,
1988.
4.2 Statement of Designation and Determination of Preferences of
Series B Convertible Preferred Stock is incorporated by reference
to Exhibit 28.1 of the Current Report on Form 8-K dated August 9,
1989.
4.3 Statement of Designation and Determination of Preferences of
Series C Convertible Preferred Stock is incorporated by reference
to Exhibit 4.1 of the Current Report on Form 8-K dated June 27,
1996.
5.1 Opinion of Krys Boyle Freedman & Sawyer, P.C. regarding legality.
Filed herewith electronically.
23.1 Consent of Independent Auditors. Filed herewith electronically.
23.2 Consent of Independent Auditors. Filed herewith electronically.
23.3 Consent of Independent Auditors. Filed herewith electronically.
23.4 Consent of Krys Boyle Freedman & Sawyer, P.C. Included in Exhibit
5.1 above.
23.5 Deleted.
23.6 Consent of Kent B. Lina, Petroleum Engineer. Filed herewith
electronically.
24.1 Deleted.
16
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Item 17. Undertakings.
The undersigned Company hereby undertakes:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to the registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(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;
(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.
(2) That for purposes of determining any liability under the Securities
Act of 1933, 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.
(3) 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 offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or 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 the time shall be deemed to be the initial bona
fide offering.
(5) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 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
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company 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 Company 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 Act
and will be governed by the final adjudication of such issue.
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver and State of Colorado on the
24th day of March, 2000.
DELTA PETROLEUM CORPORATION
By: /s/ Aleron H. Larson, Jr.
Aleron H. Larson, Jr., Secretary,
Chairman of the Board, Treasurer
and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signatures Title Date
/s/ Aleron H. Larson, Jr. Chief Executive 3/24/00
Aleron H. Larson, Jr. Officer, Chairman
of the Board, Treasurer,
Secretary and Director
/s/ Roger A. Parker President and 3/24/00
Roger A. Parker Director
/s/ Kevin K. Nanke Chief Financial Officer 3/24/00
Kevin K. Nanke and Principal
Accounting Officer
___________________________ Director ___________
Terry D. Enright
___________________________ Director ___________
Jerrie F. Eckelberger
18
KRYS BOYLE FREEDMAN & SAWYER, P.C.
TELEPHONE ATTORNEYS AT LAW FACSIMILE
(303) 893-2300 SUITE 2700 SOUTH TOWER (303) 893-2882
600 SEVENTEENTH STREET
DENVER, COLORADO 80202
March 24, 2000
Delta Petroleum Corporation
Suite 3310
555 17th Street
Denver, Colorado 80202
Dear Board of Directors:
We have acted as counsel to Delta Petroleum Corporation, a Colorado
corporation (the "Company"), in connection with the preparation and filing
with the Securities and Exchange Commission of a Registration Statement on
Form S-3 (the "Registration Statement"), pursuant to which the Company is
registering under the Securities Act of 1933, as amended, a total of 1,328,000
shares (the "Shares") of its common stock, $.01 par value (the "Common Stock")
for resale to the public. The Shares are to be sold by the selling
shareholders identified in the Registration Statement (the "Selling
Shareholders"). This opinion is being rendered in connection with the filing
of the Registration Statement. All capitalized terms used herein and not
otherwise defined shall have the respective meanings given to them in the
Registration Statement.
In connection with this opinion, we have examined the Company's Articles
of Incorporation and Bylaws, both as currently in effect; such other records
of the corporate proceedings of the Company and certificates of the Company's
officers as we have deemed relevant; and the Registration Statement and the
exhibits thereto.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies.
Based upon the foregoing and subject to the limitations set forth below,
we are of the opinion that the Shares have been duly and validly authorized by
the Company and the Shares that are currently issued and oustanding have been
duly and validly issued and are fully paid and non-assessable, and the Shares
to be issued upon the exercise of currently exercisable options will, upon
exercise of the options in accordance with their terms and payment to the
Company of the consideration specified therein, be duly and validly issued,
fully paid and non-assessable.
<PAGE>
March 24, 2000
Page 2
Our opinion is limited to the laws of the State of Colorado, and we
express no opinion with respect to the laws of any other jurisdiction. No
opinion is expressed herein with respect to the qualification of the Shares
under the securities or blue sky laws of any state or any foreign
jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We hereby further consent to the reference to us
under the caption "Legal Matters" in the prospectus included in the
Registration Statement.
Very truly yours,
KRYS BOYLE FREEDMAN & SAWYER, P.C.
By: /s/ Stanley F. Freedman, P.C.
Stanley F. Freedman, P.C.
Consent of Independent Auditors
We consent to the incorporation by reference of our report dated
December 29, 1999 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/A
of Delta Petroleum Corporation dated January 13, 2000 and to the reference to
our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
KPMG LLP
Denver, Colorado
March 24, 2000
Consent of Independent Auditors
We consent to the incorporation by reference of our report dated
February 7, 2000 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 the years ended June
30, 1999 and nine months ended June 30, 1998 which report appears in the Form
8-K/A of Delta Petroleum Corporation dated February 15, 2000 and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
KPMG LLP
Denver, Colorado
March 24, 2000
Consent of Independent Auditors
We consent to the incorporation by reference of our report dated
September 21, 1999 on the consolidated financial statements of Delta Petroleum
Corporation as of June 30, 1999 and 1998, and for each of the years in the
three-year period which report appears in the June 30, 1999 Annual Report on
Form 10-KSB of Delta Petroleum Corporation and to the reference to our firm
under the heading "Experts" in the prospectus.
/s/ KPMG LLP
KPMG LLP
Denver, Colorado
March 24, 2000
CONSENT OF PETROLEUM ENGINEER
The Board of Directors
Delta Petroleum Corporation
I consent to the incorporation by reference in the registration statement
on Form S-3 of Delta Petroleum Corporation of my report dated March 27, 2000
relating to the Appraisal as of June 30, 1999 of Certain Interests Owned by
Delta Petroleum Corporation and to the reference to me under the heading
"Experts" in the prospectus.
/s/ Kent B. Lina
Kent B. Lina, P.E.
Denver, Colorado
March 24, 2000
