As filed with the Securities and Exchange Commission on March 27, 1998
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------------------
COLUMBUS ENERGY CORP.
(Exact Name of Registrant as Specified in Its Charter)
Colorado 84-0891713
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1660 Lincoln Street
Suite 2400
Denver, Colorado 80264-1901
(303) 861-5252
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-----------------------------------
Harry Trueblood, Jr.
1660 Lincoln Street
Suite 2400
Denver, Colorado 80264-1901
(303) 861-5252
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------------------------
Approximate date of commencement of proposed sale to public: From time to time
after the effective date of this Registration Statement as determined by the
Selling Shareholders.
-----------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.[ ]
If any of the securities being 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]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=============================================================================================
<S> <C> <C> <C> <C>
Title of Each Class Proposed Maximum Proposed Maximum
of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share(1) Price(1) Registration Fee
- ---------------------------------------------------------------------------------------------
Common Stock,
$.20 par value 632,984 Shares $7.53125 $4,747,161 $1,407.00
=============================================================================================
</TABLE>
(1) Estimated solely for purposes of determining the registration fee in
accordance with Rule 457(c); based upon the average of the high and low
prices of the Registrant's Common Stock, as reported by the American Stock
Exchange, on March 25, 1998.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
Subject to Completion, dated March 27, 1998
PROSPECTUS
632,984 Shares
COLUMBUS ENERGY CORP.
Common Stock
($.20 Par Value)
---------------------------
This Prospectus relates to 632,984 shares (the "Shares") of Common Stock,
$.20 par value per share (the " Common Stock"), of Columbus Energy Corp.
("Columbus" or the "Company"), to be offered and sold from time to time by
certain stockholders (the "Selling Shareholders") referred to in this
Prospectus. The Company has been advised that the Shares may be sold through
underwriters or dealers, through brokers or other agents, or directly to one or
more purchasers, at market prices prevailing at the time of sale or at prices
otherwise negotiated. To the extent required, the number of Shares to be sold,
the purchase price, the name of any broker-dealer, and any applicable
commissions, discounts or other items constituting compensation to such
broker-dealers with respect to a particular offering will be set forth in a
supplement or supplements to this Prospectus (each, a "Prospectus Supplement").
The aggregate proceeds to the Selling Shareholders from the sale of the Shares
so offered will be the purchase price of the Shares sold less the aggregate
commissions, discounts and other compensation, if any, paid to broker-dealers
and other expenses of the offering and sale of the Shares. See "Plan of
Distribution." The Company knows of no selling arrangement between any
broker-dealer and the Selling Shareholders. The Company will not receive any of
the proceeds from the sale of the Shares but will bear all of the expenses
thereof. See "Plan of Distribution."
The shares of the Company's Common Stock are listed on the American Stock
Exchange under the symbol EGY. On March__, 1998 the closing sale price of the
Common Stock as reported on the American Stock Exchange was $_____ per share.
The Selling Shareholders and any broker-dealers that participate with the
Selling Shareholders in the distribution of any of the Shares may be deemed to
be "underwriters" within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"), and any discount or commission received by them and any
profit on the resale of the Shares purchased by them may be deemed to be
underwriting commissions or discounts under such Securities Act. See "Plan of
Distribution."
------------------------------
THE SECURITIES OFFERED BY THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK.
See "Risk Factors," page 3.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------------
March __, 1998
<PAGE>
AVAILABLE INFORMATION
Columbus is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Information, as of particular dates, concerning
directors and officers, their remuneration, options granted to them, the
principal holders of securities of Columbus and any material interest of such
persons in transactions with Columbus is disclosed in proxy statements
distributed to shareholders and filed with the Commission. Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 and at the regional offices of the Commission: 500 West Madison, Suite
1400, Chicago, Illinois 60661- 2511; 7 World Trade Center, Suite 1300, New York,
New York 10048, and copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of such
Web site is http://www.sec.gov. The Company's Common Stock is listed on the
American Stock Exchange, and such reports, proxy statements and other
information may also be inspected at the offices of that Exchange.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference
(Commission File No. 1-9872):
1. The Company's Annual Report on Form 10-K for the fiscal year ended
November 30, 1997; and
2. The Company's Current Report on Form 8-K filed February 20, 1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Shares described in this Prospectus shall be
deemed to be incorporated in and made a part of this Prospectus by reference
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document that also is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statements so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on written or oral
request of any such person, a copy of any or all of the documents incorporated
by reference herein, other than exhibits to such documents (unless such
- 2 -
<PAGE>
exhibits are specifically incorporated by reference into the documents that this
Prospectus incorporates). Written or telephone requests should be directed to
Columbus Energy Corp., 1660 Lincoln Street, Suite 2400, Denver, Colorado
80264-1901, Attention: H. C. Gutjahr, Secretary, (303) 861-5252.
RISK FACTORS
The securities offered by this Prospectus involve a high degree of risk.
Each prospective purchaser of the Shares offered hereby should carefully read
the entire Prospectus but should give special consideration to the risk factors
described below.
Fluctuation in Prices of Oil and Natural Gas
The Company's revenues and earnings are dependent to a large degree on
prevailing prices for oil and natural gas and the replacement of produced
reserves which are economic at those prices. For the past twenty years, oil and
natural gas prices have been volatile and are expected to continue to be so in
the future. Currently, more than 65% of the Company's revenues are derived from
the production and sale of natural gas, which in turn causes cash flow and net
earnings to be more affected by the volatility of natural gas prices than oil
prices.
Drilling Risks
The Company's oil and natural gas operations are subject to all of the
business risks typically associated with drilling for oil and natural gas. These
risks often include the expenditure of large amounts of money for identification
and acquisition of prospective leasehold acreage with no assurance that oil and
natural gas will be found in commercial quantities when a well is drilled.
Operating Hazards and Uninsured Risks
The oil and gas business involves numerous operating risks, including
fire, explosion, pipe failure, casing collapse, abnormally pressured formations,
and environmental hazards such as oil spills, natural gas leaks, and discharges
of toxic gases. The occurrence of any of these events with respect to any
property operated or owned (in whole or in part) by the Company could have a
material adverse effect on the Company's financial condition. The Company and
the operators of its properties maintain insurance in accordance with customary
industry practices and in amounts that management believes to be reasonable.
However, insurance coverage is not always economically feasible and cannot
always be obtained, without significant exclusions, in amounts sufficient to
cover all types of operational risks. The occurrence of a significant event that
is not fully insured could have a material adverse effect on the Company's
financial condition.
Competition
The oil and natural gas industry is highly competitive. The Company
competes with others for property acquisitions and for opportunities jointly to
explore or to develop and produce oil and natural gas. The Company's competitors
- 3 -
<PAGE>
include major companies and other independent energy concerns, including
individual operators. Many of these competitors have substantially greater
financial and other resources than the Company.
Potential Adverse Impact of Environmental and Other Governmental Regulation
Oil and natural gas operations are subject to various regulation and
legislation of the federal and state governments, including environmental laws.
To date, the Company has not had to expend significant resources in order to
satisfy environmental laws and regulations presently in effect. However,
compliance costs under any new laws and regulations that might be enacted could
become material. Additional matters that are, or have been from time to time,
subject to governmental regulation include land tenure, royalties, production
rates, spacing, completion procedures, water injection, unitization, and the
maximum price at which products could be sold.
Potential Adverse Effects of Weather on Results of Operations
The results of operations of Columbus can be adversely affected by weather
conditions, which can also bring about lower energy usage or increased
availability of alternative energy sources, which in turn reduces the demand for
and prices for natural gas and oil produced by the Company.
Uncertainty of Estimates of Oil and Gas Reserves and Future Net Revenues
The Company's recent annual report on Form 10-K for fiscal year 1997
contained estimates of the Company's oil and natural gas reserves and the
discounted future net revenues to be realized from those reserves, as prepared
by independent petroleum engineers, for fiscal years 1997, 1996 and 1995. There
are numerous uncertainties inherent in estimating quantities of proved oil and
natural gas reserves, including many factors beyond the control the Company. The
estimates in Form 10-K utilize assumptions that the Commission requires all
public companies, including Columbus, to follow, such as using constant oil and
gas prices with no escalation allowed except as specifically provided for by
contract. Such estimates are inherently imprecise indications of future net
revenues. Actual future production, revenues, taxes, operating expenses,
development expenditures and quantities of recoverable oil and natural gas
reserves might vary substantially from those estimates and assumptions. Any
significant variance in such assumptions could materially affect the estimated
quantity and value of reserves set forth in such estimates. In addition, the
Company's reserves might be subject to revision based upon future production
results, future exploitation and development successes or failures, actual
prices received and other unpredictable factors.
- 4 -
<PAGE>
Dividends
Columbus does not at this time plan to pay cash dividends on its Common
Stock, since it intends to use its available cash to expand its business.
THE COMPANY
Columbus was incorporated under the laws of the State of Colorado on
October 7, 1982. Columbus engages in the production and sale of crude oil,
condensate and natural gas, as well as the acquisition and development of
leaseholds and other interests in oil and gas properties, and also acts as
manager and operator of oil and gas properties for itself and others. It also
engages in the business of compression, transmission and marketing of natural
gas through its wholly owned subsidiary, Columbus Gas Services, Inc. ("CGSI").
The Company's principal office is located at 1660 Lincoln Street, Suite 2400,
Denver, Colorado 80264 and its telephone number is (303) 861-5252.
SELLING SHAREHOLDERS
The Selling Shareholders, whose names appear in the following table, are
all officers and directors or immediate family members of directors. Each
Selling Shareholder has held the position (or had the family relationship) set
forth below his or her name in the following table for at least the past three
years.
The following table sets forth: (i) the names and position of each Selling
Shareholder; (ii) the number of shares of Common Stock owned by them; (iii) the
number of shares underlying stock options held by them; (iv) the number of
shares to be offered by them; and (v) the number of shares and percentage of
class to be owned by them after completion of the Offering. None of the Selling
Shareholders has had any position, office or other material relationship within
the past three years with the Company or any of its predecessors or affiliates,
other than as described below.
- 5 -
<PAGE>
<TABLE>
<CAPTION>
Percent
of Class
Number of After
Number of Shares to be Completion
Number of Shares Owned Upon of the
Shares Owned, Offered in this Completion Offering (if
Name and Position Under Option Offering of this more than
Offering 1%)
===================================== =============== ============== ============= ============
<S> <C> <C> <C> <C>
Harry A. Trueblood, Jr. -
Chairman of the Board 952,052(1) 305,481(1) 646,571 15.2
Executive Officer, and Director
Clarence H. Brown 63,851(2) 62,566(2) 1,285 nil
Executive Vice President and Director
Michael M. Logan 44,871(3) 43,185(3) 1,686 nil
Vice President
Corporate Development
Ronald H. Beck 50,340(4) 46,884(4) 3,456 nil
Vice President
Harold C. Gutjahr 26,455(5) 15,455(5) 11,000 nil
Corporate Secretary
James P. Garrett 47,158(6) 44,427(6) 2,731 nil
Treasurer
J. Samuel Butler 24,053(7) 19,241(7) 4,812 nil
Director
Jerol M. Sonosky 26,485(7) 17,960(7) 8,525 nil
Director
Donald W. Ringsby 42,126(7) 33,601(7) 8,525 nil
Director
Karen Ringsby 23,292 23,292 -0- nil
Wife of director
William H. Blount, Jr. 17,476 12,664(7) 4,812 nil
Director
--------------- -------------- -------------
1,318,159 624,756 693,403
=============== ============== =============
</TABLE>
(1) Includes 34,375 shares under stock options, exercisable at $7.0909 per
share.
(2) Includes 62,370 shares under stock options, 26,620 exercisable at $6.1233
per share, 15,125 at $6.1570 per share and 20,625 at $7.0909 per share.
(3) Includes 42,658 shares under stock options, 11,000 exercisable at $5.7727
per share, 6,908 at $4.8182 per share, 11,000 at $5.4545 per share and
13,750 exercisable at $7.0909 per share.
- 6 -
<PAGE>
(4) Includes 45,058 shares under stock options, 11,000 exercisable at $5.7727
per share, 9,308 at $4.8182 per share, 11,000 at $5.4545 per share and
13,750 exercisable at $7.0909 per share.
(5) Includes 13,750 shares under stock options, 5,500 exercisable at $5.4545
per share and 8,250 exercisable at $7.0909 per share.
(6) Includes 39,490 shares under stock options, 9,983 exercisable at $6.1233
per share, 7,562 at $6.1570 per share, 9,625 at $5.7727 per share, 1,320 at
$5.4545 per share and 11,000 at $7.0909 per share.
(7) Includes 11,000 shares under stock options, exercisable at $5.3636 per
share.
In addition to the shares listed above, an additional 6,000 shares are
being registered, which shares will be offered by approximately nine officers
and directors who are deemed affiliates of the Company and who may acquire
shares under the Company's 1993 Employee Stock Purchase Plan. Also included are
2,228 shares underlying non-qualifying stock options held by one employee which
are exercisable at $7.7273 to $7.8409 per share. Since none of the shares are
presently outstanding, the names and the amounts of shares they will offer will
be added by a Post-Effective Amendment to this Prospectus.
PLAN OF DISTRIBUTION
All of the Shares offered hereby are being sold by the Selling
Shareholders. The Company will not receive any of the proceeds from the sale of
the Shares.
The Company has been advised that the Shares may be sold from time to time
by the Selling Shareholders, or by any pledgee or other successor in interest to
the Selling Shareholders, in regular brokerage transactions on a national
securities exchange or in the over-the-counter market, in transactions directly
with market makers, in privately negotiated transactions, or through a
combination of such methods at fixed prices (which may be changed), at market
prices prevailing at the time of sale, or at negotiated prices.
The Selling Shareholders, or any pledgee or other successor in interest,
may effect such transactions by selling Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders, any pledgee or other
successor in interest, or the purchasers of Shares for whom such broker-dealers
may act as agent, or to whom they sell as principal, or both (which
compensation, as to a particular broker-dealer, may be in excess of customary
commissions).The Selling Shareholders and any such underwriters, dealers or
agents that participate in the distribution of the Shares may be deemed to be
underwriters within the meaning of the Securities Act, and any profit on the
sale of the Shares by them and any discounts, commissions or concessions
received by them may be deemed to be underwriting discounts and commissions
under the Securities Act. Any such underwriters, dealers and agents may engage
in transactions with, and perform services for, the Company.
Any Shares offered hereby which qualify for sale pursuant to Rule 144 under
the Securities Act may be sold under that rule rather than pursuant to any of
the foregoing means of distribution.
- 7 -
<PAGE>
At the time a particular offer of Shares is made by the Selling
Shareholders or any pledgee or other permitted assignee or other successor in
interest, to the extent required, a Prospectus Supplement will be distributed
which will set forth the aggregate number of Shares being offered, and the terms
of the offering, including the public offering price thereof, the name or names
of any permitted assignee or other successor in interest, the name or names of
any underwriters, dealer or agents, any underwriting discounts, commissions and
other items constituting compensation from, and the resulting net proceeds to,
the Selling Shareholders or any permitted assignee or other successor in
interest, any discounts, commissions or concessions allowed or reallowed or paid
to dealers and, if applicable, the purchase price to be paid by any underwriter
for the Shares purchased from the Selling Shareholders or any permitted assignee
or other successor in interest.
Certain expenses in connection with the distribution of the Shares,
including fees and expenses of the Company's counsel and accountants, filing
fees and printing expenses, will be borne by the Company. Each Selling
Shareholder will bear his or her own legal and accounting expenses, if any, as
well as all transfer taxes, discounts, concessions, commissions or other
compensation received by broker-dealers.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 20,000,000 shares of Common Stock and up
to 5,000,000 shares of Preferred Stock, no par value ("Preferred Stock"). The
following summary of certain provisions of the Company's Amended and Restated
Articles of Incorporation and Bylaws does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all provisions of
such Amended and Restated Articles of Incorporation and Bylaws, copies of which
are filed as exhibits to this Registration Statement.
Common Stock
Each share of Common Stock has one vote Subject to the preferential rights
of holders of any then outstanding Preferred Stock, the holders of Common Stock
are entitled to receive dividends when and as declared by the Board of Directors
out of funds legally available for such payment. Holders of Common Stock have no
preemptive rights to purchase additional shares. Subject to the preferential
rights of holders of any then outstanding Preferred Stock, the holders of Common
Stock are entitled to share ratably in the assets of the Company available for
distribution to stockholders in the event of the Company's liquidation,
dissolution or winding up.
The holders of Common Stock have no cumulative voting rights in the
election of directors. The Company's Amended and Restated Articles of
Incorporation also provides that the Board of Directors be divided into two
classes of approximately equal size, with one class to be elected for a two-year
term at each annual meeting of shareholders.
- 8 -
<PAGE>
Preferred Stock
The Preferred Stock is issuable, from time to time, in one or more series,
with such designations, preferences and relative, participating, optional or
other special rights, qualifications, limitations or restrictions thereof as
shall be stated and expressed in a resolution or resolutions providing for the
issue of such series adopted by the Board of Directors. All shares of any one
series of the Preferred Stock are required to be identical in every particular
and all series are required to rank equally and be identical in all respects,
except insofar as they may vary with respect to matters which the Board is
expressly authorized by the Company's Amended and Restated Articles of
Incorporation to determine in the resolution or resolutions providing for the
issue of any series of the Preferred Stock. No assurance can be given that the
terms of any series of Preferred Stock will not materially limit or qualify the
rights of the holders of Common Stock. No shares of Preferred Stock have been
issued.
LEGALITY
Sherman & Howard L.L.C., 633 17th St., Suite 3000, Denver, Colorado 80202
has issued an opinion with respect to the legality of the issuance of the Shares
being offered pursuant to this Prospectus.
EXPERTS
The consolidated balance sheets of Columbus Energy Corp. and its subsidiary
as of November 30, 1997 and 1996, and the consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended November 30, 1997, included in the Company's Annual Report on Form 10-K
for the fiscal year ended November 30, 1997, are incorporated by reference in
this Prospectus and have been incorporated herein in reliance on the reports of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
said firm as experts in accounting and auditing.
The results of the study and report by Reed W. Ferrill & Associates, Inc.,
independent petroleum engineers and consultants, of the Company's reserves and a
separate report on the reserves of the properties located in the Berry Cox field
in Texas prepared by Huddleston & Co., Inc., another outside consulting firm,
appear in the Company's 1997 Form 10-K, are incorporated by reference in this
Prospectus and have been incorporated herein in reliance on the authority of
such firms as experts in petroleum engineering.
- 9 -
<PAGE>
This Prospectus contains information concerning the Company and its Common
Stock, but does not contain all of the information set forth in the Registration
Statement and the Exhibits relating thereto, which the Company has filed with
the Commission, Washington, D.C., under the Securities Act of 1933, and to which
reference is hereby made.
-------------------------
TABLE OF CONTENTS Page
----
AVAILABLE INFORMATION..........................................................2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................2
RISK FACTORS...................................................................3
THE COMPANY....................................................................5
SELLING SHAREHOLDERS...........................................................5
PLAN OF DISTRIBUTION...........................................................7
DESCRIPTION OF CAPITAL STOCK...................................................8
LEGALITY ....................................................................9
EXPERTS ....................................................................9
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this Prospectus or
the Prospectus Supplement and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company.
This Prospectus or the Prospectus Supplement does not constitute an offer to
sell or a solicitation of an offer to buy any of the securities offered hereby
in any jurisdiction to any person to whom it is unlawful to make such offer, or
in any jurisdiction where such solicitation is not authorized, or in which the
person making such offer or solicitation is not qualified to do so. Neither the
delivery of this Prospectus or the Prospectus Supplement nor any sale made
hereunder shall, under any circumstances, create any implication that the
information contained or incorporated by reference herein is correct as of any
time subsequent to its date or that there has been no change in the affairs of
the Company since such date.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with the issuance and distribution of
the securities being registered are as follows:
Commission Registration Fee............ $1,407.00
Legal Fees and Expenses................ 3,000.00
Accounting Fees and Expenses........... 3,000.00
Transfer Agent Fees.................... 500.00
Mailing and Miscellaneous.............. 1,000.00
---------
Total $8,907.00
=========
Item 15. Indemnification of Directors and Officers
Section 7-109-102 of the Colorado Business Corporation Act (the "Act")
provides, generally, that a corporation may indemnify a person made a party to
any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative and whether formal or informal
(a "Proceeding"), because the person is or was a director of the corporation or
an individual who, while serving as a director of the corporation, is or was
serving at the corporation's request as a director, officer, partner, trustee,
employee or fiduciary or agent of another corporation or other entity or of any
employee benefit plan (a "Director"), against any obligation incurred with
respect to a Proceeding to pay a judgment, settlement, penalty, fine (including
an excise tax assessed with respect to an employee benefit plan) or reasonable
expenses incurred in the Proceeding if he conducted himself in good faith and he
reasonably believed, in the case of conduct in an official capacity with the
corporation, his conduct was in the corporation's best interests and, in all
other cases, his conduct was at least not opposed to the corporation's best
interest and, with respect to any criminal proceedings, he had no reasonable
cause to believe that his conduct was unlawful; provided, however, a corporation
may not indemnify a Director in connection with any Proceeding by or in the
right of the corporation in which the Director was adjudged liable to the
corporation or, in connection with any other Proceeding charging the Director
derived an improper personal benefit, whether or not involving actions in an
official capacity, in which Proceeding the Director was judged liable on the
basis that he derived an improper personal benefit. Any indemnification
permitted in connection with a Proceeding by or in the right of the corporation
is limited to reasonable expenses incurred in connection with such Proceeding.
Under Section 7-109-107 of the Act, unless otherwise provided in the Articles of
Incorporation, a corporation may indemnify an officer, employee, fiduciary, or
agent of the corporation to the same extent as to a Director and may indemnify
an officer, employee, fiduciary, or agent who is not a Director to a greater
extent, if not inconsistent with public policy and if provided for by its
II-1
<PAGE>
bylaws, general or specific action of its board of directors or shareholders, or
contract.
Section 7-108-402 of the Act provides, generally, that the Articles of
Incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its shareholders for monetary
damages for breach of fiduciary duty as a director; except that any such
provision may not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its shareholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) acts specified in Section 7-108-403, or
(iv) any transaction from which a director directly or indirectly derived an
improper personal benefit. Such provision may eliminate or limit the liability
of a director for any act or omission occurring prior to the date on which such
provision becomes effective.
Article VI of the Company's Amended and Restated Articles of Incorporation
(the "Articles"), provides as follows:
1. A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach
of the director's loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 7-5-114
of the Colorado Corporation Code, or (iv) for any transaction from
which the director derived any improper personal benefit. If the
Colorado Corporation Code is amended after approval by the
stockholders of this article to authorize corporate action further
eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the Colorado Corporation
Code, as amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right
or protection of a director of the Corporation existing at the time of
such repeal or modification.
2. A. Right to Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is otherwise involved any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that
he or she 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 of another corporation or of a partnership, joint
II-2
<PAGE>
venture, trust or other enterprise, including service with respect to
employee benefit plans (hereinafter an "indemnitee"), whether the
basis of such proceeding is alleged action in an official capacity as
a director, officer, employee or agent or in any other capacity while
serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Colorado Corporation Code, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to
the extent that such amendment permits the Corporation to provide
broader indemnification rights than such law permitted the Corporation
to provide prior to such amendment), against all expense, liability
and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement), reasonably
incurred or suffered by such indemnitee in connection therewith and
such indemnification shall continue as to an indemnitee who has ceased
to be a director, officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs or personal representative;
provided, however, that except as provided in subparagraph B. hereof
with respect to proceedings to enforce rights to indemnification, the
Corporation shall indemnify any such indemnitee in connection with a
proceeding (or part thereof) initiated by such indemnitee only if such
proceeding (or part thereof) was authorized by the Board of Directors
of the Corporation. The right to indemnification conferred in this
paragraph shall be a contract right.
B. Right of Indemnitee to Bring Suit. If a claim under subparagraph A
of this paragraph is not paid in full by the Corporation within sixty
days after a written claim has been received by the Corporation,
except in the case of a claim for an advancement of expenses, in which
case the applicable period shall be twenty days, the indemnitee may at
any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim. If successful in whole or in part in any
such suit or in a suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the
indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the
indemnitee to enforce a right to indemnification hereunder (but not in
a suit brought by the indemnitee to enforce a right to an advancement
of expenses) it shall be a defense that the indemnitee has not met the
II-3
<PAGE>
the applicable standard of conduct set forth in the Colorado
Corporation Code, and (ii) any suit by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking the
Corporation shall be entitled to recover such expenses upon a final
adjudication that, the indemnitee has not met the applicable standard
of conduct set forth in the Colorado Corporation Code. Neither the
failure of the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that
indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set
forth in the Colorado Corporation Code, nor an actual determination by
the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the
case of such a suit brought by the indemnitee, be a defense to such
suit. In any suit brought by the indemnitee to enforce a right
hereunder, or by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that
the indemnitee is not entitled to be indemnified or to such
advancement of expenses under this paragraph or otherwise shall be on
the Corporation.
C. Non-Exclusivity of Rights. The rights to indemnification and to the
advancement of expenses conferred in this paragraph shall not be
exclusive of any other right which any person may have or hereafter
acquire under any statute, this Certificate of Incorporation, by-law,
agreement, vote of stockholders or disinterested directors and does
not restrict the Corporation's right to limit the personal liability
of a director to the Corporation or to its shareholders for monetary
damages for breach of fiduciary duty as a director, or any other acts
which are consistent with the provisions of the Colorado Corporation
Code as the same exists or may hereafter be amended.
The Company has entered into indemnification agreements with each person
who is a director of the Company (each director, an "indemnitee"). The
indemnification agreements provide for indemnification against any and all
damages, judgments, settlements and costs, costs of investigation and costs of
defense of legal actions, claims, or proceedings and appeals therefrom and costs
II-4
<PAGE>
of attachment or similar bonds which indemnitee becomes legally obligated to pay
because of any claim or claims made against indemnitee because of any act or
omission or neglect or breach of duty, including any actual or alleged error
misstatement or misleading statement, which he commits or suffers while acting
in his capacity as a director of the Company or of certain subsidiaries of the
Company and solely because of his being a director; and for the advancement or
reimbursement of reasonable expenses (including attorneys' fees) if the
indemnitee furnishes the Company a written affirmation of his good faith belief
he has met the standard of conduct permitting indemnification under applicable
law, the director furnishes the Company a written undertaking to repay the
advance if it is determined he did not meet such standard of conduct, and the
Company determines that the facts then known to those making the determination
will not preclude indemnification under Colorado law provided that the Company
shall not have determined that the director would not be permitted to be so
indemnified under applicable law.
In addition, the indemnification agreement provides that if the Company
determines that the director is not permitted to be indemnified, the director is
not required to reimburse the Company until a final judicial determination is
made with respect thereto as to which all rights of appeal therefrom have been
exhausted or lapsed and the Company is not obligated to indemnify or advance any
additional amounts to the director (unless there has been a determination by a
court of competent jurisdiction that the director would be permitted to be so
indemnified under applicable law). The indemnification agreements also entitle
the director to be paid the expense of prosecuting a claim against a company to
collect an indemnity claim or advancement of expenses from the Company. The
Company is not liable to make any payment under the indemnification agreement
(i) to the extent payment is actually made to the director under an insurance
policy; (ii) to the extent the director is entitled to indemnity and/or payment
under an insurance policy; (iii) to the extent the director is indemnified by
the Company otherwise than pursuant to the indemnification agreement; (iv) to
the extent such indemnity is prohibited under Colorado law, the Amended and
Restated Articles of Incorporation or other applicable law; (v) for an
accounting of profits made from the purchase or sale by the director of
securities of the Company within the meaning of Section 16(b) of the Exchange
Act and amendments thereto or similar provisions of any state statutory law or
common law; or (vi) if a court holds that such payment is prohibited by
applicable law or is against public policy.
The Company may purchase liability insurance policies covering its
directors and officers.
II-5
<PAGE>
Item 16. Exhibits
(a) Exhibits: See Exhibit Index.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
Post- Effective Amendment to this 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;
Provided, however, that paragraphs (1)(i) and (1)(ii) above do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the Registration
Statement.
2. That, for the purpose 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 section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the Registration
II-6
<PAGE>
Statement 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant 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 registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant 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
registrant 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.
II-7
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the Registrant
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 and County of Denver, State of Colorado on the 25th day
of March, 1998.
COLUMBUS ENERGY CORP.
By: /s/ Harry A. Trueblood, Jr.
----------------------------------
Harry A. Trueblood, Jr.
Chairman of the Board, President
and Chief Executive Officer
ATTEST:
/s/ H. C. Gutjahr
--------------------------------
H. C. Gutjahr, Secretary
(SEAL)
II-8
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Harry A. Trueblood, Jr. and H. C. Gutjahr, and
each of them, his true and lawful attorneys-in-fact and agents, each with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
pre-effective and post-effective amendments) to this Registration Statement, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
Principal Executive Officer
---------------------------
/s/ Harry A. Trueblood, Jr. Chairman of the
------------------------- Board
Harry A. Trueblood, Jr. March 25, 1998
Principal Financial and Accounting Officer
------------------------------------------
/s/ Ronald H. Beck Vice President March 25, 1998
-------------------------
Ronald H. Beck
Majority of Board of Directors
------------------------------
/s/ J. S. Butler Director March 25, 1998
-------------------------
J. S. Butler
/s/ W. H. Blount, Jr. Director March 25, 1998
-------------------------
W. H. Blount, Jr.
/s/ J. M. Sonosky Director March 25, 1998
-------------------------
J. M. Sonosky
/s/ Harry A. Trueblood, Jr. Director March 25, 1998
-------------------------
Harry A. Trueblook
II-9
<PAGE>
INDEX TO EXHIBITS
Exhibit No.
- -----------
4(a) Amended and Restated Articles of Incorporation (incorporated by
reference to Exhibit 3(a) to Registration Statement No. 33-17885;
Exhibit "a" to Form 10-Q dated July 13, 1990 and Exhibit 3(1)(a) to
Form 8-K dated May 11, 1995).
4(b) Amended By-Laws (incorporated by reference to Exhibit 3(B) to Form 8-K
dated February 20, 1998).
5 Opinion of Sherman & Howard L.L.C.
23(a) Consent of Coopers & Lybrand L.L.P.
23(b) Consent of Reed W. Ferrill & Associates, Inc.
23(c) Consent of Huddleston & Co., Inc.
23(d) Consent of Sherman & Howard L.L.C. (included in Exhibit 5).
24 Powers of Attorney (included in signature page of this Registration
Statement).
EXHIBIT 5
March 25, 1998
Columbus Energy Corp.
1660 Lincoln Street, Suite 2400
Denver, Colorado 80264
Re: Validity of Common Stock
Ladies and Gentlemen:
We have acted as special counsel to Columbus Energy Corp., a
Colorado corporation (the "Company"), in connection with its Registration
Statement on Form S-3 filed by the Company with the Securities and Exchange
Commission on March 27, 1998 relating to approximately 632,984 shares of the
Company's Common Stock, $.20 par value per share ("Common Stock") owned by
certain selling shareholders named in the Registration Statement (the "Selling
Shareholders") or to be acquired by the Selling Shareholders upon exercise of
outstanding options (the "Options") or pursuant to the Company's 1993 Employee
Stock Purchase Plan (the "Plan").
We have examined such documents and records, and we have made such
inquiries of officers and representatives of the Company as we have deemed
necessary to render the opinions set forth herein.
Based upon the foregoing examination, we advise you that in our
opinion:
(1) The shares of Common Stock owned by the Selling Shareholders as
of the date hereof and being offered pursuant to the Registration Statement have
been duly authorized and are validly issued, and, to our knowledge, fully paid
and nonassessable.
(2) The shares of Common Stock issuable upon exercise of the Options
have been duly authorized and reserved for issuance upon such exercise and, if
and when issued upon such exercise in accordance with the terms of the Options,
will be validly issued, fully paid and nonassessable.
(3) The shares of Common Stock issuable pursuant to the Plan have
been duly authorized and reserved for issuance pursuant to purchases made under
the Plan and, if and when
<PAGE>
Columbus Energy Corp.
March 25, 1998
Page 2
issued upon such purchase in accordance with the terms of the Plan, will be
validly issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above and to the reference to our firm under
the heading "Legal Matters" in the Registration Statement. In giving this
consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933 or the
Rules of the Securities and Exchange Commission thereunder.
Yours truly,
/s/ Sherman & Howard L.L.C.
----------------------------------
SHERMAN & HOWARD L.L.C.
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Columbus Energy Corp. on Form S-3 (File No. 1-9872) of our report dated February
11, 1998, on our audits of the consolidated financial statements of Columbus
Energy Corp. as of November 30, 1997 and 1996, and for each of the three years
in the period ended November 30, 1997, which report is included in the Columbus
Energy Corp. 1997 Annual Report on Form 10-K. We also consent to the reference
to our Firm under the caption "Experts".
/s/ Coopers & Lybrand L.L.P.
---------------------------------
COOPERS & LYBRAND L.L.P.
Denver, Colorado
March 25, 1998
EXHIBIT 23(b)
March 23, 1998
Columbus Energy Corp.
1660 Lincoln Street, Suite 2400
Denver, Colorado 80264
Reed W. Ferrill & Associates, Inc. consents to the use of its name
and its reports dated February 7, 1998 entitled "Columbus Energy Corp., Reserve
and Revenue Forecast as of November 30, 1997, Constant Prices and Costs" in
whole or in part, by Columbus Energy Corp. (Columbus) in this Form S-3 to the
Securities and Exchange Commission. We also consent to the reference to our firm
under the caption "Experts".
for and on behalf of
Reed W. Ferrill & Associates, Inc.
/s/ Reed W. Ferrill
----------------------------------------
Reed W. Ferrill
President
RWF/mlb
EXHIBIT 23(c)
March 23, 1998
Columbus Energy Corp.
1660 Lincoln Street, Suite 2400
Denver, Colorado 80264
Huddleston & Co., Inc., consents to the use of its name and its report dated
January 7, 1998, entitled "Columbus Energy Corp., Berry R. Cox Field, Estimated
Reserves and Revenues, as of November 30, 1997, Constant Product Prices and
Costs" in whole or in part by Columbus Energy Corp. (Columbus) in Columbus' Form
S-3 to the Securities and Exchange Commission. We also consent to the reference
to our firm under the caption "Experts."
For and On Behalf of
HUDDLESTON & CO., INC.
/s/ Peter D. Huddleston
----------------------------------------
Peter D. Huddleston, P.E.
President
PDH:dl
