<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): DECEMBER 12, 1995
CLIFFS DRILLING COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-16703 76-0248934
(Commission File Number) (I.R.S. Employer Identification No.)
1200 Smith Street, Suite 300
Houston, Texas 77002
(Address of Principal Executive Offices) (Zip Code)
(713) 651-9426
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
(EXHIBIT INDEX LOCATED ON PAGE 4)
PAGE 1 OF 8 PAGES
================================================================================
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 14, 1995, the Company was advised that it will be paid $14.6
million by its insurance underwriters for damages to the jackup drilling rig
MARQUETTE resulting from an earthquake in Lake Maracaibo, Venezuela in May,
1994. The Company will not repair the rig, but plans to dispose of the
salvage. The Company expects to record a net gain after taxes of approximately
$1.6 million related to this incident. A copy of the related press release is
attached hereto as Exhibit 99.1.
ITEM 5. OTHER EVENTS.
$2.3125 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK REDEMPTION
On December 19, 1995, the Company announced that all of the 1,150,000 issued
and outstanding shares of the Company's $2.3125 Convertible Exchangeable
Preferred Stock, no par value ("Preferred Stock"), will be redeemed by the
Company on January 17, 1996 (the "Redemption Date"), for cash in the amount of
$25.69 per share plus $0.218403 per share in accrued and unpaid dividends
thereon through the Redemption Date. A copy of the Notice of Redemption dated
December 20, 1995 is attached hereto as Exhibit 99.2.
Holders of shares of Preferred Stock may elect to convert any or all of such
shares of Preferred Stock into fully paid and nonassessable shares of Common
Stock, $0.01 par value ("Common Stock"), of the Company, at any time prior to
the close of business on the Redemption Date, at the rate of 1.89394 shares of
Common Stock for each full share of Preferred Stock. No payment or adjustment
shall be made upon any conversion of any share of Preferred Stock on account of
any dividends on the shares surrendered for conversion, and the holder will
lose any right to payment of dividends on the shares surrendered for
conversion. No fractional shares of Common Stock will be issued upon
conversion but, in lieu thereof, an appropriate amount will be paid in cash by
the Company based upon the reported last sales price for the shares of Common
Stock on the date of conversion. The right of holders of Preferred Stock to
convert shares of Preferred Stock into Common Stock will terminate at the close
of business on the Redemption Date.
JACKUP RIG LANGLEY BAREBOAT CHARTER
On December 12, 1995, the Company announced that the jackup rig LANGLEY has
been bareboat chartered to Sedco Forex International, Inc. ("Sedco") for a
five-year term for use as a mobile offshore production unit offshore Nigeria.
The rig will be mobilized to Nigeria in midyear 1996 following modifications.
This contract is expected to generate annual earnings of approximately $0.20
per share after taxes during the term of the charter. Sedco has an option to
purchase the rig at the end of the contract. A copy of the related press
release is attached hereto as Exhibit 99.3.
2
<PAGE> 3
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED HEREUNTO DULY AUTHORIZED.
CLIFFS DRILLING COMPANY
Date: December 22, 1995 By: /s/ Edward A. Guthrie
------------------ --------------------------
Edward A. Guthrie
Vice President - Finance
Date: December 22, 1995 By: /s/ Cindy B. Taylor
------------------ ---------------------------
Cindy B. Taylor
Corporate Controller
3
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<S> <C>
99.1 Press Release Dated December 14, 1995
99.2 Notice of Redemption Dated December 20, 1995
99.3 Press Release Dated December 12, 1995
</TABLE>
<PAGE> 1
EXHIBIT 99.1
CLIFFS NEWS RELEASE
DRILLING COMPANY DATE: December 14, 1995
1200 SMITH STREET, SUITE 300 CONTACT: EDWARD A. GUTHRIE
HOUSTON, TEXAS 77002 VICE PRESIDENT-FINANCE
PHONE: (713) 651-9426
================================================================================
Houston, Texas, (December 14, 1995) - - Cliffs Drilling Company
(NASDAQ:CLDR) today announced that it will be paid $14.6 million by its
insurance underwriters for damages to the jackup drilling rig MARQUETTE
resulting from an earthquake in Lake Maracaibo, Venezuela in May, 1994. The
Company will not repair the rig, but plans to dispose of the salvage. The
Company expects to record a net gain after taxes of approximately $1.6 million
related to this incident.
Cliffs Drilling Company is an international oil service and
engineering company engaged in providing contract drilling services on both a
turnkey and daywork basis, mobile offshore production units and well
engineering and management services.
* * * * *
Page 1 of 1
<PAGE> 1
EXHIBIT 99.2
CLIFFS
DRILLING COMPANY
1200 SMITH STREET, SUITE 300
HOUSTON, TEXAS 77002
(713) 651-9426
NOTICE OF REDEMPTION
December 20, 1995
TO: The Holders of Cliffs Drilling Company
$2.3125 Convertible Exchangeable Preferred Stock
Redemption Date: January 17, 1996
Conversion Privilege Expires January 17, 1996
Cliffs Drilling Company (the "Company") hereby gives notice that all
of the 1,150,000 issued and outstanding shares of the Company's $2.3125
Convertible Exchangeable Preferred Stock, no par value ("Preferred Stock"),
will be redeemed by the Company on January 17, 1996 (the "Redemption Date"),
for cash in the amount of $25.69 per share plus $.218403 per share in accrued
and unpaid dividends thereon through the Redemption Date (the "Redemption
Price"), pursuant to the provisions of the Company's Certificate of
Incorporation, as amended, and the Certificate of Designations of $2.3125
Convertible Exchangeable Preferred Stock (the "Designation Certificate"), and
in accordance with resolutions of its Board of Directors.
Payment of the Redemption Price will be made in Cleveland, Ohio by the
transfer agent and registrar for the Company's Preferred Stock, Society
National Bank, c/o KeyCorp Shareholders Services, Inc. (the "Paying Agent").
Payment of the Redemption Price will be made as soon as practicable after the
Redemption Date upon presentation and surrender of shares of Preferred Stock to
the Paying Agent, at 700 Louisiana Street, Suite 2620, Houston, Texas
77002-2729 in accordance with the Redemption Transmittal Letter enclosed
herewith.
From and after the Redemption Date, (i) dividends with respect to the
Preferred Stock shall cease to accrue, (ii) the Preferred Stock shall no longer
be deemed outstanding, (iii) the holders of Preferred Stock shall cease to be
stockholders with respect to Preferred Stock, and (iv) all rights whatsoever
with respect to the Preferred Stock (except the right of holders of Preferred
Stock to receive the Redemption Price without interest upon surrender of their
certificates therefor) shall terminate.
Holders of shares of Preferred Stock may elect to convert any or all
of such shares of Preferred Stock into fully paid and nonassessable shares of
common stock, $0.01 par value ("Common Stock"), of the Company, at any time
prior to 5:00 p.m., Central Time, on the Redemption Date, at the rate of
1.89394 shares of Common Stock for each full share of Preferred Stock. No
payment or adjustment shall be made upon any conversion of any share of
Preferred Stock on account of any dividends on the shares surrendered for
conversion, and the holder will lose any right to payment of dividends on the
shares surrendered for conversion. No fractional shares of Common Stock will be
issued upon conversion but, in lieu thereof, an appropriate amount will be paid
in cash by the Company based upon the reported last sales price for the shares
of Common Stock on the date of conversion. The right of holders of Preferred
Stock to convert shares of Preferred Stock into Common Stock will terminate at
5:00 p.m., Central Time, on the Redemption Date.
<PAGE> 2
CLIFFS
DRILLING COMPANY
A Redemption Transmittal Letter is enclosed for use in surrendering
shares of Preferred Stock for redemption, and an Irrevocable Written Notice of
Election to Convert is enclosed for use in surrendering shares of Preferred
Stock for conversion. The Redemption Transmittal Letter and the Irrevocable
Written Notice of Election to Convert each contain instructions with respect to
redemption or conversion, as applicable, that should be read and followed
carefully. The Redemption Transmittal Letter or the Irrevocable Written Notice
of Election to Convert, as applicable, must be properly completed, signed and
dated. Certificates representing the Preferred Stock may be submitted pursuant
to the Redemption Transmittal Letter or the Irrevocable Written Notice of
Election to Convert either by mail or by hand delivery to the Paying Agent at
its address set forth therein. The method of delivery is at the option and risk
of the holder of Preferred Stock. If forwarded by mail, the Company strongly
recommends that certificates be sent by registered mail, properly insured with
return receipt requested.
In the event that shares of Preferred Stock are to be surrendered for
conversion, the Irrevocable Written Notice of Election to Convert, together
with share certificates and other instruments described therein, must be
received by the Paying Agent prior to 5:00 p.m., Central Time, on January 17,
1996. All shares of Preferred Stock with respect to which the Paying Agent has
not received an Irrevocable Written Notice of Election to Convert, together
with share certificates and other instruments described therein, prior to 5:00
p.m., Central Time, on January 17, 1996 will automatically be redeemed by the
Company as set forth herein.
The Company believes that under present Federal income tax laws, no
taxable gain or loss will be recognized by holders of Preferred Stock upon
conversion of the Preferred Stock into Common Stock, except for cash received
in lieu of fractional shares. Gain or loss will generally be recognized by
holders of Preferred Stock upon redemption of their Preferred Stock. The
foregoing information represents only a summary of applicable law. Holders of
Preferred Stock should consult their own tax advisors as to the tax
consequences applicable to them upon either conversion or redemption of the
Preferred Stock.
Any questions regarding the redemption or conversion of the Preferred
Stock, or requests for additional copies of the Redemption Transmittal Letter
or the Irrevocable Written Notice of Election to Convert, should be directed to
Georgeson & Company at (800) 223-2064 [or (212) 440-9800 for banks and
brokers].
Thank you for your continued interest in and support of Cliffs
Drilling Company.
Sincerely,
/s/ DOUGLAS E. SWANSON
Douglas E. Swanson
President and Chairman of the Board
<PAGE> 1
EXHIBIT 99.3
CLIFFS NEWS RELEASE
DRILLING COMPANY DATE: December 12, 1995
1200 SMITH STREET, SUITE 300 CONTACT: EDWARD A. GUTHRIE
HOUSTON, TEXAS 77002 VICE PRESIDENT-FINANCE
PHONE: (713) 651-9426
================================================================================
Houston, Texas, (December 12, 1995) - - Cliffs Drilling Company
(NASDAQ:CLDR) today announced that the jackup rig LANGLEY has been bareboat
chartered to Sedco Forex International, Inc. ("Sedco") for a five - year term
for use as a mobile offshore production unit offshore Nigeria. The rig will be
mobilized to Nigeria in midyear 1996 following modifications. This contract is
expected to generate annual earnings of approximately $0.20 per share after
taxes during the term of the charter. Sedco has an option to purchase the rig
at the end of the contract.
Cliffs Drilling Company is an international oil service and
engineering company engaged in providing contract drilling services on both a
turnkey and daywork basis, mobile offshore production units and well
engineering and management services.
* * * * *
Page 1 of 1
