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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 20, 1999
UNITED STATES EXPLORATION, INC.
(Exact name of Registrant as specified in its charter)
Colorado 1-13513 84-1120323
- --------------- ------------ -------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1560 Broadway, Suite 1900
Denver, Colorado 80202
--------------------------------------- ----------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (303) 863-3550
---------------
(Former name or former address, if changed since last report): N/A
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This Report amends the Registrant's Current Report dated January 20, 1999 and
filed February 2, 1999 by adding the pro forma information set forth in Item 7
below.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Pro Forma financial information. Set forth below.
INDEX TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Pro Forma Condensed Balance Sheet as of September 30, 1998.....................................................2
Pro Forma Condensed Consolidated Statement of Operations for
the Nine Months Ended September 30, 1998.......................................................................3
Pro Forma Condensed Consolidated Statement of Operations for
the Nine Months Ended December 31, 1997........................................................................4
Notes to Pro Forma Condensed Consolidated Financial Statement .................................................5
</TABLE>
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UNITED STATES EXPLORATION, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1998
<TABLE>
<CAPTION>
--Historical--
United States
Exploration, Pro Forma
Inc. Adjustments Pro Forma
<S> <C> <C> <C>
ASSETS
CASH AND CASH EQUIVALENTS $ 327,143 $ (7,391) (A) $ 319,752
OTHER CURRENT ASSETS 3,718,376 (133,406) (A) 3,584,970
PROPERTY AND EQUIPMENT, AT
COST, NET
Oil and gas property and equipment 41,888,966 (1,320,783) (A) 40,768,183
200,000 (A)
Natural gas gathering system and
other 1,886,267 (650,391) (A) 1,235,876
----------- ----------- -----------
43,775,233 (1,771,174) 42,004,059
OTHER ASSETS 1,621,295 1,621,295
----------- ----------- -----------
TOTAL ASSETS $49,442,047 $(1,911,971) $47,530,076
=========== =========== ===========
LIABILITIES
CURRENT BANK DEBT $29,000,000 $(1,825,000) (A) $27,175,000
OTHER CURRENT LIABILITIES 1,982,358 (86,971) (A) 1,895,387
----------- -----------
$30,982,358 $(1,911,971) 29,070,387
===========
STOCKHOLDERS' EQUITY
Preferred Stock-$.01 par value
Authorized-100,000,000 shares
Issued and outstanding Series C
Cumulative Convertible-573,166
shares at September 30, 1998
(liquidation preference of
$3,507,776) 3,438,996 3,438,996
Common Stock-$.0001 par value
Authorized-500,000,000 shares
Issued and outstanding-15,320,194
shares at September 30, 1998 1,532 1,532
Capital in excess of par 32,097,069 32,097,069
Accumulated Deficit (17,077,908) (17,077,908)
----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY 18,459,689 -- 18,459,689
----------- ----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $49,442,047 $(1,911,971) $47,530,076
=========== =========== ===========
</TABLE>
See the accompanying notes to the unaudited pro forma condensed consolidated
financial statements.
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UNITED STATES EXPLORATION, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
--Historical--
United States
Exploration, Pro Forma
Inc Adjustments Pro Forma
<S> <C> <C> <C>
REVENUES
Sale of purchased gas $ 661,905 $ (211,291) B $ 450,614
Sale of Company produced
oil and gas 2,471,693 (529,922) B 1,941,771
Contracting, drilling and oil
field supplies 34,406 -- 34,406
----------- ----------- -----------
3,168,004 (741,213) 2,426,791
COSTS AND EXPENSES
Gas acquisition costs 335,868 (247,283) B 88,585
Gas transportation costs 433,060 (51,324) B 381,736
Production costs - oil and gas 1,646,096 (631,077) B 1,015,019
Depreciation, depletion and
amortization 1,254,106 (172,117) B 1,081,989
General and administrative 1,485,507 (17,077) B 1,468,430
Provision for impairment
of assets 145,000 -- 145,000
----------- ----------- -----------
5,299,637 (1,118,878) 4,180,759
Loss from operations (2,131,633) (377,665) (1,753,968)
OTHER INCOME (EXPENSE)
Interest income 301,095 34,218 C 335,198
(115) B
Interest expense (853,201) 95 B (800,922)
52,184 D
Other (1985) (3,916) B (5,901)
----------- ----------- -----------
(554,091) 82,466 (471,625)
----------- ----------- -----------
NET LOSS (2,685,724) (460,131) (2,225,593)
Preferred stock dividends
applicable to period (985,353) -- (985,353)
----------- ----------- -----------
Net loss applicable to common
stockholders $(3,671,077) $ (460,131) $(3,210,946)
=========== =========== ===========
Basic and Diluted Loss per
common share $ (.33) $ (.29)
=========== ===========
Weighted average common
shares outstanding 11,015,848 11,015,848
=========== ===========
</TABLE>
See the accompanying notes to the unaudited pro forma condensed consolidated
financial statements.
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UNITED STATES EXPLORATION, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE NINE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
--Historical--
United States
Exploration, Pro Forma
Inc. Adjustments Pro Forma
<S> <C> <C> <C>
REVENUES
Sale of purchased gas $ 950,369 $ (314,524) B $ 635,845
Sale of Company produced
oil and gas 1,974,033 (964,279) B 1,009,754
Contracting, drilling and oil
field supplies 110,183 (84,164) B 26,019
------------ ----------- -------------
3,034,585 (1,362,967) 1,671,618
COSTS AND EXPENSES
Gas acquisition costs 673,831 (111,718) B 562,113
Gas transportation costs 416,921 (45,166) B 371,755
Production costs - oil and gas 1,337,789 (982,555) B 355,234
Depreciation, depletion and
amortization 1,765,475 (1,100,247) B 665,228
Provision for impairment
of assets 6,320,401 (2,087,734) B 4,232,667
General and administrative 841,193 (19,396) B 821,797
------------ ----------- -------------
11,355,610 (4,346,816) 7,008,794
Loss from operations (8,321,025) (2,983,849) (5,337,176)
OTHER INCOME (EXPENSE)
Interest income 677,488 68,437 C 745,925
Interest expense (2,092) 1,579 B (513)
Other 60,826 (28,169) B 32,657
------------ ----------- -------------
736,222 41,847 778,069
------------ ----------- -------------
NET LOSS (7,584,803) (3,025,696) (4,559,107)
Preferred stock dividends
applicable to period (1,421,226) -- (1,421,226)
Net loss applicable to common
stockholders $(9,006,029) $(3,025,696) $(5,980,333)
=========== =========== ===========
Basic and Diluted Loss per
common share $ (1.05) $ (.70)
=========== ===========
Weighted average common
shares outstanding 8,487,667 8,487,667
=========== ===========
</TABLE>
See the accompanying notes to the unaudited pro forma condensed consolidated
financial statements.
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UNITED STATES EXPLORATION, INC.
Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements
1. GENERAL
The accompanying Unaudited Pro Forma Condensed Consolidated Financial Statements
reflect the historical financial position and results of operations of United
States Exploration, Inc. (the "Company") adjusted to give effect to the
disposition effective as of December 1998 of three subsidiaries of the Company
being Pacific Osage, Inc., ("Pacific"), Performance Petroleum Corporation
("Performance") and United States Gas Gathering Co., Inc. ("USGG") and the
application of the net proceeds therefrom. Oil and gas properties owned by
Performance and located in Logan, Noble and Kay Counties, Oklahoma were
transferred to the Company before the sale of Performance. The significant
assets owned by Performance, Pacific and USGG consisted of approximately 100
marginal stripper wells in Osage County, Oklahoma and interests in two gathering
systems associated with those wells. The Unaudited Pro Forma Condensed
Consolidated Financial Statements are based on the historical financial
statements of the Company and the separate books and records of each subsidiary
which was sold.
The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30,
1998 assumes the disposition of the subsidiaries and the use of the proceeds to
pay down bank debt had been completed on that date. The Unaudited Pro Forma
Condensed Consolidated Statements of Operations for the nine months ended
September 30, 1998 and the nine months ended December 31, 1997 have been
prepared assuming the disposition of the subsidiaries had been completed at the
beginning of the periods presented.
The pro forma adjustments are based upon available information and assumptions
that management of the Company believes are reasonable. The Unaudited Pro Forma
Condensed Consolidated Financial Statements do not purport to represent the
financial position or results of operations which would have occurred had such
transactions been consummated on the dates indicated or the Company's financial
position or results of operations for any future date or period. These Unaudited
Pro Forma Condensed Consolidated Financial Statements and notes thereto should
be read in conjunction with the Company's historical financial statements and
the notes thereto.
2. PRO FORMA ADJUSTMENTS
The accompanying Unaudited Pro Forma Condensed Consolidated Financial Statements
reflect the following pro forma adjustments related to the disposition of the
three subsidiaries.
(A) Record cost of the assets and liabilities of the three subsidiaries
sold, the use of the $1,825,000 in proceeds to pay down bank debt and
the adjustment to the Company's oil and gas property and equipment full
cost pool. Based upon the Company's preliminary January
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<PAGE> 7
1, 1999 reserve study, it is expected that the estimated $200,000 pro
forma adjustment to the Company's oil and gas property and equipment
full cost pool will be substantially reduced by December 31, 1998 due
to depletion, depreciation and amortization in the fourth quarter of
1998.
<TABLE>
<CAPTION>
Total Pro Forma
Adjustments
<S> <C>
Assets Disposed of
Cash $ 7,391
Other Current Assets 133,406
Oil and Gas Properties and Equipment 1,320,783
Natural gas gathering system and other 650,391
-------------
2,111,971
Less liabilities disposed of 86,971
-------------
Net assets disposed of $ 2,025,000
=============
Cash Proceeds applied to bank debt 1,825,000
Loss on sale charged to the Company's oil and gas property and equipment
full cost pool which is expected to be expensed as additional depletion,
depreciation and amortization in the fourth quarter of 1998 200,000
-------------
$ 2,025,000
=============
</TABLE>
(B) Remove revenues and expenses of the properties sold.
(C) Record interest income related to the receipt of the $1,825,000 in
proceeds at an estimated rate of 5% per annum for the period April 1,
1997 through December 31, 1997.
(D) Record interest income related to the receipt of the $1,825,000 in
proceeds at an estimated rate of 5% per annum for the period January 1,
1998 through May 15, 1998 and record a reduction of interest expense
related to the $1,825,000 in proceeds at 7.625% per annum for the
period May 16, 1998 through September 30, 1998.
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SIGNATURE
Pursuant to the requirement of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to its
Current Report on Form 8-K to be signed on its behalf by the undersigned
thereunto duly authorized.
UNITED STATES EXPLORATION, INC.
Date: March 18, 1999 By: /s/ F. Michael Murphy
---------------------------------
F. Michael Murphy, Vice President
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