SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
May 21, 1996
Date of Report (Date of earliest event reported)
MAGNUM PETROLEUM, INC.
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(Exact name of registrant as specified in its charter)
Nevada
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(State or other jurisdiction of incorporation)
1-12508 87-0462881
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(Commission File Number) (IRS Employer Identification No.)
600 East Las Colinas Boulevard, Suite 1200, Irving, Texas 75039
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(Address of principal executive offices) (Zip Code)
(214) 401-0752
Registrant's telephone number, including area code
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(Former name or former address, if changed since last report)
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Item 5. Other Matters.
On May 21, 1996, the Registrant announced that a newly formed wholly-owned
subsidiary, ConMag Energy Corporation ("ConMag"), has executed a definitive
Purchase and Sale Agreement with Meridian Oil Inc. ("Meridian"), a wholly-owned
subsidiary of Burlington Resources Inc. (NYSE - "BR"), to acquire all of
Meridian's interest in certain gas wells and a gas gathering system located in
the Panhandle of Texas and Western Oklahoma, more commonly referred to as the
"Panoma Properties".
The purchase price for the approximately 500 wells and approximately 427 miles
of gas gathering pipeline system is $36,750,000, with an April 1, 1996 effective
date. The current daily production volumes from the Meridian owned wells is
approximately 14 million cubic feet per day with total delivery, including third
party gas purchased by the gathering system, of almost 19 million cubic feet per
day. The existing wells and gas gathering system are in three fields, the West
Panhandle Field, the East Panhandle Field, and the South Erick Field, all
located in Gray, Wheeler, Collingsworth and Donley Counties, Texas and Beckham
and Greer Counties, Oklahoma.
The Registrant has made a performance deposit of $2,250,000 with Meridian until
financial closing of the transaction is completed, presently anticipated on or
before June 28, 1996. The sale by Meridian is subject to the approval of the
Board of Directors of its parent company, Burlington Resources Inc.
Additionally, the Registrant will be conducting a complete due diligence review
which will include accounting, title, and environmental inspections. At closing,
the Registrant's wholly-owned subsidiary, Gruy Petroleum Management Co., will
become the operator of all wells, the gas gathering pipeline system, and
associated assets.
The Registrant's Press Release, dated May 21, 1996, is hereby incorporated by
reference as if fully set forth at length.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press Release dated May 21, 1996
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MAGNUM PETROLEUM, INC.
By: /s/ Gary C.Evans
Gary C. Evans
President and CEO
Dated: May 23, 1996
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EXHIBIT INDEX
Exhibit Sequentially
Number Numbered Page
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99.1 Press Release dated May 21, 1996 5
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EXHIBIT 99.1
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[GRAPHIC OMITTED]
Magnum Petroleum, Inc.
600 East Las Colinas Blvd., Suite 1200, Irving, TX 75039
Phone (214) 401-0752 Fax (214) 401-3110
Internet Address: http://www.magnumhunter.com
FOR IMMEDIATE RELEASE
American Stock Exchange
o Common MPM
o Preferred MPM.PR
o Warrants MPM.WS
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MAGNUM ANNOUNCES MAJOR ACQUISITION
Irving, Texas, May 21, 1996, Magnum Petroleum, Inc. ("Magnum") announced today
that a newly formed wholly-owned subsidiary, ConMag Energy Corporation
("ConMag"), has executed a definitive Purchase and Sale Agreement with Meridian
Oil Inc. ("Meridian"), a wholly-owned subsidiary of Burlington Resources Inc.
(NYSE - "BR"), to acquire all of Meridian's interest in certain gas wells and a
gas gathering system located in the Panhandle of Texas and Western Oklahoma,
more commonly referred to as the "Panoma Properties".
The purchase price of approximately 500 wells and approximate 427 miles of gas
gathering pipeline system is $36,750,000, with an April 1, 1996 effective date.
The current daily production volumes from the Meridian owned wells is
approximately 14 million cubic feet per day with total delivery, including third
party gas purchased by the gathering system, of almost 19 million cubic feet per
day. The existing wells and gas gathering system are in three fields, the West
Panhandle Field, the East Panhandle Field, and the South Erick Field, all
located in Gray, Wheeler, Collingsworth and Donley Counties, Texas and Beckham
and Greer Counties, Oklahoma.
Magnum has made a performance deposit of $2,250,000 with Meridian until
financial closing of the transaction is completed, presently anticipated on or
before June 28, 1996. The sale by Meridian is subject to the approval of the
Board of Directors of its parent company, Burlington Resources Inc.
Additionally, Magnum will be conducting a complete due diligence review which
will include accounting, title, and environmental inspections. At closing,
Magnum's wholly-owned subsidiary, Gruy Petroleum Management Co., will become the
operator of all wells, the gas gathering pipeline system, and associated assets.
Commenting on this significant event, Mr. Gary C. Evans, President and Chief
Executive Officer of Magnum, stated "Completion of this acquisition will have a
material positive impact on the Company's operations for many years to come.
These properties have an estimated reserve life in excess of 40 years as
projected by third party consultants. They will become the foundation of our
Company, representing the single largest asset. We take great pride in the fact
that our management, our business partners, including ConFed Oil Incorporated of
Tulsa, Oklahoma, and the commercial banks involved in this transaction have all
jointly succeeded in negotiating such a significant acquisition of premium gas
reserves within such a short period of time. The strategic location of these
properties with regard to accessability into major interstate pipelines will
allow the Company in the future to negotiate directly with natural gas end users
who are seeking stable long-term supplies for their manufacturing plants,
cogeneration projects and gas utility consumers."
Magnum Petroleum, Inc. is an exploration and development company which, in
combination with the recently acquired Hunter Resources, Inc. subsidiaries, is
now engaged in four principal activities: (1) the acquisition, production and
sale of crude oil, condensate and natural gas; (2) the gathering, transmission
and marketing of natural gas; (3) the managing and operating of producing oil
and natural gas properties for interest owners; and (4) providing consulting and
U.S. export services to facilitate Latin American trade in energy products.
Statements in this release looking forward in time involve known and unknown
risks and uncertainties, which may cause the Company's actual results in future
periods to be materially different from any future performance suggested in this
release. Such factors may include, but may not be necessarily limited to,
changes in the prices received by the Company for crude oil and natural gas. In
addition, the Company's future crude oil and natural gas production is highly
dependent upon the Company's level of success in acquiring or finding additional
reserves. Further, the Company operates in an industry sector where securities
values are highly volatile and may be influenced by economic and other factors
beyond the Company's control. In the context of forward-looking information
provided for in this release, reference is made to the discussion of risk
factors detailed in the Company's filings with the Securities and Exchange
Commission during the past 12 months.
FOR FURTHER INFORMATION CONTACT: MATTHEW LUTZ (214) 401-0752
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