<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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) January 21, 2000
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(January 7, 2000)
WESTERN GAS RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-10389 84-1127613
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
12200 N. Pecos Street Denver, Colorado 80234-3439
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(Address of principal executive offices) (Zip Code)
(303) 452-5603
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(Registrant's telephone number, including area code)
No Changes
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(Former name or former address, if changed since last report).
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 7, 2000, we sold our 69% working interest in the Black Lake Unit to
Exco Resources, Inc. The Black Lake Unit is located in Louisiana and includes a
processing and treating facility and an interest in the producing properties
serviced by this facility. The Black Lake processing and treating facility
consists of a 75 MMcf/D plant with 56 miles of associated gathering. This
facility averaged gas throughput volumes of 11 MMcf/D in the nine months ended
September 30, 1999. The sales price was $7.8 million, subject to final
accounting adjustment. We will realize a pre-tax loss on this sale of
approximately $6.5 million in the fourth quarter of 1999. The proceeds received
from this transaction were used to reduce outstanding debt.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro Forma Financial Information.
The sale of the Black Lake Unit qualifies as the disposition of a significant
subsidiary under Rule 11-01 of Regulation S-X. The Pro Forma financial
information required to be filed related to this disposition is combined with
other transactions that occurred in 1999 which also required Pro Forma
presentation. The Pro Forma financial statements reflecting the sales of the
Katy Storage Facility and Giddings gas gathering system in April 1999, and the
sale of the MiVida treating facility and the issuance of $155.0 million 10%
senior subordinated notes in June 1999 were previously filed with the Commission
on a Current Report on Form 8-K/A in July 1999 and in a prospectus on
Form 424 B3 in October 1999.
The accompanying Pro Forma Consolidated Statements of Operations for the nine
months ended September 30, 1999 and for the year ended December 31, 1998 give
effect to the sale of the Black Lake Unit, along with the sales of Katy,
Giddings, MiVida and the issuance of the senior subordinated notes. The Pro
Forma Consolidated Balance Sheet as of September 30, 1999 only reflects the sale
of the Black Lake Unit. The other transactions were completed prior to this date
and are included in the historical financial information as of
September 30, 1999.
The Pro Forma Consolidated Statements of Operations comprise historical
financial data which has been retroactively adjusted to reflect the effect of
the above transactions on our historical consolidated statements of operations.
The pro forma information assumes that the transactions for which pro forma
effects are shown were completed on September 30, 1999 for the Pro Forma
Consolidated Balance Sheet and on January 1, 1999 and 1998 for the Pro Forma
Consolidated Statements of Operations. Such pro forma information should be read
in conjunction with the related historical financial information and is not
indicative of the results which would actually have occurred had the
transactions been in effect on the dates or for the period indicated or which
may occur in the future.
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PRO FORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
As of September 30, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Black Lake
ASSETS Historical Adjustment (4) Pro Forma
------------------------------------------------------
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 5,472 $ - $ 5,472
Trade accounts receivable, net 220,069 - 220,069
Product inventory 30,031 - 30,031
Parts inventory 9,952 - 9,952
Other - -
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Total current assets 265,524 - 265,524
Property and equipment:
Gas Gathering, processing, storage and transmission 789,353 - 789,353
Oil and gas properties and equipment 153,957 (60,182) 93,775
Construction in progress 47,343 - 47,343
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990,653 (60,182) 930,471
Accumulated depreciation, depletion and amortization (297,628) 46,941 (250,687)
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Total property and equipment, net 693,025 (13,241) 679,784
Other Assets:
Gas Purchase Contracts 37,390 - 37,390
Other 42,602 - 42,602
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Total other assets 79,992 - 79,992
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Total assets $1,038,541 $(13,241) $1,025,300
======================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 244,253 - $ 244,253
Accrued expenses 26,979 - 26,979
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Dividends payable 4,217 - 4,217
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Total current liabilities 275,449 - 275,449
Long-term debt (senior) 214,333 $ (6,840) 207,493
Long-term debt (subordinated) 155,000 - 155,000
Deferred income taxes payable 38,816 (2,324) 36,492
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Total liabilities 683,598 (9,164) 674,434
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Stockholders equity 354,943 (4,077) 350,866
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Total liabilities and stockholders equity $1,038,541 $(13,241) $1,025,300
======================================================
</TABLE>
<PAGE>
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the nine months ended September 30,1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Giddings Katy MiVida
Historical Adjustment (1) Adjustment(2) Adjustment (3))
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<S> <C> <C> <C> <C>
Revenues:
Sale of gas $1,107,734 $ (9,062) $ - $(2,730)
Sale of natural gas liquids 237,514 (2,967) - (13)
Processing, transportation and storage revenue 36,118 (996) (3,518) (605)
Other, net (11,844) 6,605 16,659 (1,187)
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Total Revenues 1,369,522 (6,420) 13,141 (4,535)
Costs and expenses:
Product purchases 1,251,424 (10,797) (18) (2,481)
Plant operating expense 50,615 (1,179) (470) (540)
Oil and gas exploration and production costs 6,029 - - -
Depreciation, depletion and amortization 37,850 (36) (1,127) (323)
Selling and Administrative expense 21,711 - - -
Interest expense 25,118 (1,863) (5,779) (621)
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Total costs and expenses 1,392,747 (13,875) (7,394) (3,965)
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Income(loss) before income taxes (23,225) 7,455 20,535 (570)
Provision (benefit) for income taxes (8,450) 2,684 7,393 (205)
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Net income(loss) before extraordinary items (14,775) 4,771 13,142 (365)
=============================================================
Extraordinary charge for early extinguishment of debt net of (1,107) - - -
tax benefit
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Net Income (loss) (15,882) 4,771 13,142 (365)
<CAPTION>
Black Lake Debt
justment (4) Adjustment(5) Pro Forma
------------------------------------------
<S> <C> <C> <C>
Revenues:
Sale of gas $(2,260) $ - $1,093,682
Sale of natural gas liquids (1,599) - 232,935
Processing, transportation and storage revenue - - 30,999
-
Other, net (339) - 9,894
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Total Revenues (4,198) - 1,367,510
Costs and expenses:
Product purchases - - 1,238,128
Plant operating expense (1,491) - 46,935
Oil and gas exploration and production costs (355) - 5,674
Depreciation, depletion and amortization (2,920) - 33,444
Selling and Administrative expense - - 21,711
Interest expense (354) 3,993 20,494
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Total costs and expenses (5,120) 3,993 1,366,386
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Income(loss) before income taxes 922 (3,993) 1,124
Provision (benefit) for income taxes 332 (1,437) 317
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Net income(loss) before extraordinary items 590 (2,556) 807
==========================================
Extraordinary charge for early extinguishment of debt
net of tax benefit - 1,107 -
------------------------------------------
Net Income (loss) 590 (1,449) 807
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Preferred stock requirements 7,829 7,829
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Income (loss) attributable to common stock $ (23,711) $ 4,771 $13,142 $(365) 590 $(1,449) $ (7,022)
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Earnings (loss) per share of common stock (6) $ (0.74) $ (0.22)
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</TABLE>
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PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the year ended December 31,1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Giddings Katy MiVida
Historical Adjustment (1) Adjustment (2) Adjustment (3)
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<S> <C> <C> <C> <C>
Revenues
Sale of gas $1,611,521 $(38,859) $ - $(4,188)
Sale of natural gas liquids 449,696 (8,134) - (28)
Processing, transportation and storage revenue 44,743 (193) (15,980) (2,360)
Sale of electric power 20 - - -
Other, net 27,586 - - -
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Total Revenues 2,133,566 (47,186) (15,980) (6,576)
Costs and expenses:
Product purchases 1,914,303 (40,540) (426) (3,664)
Plant operating expense 85,353 (4,485) (6,429) (1,654)
Oil and gas exploration and production costs 7,996 - - -
Depreciation, depletion and amortization 59,346 (3,330) (3,620) (765)
Selling and Administrative expense 30,128 - - -
Interest expense 33,616 (2,232) (6,924) (744)
Loss on the impairment of property and equipment 108,447 - - -
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Total costs and expenses 2,239,189 (50,587) (17,399) (6,827)
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Income(loss) before income taxes (105,623) 3,401 1,419 251
Provision (benefit) for income taxes (38,418) 1,224 511 90
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Net income(loss) (67,205) 2,177 908 161
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Preferred stock requirements 10,439 - - -
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<CAPTION>
Black Lake Debt Pro Forma
Adjustment (4) Adjustments (5)
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<S> <C> <C> <C>
Revenues
Sale of gas $ (3,735) $ - $1,564,739
Sale of natural gas liquids (2,335) - 439,199
Processing, transportation and storage revenue (435) - 25,775
Sale of electric power - - 20
Other, net - - 27,586
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Total Revenues (6,505) - 2,057,319
Costs and expenses:
Product purchases 1,869,673
Plant operating expense (2,441) - 70,344
Oil and gas exploration and production costs (534) - 7,462
Depreciation, depletion and amortization (3,700) - 47,931
Selling and Administrative expense - - 30,128
Interest expense (424) 5,324 28,616
Loss on the impairment of property and equipment (28,846) - 79,601
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Total costs and expenses (35,945) 5,324 2,133,755
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Income(loss) before income taxes 29,440 (5,324) (76,436)
Provision (benefit) for income taxes 10,598 (1,917) (27,912)
----------------------------------------------------
Net income(loss)
18,842 (3,407) (48,524)
====================================================
Preferred stock requirements - - 10,439
----------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Income (loss) attributable to common stock $ (77,644) $ 2,177 $ 908 $ 161
============================================================
Earnings (loss) per share of common stock (6) $ (2.42)
============
<CAPTION>
<S> <C> <C> <C> <C>
Income (loss) attributable to common stock $ 18,842 $ (3,407) $(58,963)
============================================================
Earnings (loss) per share of common stock (6) $ (1.83)
======== ======== =======
</TABLE>
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(1) The actual results of operations achieved by the Giddings facility during
the year ended December 31, 1998 and the nine months ended September 30, 1999
are reversed to reflect the sale of this asset as if the sale had occurred on
January 1, 1998 and 1999 for the statements of operations. The proceeds
received from the sale of this facility of $36.0 million were used to reduce
long-term debt and interest expense at our weighted average interest rate on the
Revolving Credit Facility of 6.2% for the year ended December 31, 1998 and 6.9%
for the nine months ended September 30, 1999, respectively. The pre-tax loss of
approximately $6.6 million recognized on this transaction is reversed as a non-
continuing item in the nine months ended September 30, 1999.
(2) The actual results of operations achieved by the Katy facility during the
year ended December 31, 1998 and the nine months ended September 30, 1999 are
reversed to reflect the sale of this asset as if the sale had occurred on
January 1, 1998 and 1999 for the statements of operations. The Katy facility
was sold for gross proceeds of $100.0 million. In conjunction with this sale, we
sold approximately 5.1 Bcf of stored gas in the Katy facility for approximately
$11.7 million which approximated our cost of the inventory. The combined
proceeds received from the sale of this facility and the inventory were used to
reduce long-term debt and interest expense at our weighted average interest rate
on the Revolving Credit Facility of 6.2% for the year ended December 31, 1998
and 6.9% for the nine months ended September 30, 1999, respectively. The pre-
tax loss of approximately $16.6 million recognized on this transaction is
reversed as a non-continuing item in the nine months ended September 30, 1999.
(3) The actual results of operations achieved by the MiVida facility during
the year ended December 31, 1998 and the nine months ended September 30, 1999
are reversed to reflect the sale of this asset as if the sale had occurred on
January 1, 1998 and 1999 for the statements of operations. The proceeds
received from the sale of this facility of $12.0 million were used to reduce
long-term debt and interest expense at our weighted average interest rate on the
Revolving Credit Facility of 6.2% for the year ended December 31, 1998 and 6.9%
for the nine months ended September 30, 1999, respectively. The pre-tax gain of
approximately $1.2 million recognized on this transaction is reversed as a non-
continuing item in the nine months ended September 30, 1999.
(4) The actual results of operations achieved by the Black Lake Unit during
the year ended December 31, 1998 and the nine months ended September 30, 1999
are reversed to reflect the sale of this asset as if the sale had occurred on
January 1, 1998 and 1999 for the statements of operations. The sale of the Black
Lake Unit for gross proceeds of $7.8 million is assumed to result in a net
after-tax loss of approximately $4.1 million, subject to final accounting
adjustment, in the fourth quarter of 1999. This loss is reflected as a reduction
of equity on the Pro
<PAGE>
Forma Consolidated Balance Sheet only as it is a non-continuing item. The
proceeds received from the sale of this facility were used to reduce long-term
debt and interest expense at our weighted average interest rate on the Revolving
Credit Facility of 6.2% for the year ended December 31, 1998 and 6.9% for the
nine months ended September 30, 1999, respectively.
(5) The net proceeds of the sale of $155.0 million aggregate principal amount
of senior subordinated notes maturing in 2009 ("Notes") of $150.0 million were
used in part to repay $33.3 million of indebtedness under the Master Shelf
agreement. The pro formas assume the sale of the Notes had occurred on January
1, 1998 and 1999 for the statements of operations and reflect interest on the
Notes at the rate of 10% per annum. In connection with the prepayment of the
indebtedness under the Master Shelf, we incurred an after-tax extraordinary
loss on the early extinguishment of debt of approximately $1.1 million. This
loss is reversed as a non-continuing adjustment in the nine months ended
September 30, 1999. The remaining proceeds from the offering of Notes of $114.9
million were used to repay a portion of the outstanding indebtedness under the
Revolving Credit Facility.
(6) The weighted average shares of common stock outstanding for the nine
months ended September 30, 1999 and the year ended December 31, 1998 were
32,148,699 and 32,147,354, respectively.
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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, thereunto duly authorized.
WESTERN GAS RESOURCES, INC.
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(Registrant)
Date: January 21, 2000 By: /S/ WILLIAM J. KRYSIAK
----------------------
William J. Krysiak
Vice President - Finance
(Principal Financial and
Accounting Officer)
