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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 2, 1994
Date of report (date of earliest event reported)
CABOT OIL & GAS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-10447 04-3072771
(State or other jurisdiction (Commission File (I.R.S.Employer
incorporation) Number) Identification No.)
15375 MEMORIAL DRIVE, HOUSTON, TX. 77079
(Address of principal executive offices, including Zip Code)
(713) 589-4600
(Registrant's telephone number
including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 2, 1994, Cabot Oil & Gas Corporation ("the Company") completed
the merger between a Company subsidiary and Washington Energy Resources
Company ("WERCO"), a wholly owned subsidiary of Washington Energy Company
('WECO"). The Company acquired the stock of WERCO in a tax-free exchange for
total consideration of $168.7 million, subject to certain post-closing
adjustments. WERCO's properties include certain oil and gas leasehold
interests in the Green River basin of Wyoming and in South Texas, together
with related real and personal property, and equipment. Excluded from the
transactions are certain firm transportation, storage and other contractual
arrangements of WERCO's marketing affiliate which were retained by WECO. The
Company estimates WERCO's proved reserves at 191 billion cubic feet
equivalent, of which 82% are natural gas. WERCO's current net daily
production is 42 million cubic feet of natural gas, 290 barrels of natural
gas liquids and 1,700 barrels of oil and condensate. WERCO produces from 376
wells (116 net) and operates 184 wells (87 net).
As consideration, the Company issued 2,133,000 shares of its Class A
common stock and 1,134,000 shares of a 6% convertible redeemable preferred
stock ($50 per share stated value) to WECO in exchange for the capital stock
of WERCO. The preferred stock is convertible into 1,972,174 shares of Class
A common stock at $28.75 per share. In addition, the Company advanced cash
to repay intercompany indebtedness. The intercompany debt of WERCO was $63.6
million, as adjusted, as of March 31, 1994. The Company borrowed the funds
necessary to repay such intercompany indebtedness under its revolving credit
facility.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
It is impracticable for the Company to provide the required
financial statements at the date hereof. The Company will file the
required financial statements as soon as possible, but no later than
sixty days after May 17, 1994.
(b) Pro Forma Financial Information
It is impossible for the Company to provide the required pro forma
financial information at the date hereof. The Company will file the
required pro forma financial information as soon as practicable, but no
later than 60 days after May 17, 1994.
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(c) Exhibits
Exhibit No. DESCRIPTION
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Exhibit 1 Agreement of Merger dated February 25, 1994
among the Company, COG Acquisition Company,
WECO and WERCO (filed as an exhibit to the
Company's Annual Report on Form 10-K for
the year ended December 31, 1993.
Exhibit 2 Amendment No. 1 to the Agreement of Merger
dated as of May 2, 1994.
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SIGNATURES
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 hereunto duly authorized.
CABOT OIL & GAS CORPORATION
DATE: MAY 11, 1994
By: /s/ JOHN U. CLARKE
John U. Clarke
Executive Vice President and Chief
Financial Officer
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EXHIBIT 2
AMENDMENT NO. 1
TO
AGREEMENT OF MERGER
THIS AMENDMENT NO. 1 TO AGREEMENT OF MERGER, dated May 2, 1994, by
and among Cabot Oil & Gas Corporation, a Delaware corporation, COG Acquisition
Company, a Delaware corporation, Washington Energy Resources Company, a
Washington corporation, and Washington Energy Company, a Washington
corporation.
W I T N E S S E T H:
WHEREAS, the parties hereto have entered into an Agreement of
Merger dated as of February 25, 1994 (the "Merger Agreement");
WHEREAS, the parties hereto wish to amend the Merger Agreement as
set forth in this Amendment No. 1;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
Section 1. The definitions of "Intercompany Debt" and "Title
Defect Threshold Amount" contained in Article 1 of the Merger Agreement are
amended to read in their entirety as follows:
"'INTERCOMPANY DEBT' shall mean the indebtedness of WERCO
to WECO in the amount of $63,661,000.
'TITLE DEFECT THRESHOLD AMOUNT' shall mean zero."
Section 2. The first sentence of Section 8.3 of the Merger
Agreement is amended to read in its entirety as follows:
"WECO shall have the right within ninety (90) days after the
Closing Date to furnish COGC and Merger Sub with a written list of
specified Interest Additions claimed by WECO, specifying in
reasonable detail the basis of each such claimed Interest
Addition, the Lease, Well or Unit that each such claimed Interest
Addition
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affects and the Interest Addition Amount estimated by WECO for
such Interest Addition."
Section 3. Section 8.11 of the Merger Agreement is amended to
read in its entirety as follows:
"8.11 ENVIRONMENTAL DEFECTS. COGC's and Merger Sub's exclusive
remedy for any Environmental Defect shall be as provided in this
Section 8.11. If within three (3) years after the Effective Time
COGC notifies WECO in writing of facts, conditions and
circumstances which constitute an Environmental Defect with
respect to the Properties or the Business, and such Environmental
Defect results in COGC and Merger Sub having aggregate Losses from
Environmental Defects in excess of one million dollars
($1,000,000), then, with respect to such excess only and subject
to the further limitations set forth in this Section 8.11, WECO
shall indemnify COGC and Merger Sub. WECO's liability under this
Section 8.11 shall be limited to the first $10,000,000 in excess
of $1,000,000 aggregate Losses, plus fifty percent (50%) of Losses
in excess of such $10,000,000 up to $20,000,000 in excess of
$1,000,000 aggregate Losses; thus, WECO's liability under this
Section 8.11 shall in no event exceed $15,000,000.
Notwithstanding anything to the contrary contained in this
Agreement, WECO shall not indemnify COGC for any Losses from
Environmental Defects relating to the matters set forth on
Schedule 8.11."
Section 4. The reference to "Title VIII" in Section 9.15(j) of
the Merger Agreement is amended to refer to "Title VII" instead.
Section 5. Section 15.3 of the Merger Agreement is amended to
read in its entirety as follows:
"15.3 ENTIRE AGREEMENT. This Agreement, including the
schedules and exhibits hereto, and the letter agreements executed
by WECO and COGC on May 2, 1994, contain the entire agreement
between the parties with respect to the subject matter hereof, and
there are no agreements, understandings, representations or
warranties between the parties other than those set forth or
referred to herein."
Section 6. A new Section 2.6 is added to the Merger Agreement,
which will read in its entirety as follows:
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"2.6 POST-CLOSING ADJUSTMENT.
(a) Within 45 days after the Closing Date, WECO shall
provide to COGC a detailed accounting (the "Closing Statement") of
any amounts advanced by WECO to WERCO after March 31, 1994 and
prior to the Closing Date for expenditures by WERCO and customary
administrative and financial services provided by WECO to WERCO in
the ordinary course of its Business consistent with past practice
(the "Advance Amount").
(b) Upon receipt of the Closing Statement, COGC shall
have the right to inspect the work papers supporting the Closing
Statement. If COGC does not object to the Advance Amount as
proposed by WECO on the Closing Statement, by written notice of
objection delivered to WECO within 30 days after COGC's receipt of
the Closing Statement, then the Advance Amount set forth on the
Closing Statement shall be deemed conclusive and binding on the
parties. If COGC does so object to the Advance Amount set forth
on the Closing Statement, COGC shall set forth its objections in
reasonable detail and COGC and WECO shall then promptly endeavor
to resolve the matters in dispute and agree upon the proper amount
of the Advance Amount. If a written agreement determining the
Advance Amount has not been reached within 30 days after WECO's
receipt of COGC's notice of objection to WECO's determination of
the Advance Amount, then either party may, by notice to the other,
submit for determination to a mutually agreed upon arbitrator (the
"Arbitrator") the question of what adjustments, if any, must be
made in the Closing Statement for the correct determination of the
Advance Amount. Any such determination made by the Arbitrator
shall be conclusive and binding on the parties. Nothing herein
shall be construed to (i) authorize or permit the Arbitrator to
determine any question or matter under or in connection with this
Agreement, except the determination of what adjustments, if any,
must be made in the Closing Statement for the correct
determination of the Advance Amount or (ii) require the Arbitrator
to follow the rules or procedures of the American Arbitration
Association. The reasonable compensation (including reimbursement
of reasonable costs and expenses) of the Arbitrator shall be borne
equally by the WECO and COGC.
(c) Within five days after the final determination of
the Advance Amount pursuant to Section 2.6(b), an adjusting
payment shall be made by COGC to WECO."
Section 7. A new Section 9.24 is added to the Merger Agreement,
which will read in its entirety as follows:
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"9.24 INTERCOMPANY INDEBTEDNESS. Notwithstanding
anything contained in this Agreement to the contrary, COGC shall
have no liability for any indebtedness (other than indemnification
arrangements) of WERCO to WECO, other than the Intercompany Debt
or the Advance Amount (as described in Section 2.6), and WECO
hereby waives any claim it may otherwise have against COGC or the
Surviving Corporation for the payment of any such indebtedness
and, for the consideration herein contained, forgives any such
indebtedness."
Section 8. A new Section 9.25 is added to the Merger Agreement,
which will read in its entirety as follows:
"9.25 ASSIGNMENT OF CAUSE OF ACTION. The parties hereto
agree that immediately prior to Closing, WERCO shall be deemed to
have assigned to WECO all right, title and interest of WERCO or
WEEX in and to the cause of action styled Washington Energy
Exploration, Inc. v. Amoco, U.S. District Court for Colorado, No.
94-S-298, and, in connection with such assignment, WECO hereby
indemnifies and holds harmless COGC and the Surviving Corporation
from any and all loss thereto which may arise at any time on
account of such cause of action or the matters which are the
subject thereof or on account of any counterclaim or cross-claim
asserted therein. Within ten days after the Closing Date, WECO
shall reimburse COGC for any costs and expenses of WERCO related
to such cause of action that are included in the Intercompany
Debt. Notwithstanding the provisions of Section 13.1, the
agreements contained in this Section 9.25 shall survive the
Closing without limitation."
Section 9. Schedule 5.13 is amended to read in its entirety as
attached hereto. Schedule 8.11 is attached hereto.
Section 10. This Amendment shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
principles of conflict of laws.
Section 11. This Amendment may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
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IN WITNESS WHEREOF, this Amendment has been signed by or on behalf
of each of the parties as of the date first above written.
WASHINGTON ENERGY RESOURCES COMPANY
By: /s/ KEITH E. ANDERSON
Keith E. Anderson, President
WASHINGTON ENERGY COMPANY
By: /s/ KEITH E. ANDERSON
Keith E. Anderson, Vice President-
Natural Resources
CABOT OIL & GAS CORPORATION
By: /s/ JOHN U. CLARKE
John U. Clarke,
Executive Vice President
COG ACQUISITION COMPANY
By: /s/ JOHN U. CLARKE
John U. Clarke,
Executive Vice President
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