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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): May 17, 1999
CROSS TIMBERS OIL COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-10662 75-2347769
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
810 Houston Street, Suite 2000, Fort Worth, Texas 76102
(Address of principal executive offices) (Zip Code)
(817) 870-2800
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On May 17, 1999, Cross Timbers Oil Company ("Cross Timbers") entered into a
definitive agreement to acquire, with Lehman Brothers Holdings, Inc. ("Lehman
Brothers"), the common stock of Spring Holding Company ("Spring"), a private oil
and gas company located in Tulsa, Oklahoma, for $39.3 million cash and 4 million
shares of Cross Timbers' common stock, totaling $85 million. Closing is
anticipated to occur June 30, 1999. Cross Timbers and Lehman Brothers will each
own 50% of all outstanding common stock of Spring and will have equal board
representation and control of Spring. Cross Timbers will issue 4 million shares
of its common stock at an agreed value of $11.425 per share and receive $3.2
million in cash. Lehman Brothers will contribute $42.5 million in cash and give
Cross Timbers an opportunity to acquire its 50% equity interest at a later date.
The transaction requires approval of the banks of both Cross Timbers and Spring.
The acquired interests consist of about 1,400 producing wells on 340,000
net acres located primarily in the Arkoma Basin of Arkansas and Oklahoma.
Spring estimates proved reserves at December 31, 1998 to be 264 billion cubic
feet of natural gas equivalent, of which 99% is natural gas. First quarter 1999
daily production from this acquisition averaged 66 million cubic feet of natural
gas equivalent. Cross Timbers ascribes $20 million in value to non-producing
assets including Mega Natural Gas Company, L.L.C., a gas gathering and marketing
company, other compression and gathering assets, undeveloped acreage and other
assets. As of December 31, 1998, Spring's debt was $151 million, which Cross
Timbers anticipates will be reduced to about $145 million by June 30, 1999.
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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 hereunto duly authorized.
CROSS TIMBERS OIL COMPANY
Date: May 27, 1999 By: /s/ LOUIS G. BALDWIN
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Louis G. Baldwin
Senior Vice President and
Chief Financial Officer
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