<PAGE> 1
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 - OCTOBER 1, 1997
(DATE OF EARLIEST EVENT REPORTED)
HS RESOURCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COMMISSION FILE NO. 0-18886
DELAWARE 94-303-6864
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
ONE MARITIME PLAZA, 15TH FLOOR, SAN FRANCISCO, CALIFORNIA 94111
(ADDRESS OF PRINCIPAL (ZIP CODE)
EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (415) 433-5795
<PAGE> 2
FORM 8-K
HS RESOURCES, INC.
October 1, 1997
ITEM 5. OTHER EVENTS.
Pursuant to a Registration Statement (Reg. No. 333-28825) filed in
June 1997, Natural Gas Partners, L.P. (the "Selling Stockholder"), a stockholder
of HS Resources, Inc. (the "Company"), is offering to sell 1,864,225 shares
(the "Shares") of the Company's common stock held by such Selling Stockholder.
The following is a description of such common stock and the "Business
and Properties" section of the Prospectus Supplement pursuant to which the
Shares are being offered.
2
<PAGE> 3
DESCRIPTION OF COMMON STOCK
The following is a description of certain general terms and provisions of
the Common Stock. The summary of terms of the Company's Common Stock contained
in this Prospectus Supplement does not purport to be complete and is subject to,
and qualified in its entirety by, the provisions of the Company's Certificate of
Incorporation, Bylaws and Rights Agreement, dated as of February 28, 1996,
between the Company and Harris Trust Company of California (the "Rights
Agreement"), each of which has been incorporated by reference in the
accompanying Prospectus.
The Company's Certificate of Incorporation authorizes the issuance of
30,000,000 shares of Common Stock. No class of capital stock of HSR entitles the
holder thereof to any preemptive rights to purchase or subscribe for shares of
any class or any other securities.
All issued and outstanding shares of Common Stock are validly issued, fully
paid and nonassessable. The holders of Common Stock are entitled to one vote for
each share held on all matters submitted to a vote of common stockholders. The
Common Stock does not have cumulative voting rights. Each share of Common Stock
is entitled to participate equally in dividends, as and when declared by the
Company's Board of Directors, and in the distribution of assets in the event of
liquidation, subject in all cases to any prior rights of outstanding shares of
the Company's preferred stock. The shares of Common Stock have no preemptive or
conversion rights, redemption rights or sinking fund provision.
The outstanding shares of Common Stock are listed on The New York Stock
Exchange and trade under the symbol "HSE." Harris Savings and Trust is the
transfer agent, registrar and dividend disbursing agent for the Common Stock.
PREFERRED STOCK PURCHASE RIGHTS
On February 28, 1996, the Company's Board of Directors declared a dividend
distribution of one Preferred Stock Purchase Right (a "Right") for each
outstanding share of Common Stock. The description and terms of the Rights are
set forth in the Rights Agreement. The distribution was made as of March 14,
1996, to stockholders of record on that date. Each Right entitles the registered
holder of Common Stock to purchase from the Company one one-hundredth ( 1/100)
of a share of Preferred Stock for a price of $60.00 per one one-hundredth
( 1/100) of a share. The Rights will expire at the close of business on March
14, 2006, unless earlier redeemed by the Company as described in the Rights
Agreement.
Initially, the Rights will not be exercisable or represented by a separate
certificate but will trade together with the Common Stock. The Rights, unless
redeemed prior thereto, become exercisable only upon the close of business on
the day which is the earlier of (a) the tenth day after a public announcement
that a person or group of affiliated or associated persons, with certain
exceptions as noted in the Rights Agreement, has acquired beneficial ownership
of 15% or more of the Company's voting stock (an "Acquiring Person") or (b) the
tenth business day (or such later date as may be determined by the Company's
Board of Directors prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) after the commencement or announcement of
an intention to commence a tender or exchange offer, the consummation of which
would result in the ownership of 30% or more of the Company's voting stock (even
if no stock is actually purchased pursuant to such offer). An Acquiring Person
does not include, among others, the Selling Stockholder unless it is the
beneficial owner of 22.193% or more of the voting stock of the Company. All
issuances of Common Stock after the date of the Rights Agreement will include
Rights.
For as long as the Rights are redeemable pursuant to the terms of the
Rights Agreement, the Company may, except with respect to the redemption price
or date of expiration of the Rights, amend the Rights in any manner, including
an amendment to extend the time period in which the Rights may be redeemed. At
any time when the Rights are not then redeemable, the Company may amend the
Rights in any manner that does not materially adversely affect the interests of
holders of the Rights as such. Amendments to the Rights Agreement from and after
the time that any Person (as defined in the Rights Agreement) becomes an
Acquiring Person requires the approval of a majority of the Continuing Directors
(as defined in the Rights Agreement).
<PAGE> 4
BUSINESS AND PROPERTIES
THE COMPANY
HS Resources, Inc. is a leading U.S. independent energy company engaged in
the development, acquisition, exploitation, exploration, production and
marketing of oil and gas. Pursuant to its value-oriented growth strategy, the
Company's experienced management and technical staff have consistently increased
reserves, production and net cash flow, both on an absolute and per share basis.
Over the past four years the Company has achieved compound annual growth rates
of 34%, 40% and 36% in reserves, production and net cash flow, respectively.
Reflecting the Company's focus on per share growth as a measure of performance,
over the same period HSR's reserves and production, expressed in equivalent
barrels per share, have increased at a compound annual growth rate of 15.4% and
14.8%, respectively.
HSR has created a diversified asset base in four core geographic areas: the
D-J Basin, the Mid-Continent, the on-shore area of the Texas-Louisiana Gulf
Coast and the Northern Rocky Mountains. In the D-J Basin, the Company has
established a substantial production base as a result of its successful
execution of a large scale development drilling program and focused
acquisitions, primarily in the Wattenberg Field area. Its Mid-Continent
presence, which is focused in the Anadarko and Arkoma Basins, was established
through the Company's 1996 merger with Tide West Oil Company and enhanced by
exploration and production activities. In the Gulf Coast, the Company initiated
an active exploration program assembling approximately 300,000 gross acres under
its control and acquiring 270 square miles of 3-D seismic data (with an
additional 260 square miles to be acquired within the next six months). In the
Northern Rocky Mountains, the Company has assembled a 614,000 acre position,
primarily in the Williston and Greater Green River Basins. In these four core
areas, HSR has in its inventory in excess of 2,000 exploitation and exploration
opportunities, along with over 1.2 million gross undeveloped acres. The
exploitation opportunities include development and infill drilling,
refracturing, recompletion and wellbore deepening projects. The Company believes
that each of its four core geographic areas presents opportunities for growth in
reserves, production and cash flow.
At December 31, 1996, the Company reported proved reserves of 142.0 MMBoe,
with an estimated pre-tax present value (discounted at 10%) of $1.13 billion.
Natural gas constituted approximately 76% of the Company's reserves.
Approximately 76% of the Company's proved reserves were classified as developed.
At December 31, 1996, the Company operated approximately 74% of its 3,562 wells.
During the twelve months ended December 31, 1996 and the six months ended June
30, 1997, the Company generated net cash flow of $56.5 million and $34.2
million, respectively, with average production of 20.9 MBoe and 24.9 MBoe per
day, respectively.
The following tables summarize the Company's reserves at December 31, 1996,
its undeveloped acreage and production as of and for the six months ended June
30, 1997, and its product mix as a percentage of revenues for the six months
ended June 30, 1997.
<TABLE>
<CAPTION>
RESERVES PRODUCTION
AT DECEMBER 31, 1996 -----------------------
---------------------------------------- GROSS SIX MONTHS ENDED
OIL UNDEVELOPED JUNE 30, 1997
OIL GAS EQUIVALENT ACREAGE AT -----------------------
(MBBLS) (MMCF) (MBOE) % TOTAL JUNE 30, 1997 TOTAL (MBOE) % TOTAL
------- ------- ---------- ------- ------------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
D-J Basin.................... 27,902 415,067 97,080 68.4% 269,363 2,914 64.7%
Mid-Continent................ 6,555 225,442 44,128 31.1 34,314 1,579 35.0
Gulf Coast................... 24 75 37 0.0 299,441 12 0.3
Northern Rocky Mountains..... 133 3,837 773 0.5 613,913 -- --
------ ------- ------- ----- --------- ----- -----
Total.................... 34,614 644,421 142,018 100.0% 1,217,031 4,505 100.0%
====== ======= ======= ===== ========= ===== =====
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1997
PERCENT OF TOTAL REVENUES
------------------------------
OIL GAS LIQUIDS TOTAL
--- --- ------- -----
<S> <C> <C> <C> <C>
D-J Basin............................................. 29% 25% 11% 65%
Mid-Continent......................................... 6 28 0 34
Other................................................. 0 1 0 1
-- --- -- ---
Total................................................. 35% 54% 11% 100%
== === == ===
</TABLE>
BUSINESS STRATEGY
HSR's objective is to maximize shareholder value through aggressive growth
in its oil and gas reserves and production. To achieve these objectives, the
Company pursues a strategy of (i) building a substantial inventory of
development, exploitation and exploration projects, (ii) utilizing
state-of-the-art exploration, drilling, completion and production techniques,
(iii) consolidating in core geographic areas while divesting non-core assets,
(iv) maintaining efficient, low cost operations, (v) capturing downstream value,
and (vi) maximizing financial flexibility.
Build a Substantial Inventory of Development, Exploitation and Exploration
Projects. The Company intends to continue expanding its substantial portfolio of
development, exploitation and exploration projects. HSR has identified
approximately 900 development drillsites, over 200 refrac opportunities and 250
potential infill drillsites in the D-J Basin. The lower risk refrac, infill and
development projects in the D-J Basin are complemented by relatively higher risk
and potentially higher return exploitation and exploration projects in all four
of the Company's core areas. Based upon preliminary interpretation of seismic
and geologic data, the Company has identified approximately 218 exploitation and
development drilling locations in the Mid-Continent area, approximately 62
exploitation and exploration projects and leads in its Gulf Coast project areas
and approximately 13 such projects and leads in the Greater D-J Basin.
Utilize Advanced Techniques to Fully Exploit its Assets. In the D-J Basin,
the Company has tested and is using sophisticated fracturing technologies and
directional drilling to enhance production and obtain additional reserves from
existing wellbores. In order to improve its exploitation and exploration
drilling success rates, the Company utilizes 3-D seismic data extensively,
including advanced imaging techniques of coherence cube or continuity processing
and advanced interpretation and geostatistical techniques. The Company has
acquired more than 570 square miles of 3-D seismic data in its core geographic
areas and plans to acquire an additional 300 square miles of 3-D seismic data
within the next six months. The Company, directly or indirectly, employs or
contracts with 27 experienced geologists and geophysicists to develop its
projects.
Consolidate in Core Geographic Areas. The Company continues to pursue its
strategy of efficient consolidation in core areas. By effecting consolidation in
the D-J Basin, the Company capitalizes on opportunities for further operating
and administrative cost efficiencies and improves its product marketing position
through control of increased volumes. The Company also believes that further
consolidation in the D-J Basin would enable it to utilize existing wellbores
instead of drilling new wells to reach reserves that were previously
economically stranded by segregation of mineral interests. HSR is pursuing a
similar consolidation strategy in various fields and basins in the Mid-Continent
area. Equally important to the Company is the selective divestiture of
properties that are not a part of its core property set. This asset portfolio
management process allows the Company to maximize its efficiency in terms of
cost, personnel and expertise.
Maintain Efficient, Low Cost Operations. The Company is an industry leader
in operational efficiencies and field management, historically ranking as one of
the lowest cost operators in the United States. For the six months ended June
30, 1997, the Company's general and administrative expenses were $0.67 per Boe,
and its lease operating expenses were $2.75 per Boe.
Capture Downstream Value. The Company seeks to enhance both its margins and
operating flexibility through its marketing, trading and transportation
business. In July 1997, the Company established a new strategy for marketing its
gas production and for conducting its trading business through its wholly-owned
<PAGE> 6
subsidiary, HS Energy Services, Inc. ("HSES"). See "Recent Developments
- -- Natural Gas Marketing and Trading."
Maximize Financial Flexibility. The Company is committed to maintaining
substantial financial flexibility. In funding its growth, HSR has employed a
broad array of financing structures, divestitures and asset monetizations.
Management currently expects its 1997 capital expenditure budget to be funded by
internally-generated cash flow. Since June 30, 1996, the Company's long-term
debt has been reduced to approximately $349 million from $399.8 million using
the proceeds of asset sales and internally-generated cash flow. Over the same
period, floating rate debt as a percentage of total debt has been reduced to 13%
from 61%.
RECENT DEVELOPMENTS
Natural Gas Markets
Since the beginning of 1996, the market for the Company's D-J Basin gas has
strengthened substantially due to several factors. First, the excess supply from
Wyoming gas producers has declined as a result of increased demand from West
Coast markets. Second, in October 1995 the Colorado Public Utilities Commission
approved tariff changes that effectively eliminated transportation costs for D-J
Basin gas sold to the Colorado Front Range market, resulting in a transportation
cost advantage for D-J Basin producers of approximately $0.40 per MMBtu. Third,
the supply of D-J Basin gas has declined over the last two years due to the
combination of reduced drilling in the D-J Basin and natural production
declines. The average gas price received by the Company for its D-J Basin
production has increased from $1.28 per Mcf in 1995 to $1.90 per Mcf in 1996 and
to $2.08 per Mcf in the six months ended June 30, 1997. In addition, expansion
of pipeline capacity has begun, which is expected to be available in the Fall of
1997. The pipeline capacity will provide additional transportation outlets for
Wyoming producers to markets other than the Colorado Front Range and provide
Colorado Front Range producers access to other markets. The Company believes
that these developments will further reduce the disparity between D-J Basin
pricing and pricing generally available elsewhere in the United States.
During the first nine months of 1997, the average gas price received by the
Company was $2.05 per Mcf compared to $1.67 per Mcf for the same period last
year. Prices available to the Company for forward sales deliveries during the
upcoming winter season have been higher than these averages. The Company has
moved to capture these higher prices by entering into forward sales agreements
on a significant portion of its gas production. The Company has hedged
approximately 60% of its overall gas production for the fourth quarter of 1997
at an average price of approximately $2.57 per Mcf.
For more information concerning the volatility of natural gas prices, see
"Risk Factors -- Volatility of Oil and Natural Gas Prices; Marketability of
Production" in the accompanying Prospectus.
Acquisitions and Divestitures
The Company is committed to strategic rationalization of assets in each of
its core areas either through consolidation, diversified acquisitions or
divestitures of non-core properties. The Company has aggressively pursued these
objectives, resulting in two significant dispositions, several smaller tactical
acquisitions, the screening of numerous acquisition opportunities and the
identification and marketing of two other disposition packages.
Divestitures. During 1997, the Company has sold non-strategic, non-core
properties in two transactions for an aggregate of $34.1 million in cash as well
as certain properties. The divested properties generated $5.4 million of net
operating cash flow and approximately 8 MMcf per day of gas in 1996.
Acquisitions. The Company is pursuing a number of acquisition
opportunities, including consolidation in the D-J Basin. The Company believes
that it has a competitive advantage in capturing and maximizing the value of
certain D-J Basin properties as a result of the unique location of the Company's
existing base of more than 2,000 Wattenberg producing wells. These wells would
provide access to reserves that are economically stranded by segregation of
mineral interests. The Company's substantial D-J Basin infrastructure,
experienced operating personnel, low operating costs, significant gas marketing
position, and 15-year operating history in
<PAGE> 7
the area, resulting in superior technical and operating knowledge, may also
provide a competitive advantage in capturing and maximizing the value of
acquired properties. The Company also believes that ultimate value maximization
in the Wattenberg Field area will result from a combination of the Company's
assets, technical expertise and substantial operating base with those of other
asset owners in the area. Value maximization can be achieved either through
direct ownership or a shared value arrangement.
Natural Gas Marketing and Trading
In July 1997 the Company established a new strategy for marketing its
natural gas production through its wholly-owned subsidiary, HSES, which
purchases and markets all of the Company's natural gas production. HSES has a
five-part mission: (i) sell the equity gas of the Company at the greatest price
possible, (ii) execute the risk management strategy of the Company, (iii) market
value-added energy services to industrial, commercial and utility users in the
Mid-Continent and Colorado Front Range areas, (iv) take advantage of arbitrage
opportunities that arise among the various basins in which the Company produces
and (v) purchase and resell third party gas to assist in the achievement of
these goals.
HSES has committed most of the Company's equity production from the D-J
Basin to variable price term contracts with a large number of customers in
response to the unique transportation and pricing circumstances for D-J Basin
gas. Prior to the integration of the Company's Mid-Continent and Colorado Front
Range marketing operations, the Company followed a marketing strategy that
included a significant component of fixed-price term contracts as a means of
managing its forward price risks. That strategy reflected the high concentration
of assets in the D-J Basin and, because there was no well-established D-J Basin
gas price index, the Company's inability to hedge price and basis risk. Because
the Company can now supplement its obligations in either the D-J Basin or the
Mid-Continent with supply from the other area, HSES now has increased
flexibility to enter into and hedge fixed quantity, floating price agreements in
which the price is tied to index prices applicable to sales of its D-J Basin
gas.
D-J Basin Projects
Wattenberg Field Area. The Company has drilled 50 wells in the Wattenberg
Field since the beginning of the year, accounting for approximately 5.2 MMcf of
gas and 1,200 Bbls of oil production per day as of September 30, 1997. HSR has
in inventory 900 development drillsites, of which 604 are included in proved
undeveloped reserves. In addition, the Company has identified approximately 240
recompletion opportunities in Wattenberg and at least 250 potentially economic
infill drillsites.
The Company is currently studying its ability to increase Codell production
from existing wells through a process of restimulating (or "refracing") the
currently producing formation. The Company has recently conducted a pilot
program consisting of 10 refrac projects, all of which were successful. Through
the refrac process, the Company restimulated each well to achieve production
levels, reserve increases and decline profiles approaching the well's initial
characteristics. The Company believes that there are more than 200 opportunities
for this type of well stimulation. In addition, gas production from many of the
refrac candidates generate Section 29 tax credits of approximately $0.60 per
Mcf, which the Company monetizes under its existing Section 29 monetization
arrangements.
Greater D-J Basin. The Greater D-J Basin, in which the Company owns rights
to more than 195,000 gross undeveloped acres, provides HSR with significant
exploitation and exploration potential through the use of advanced technologies
such as 3-D seismic continuity processing and geostatistical analysis. In 1997,
the Company drilled and completed nine wells, currently producing approximately
1,000 Bbls per day of oil and 1.6 MMcf per day of gas. The Company has 13 active
projects and leads in this area under review by its geotechnical staff.
Mid-Continent Projects
The Company has identified over 200 potential development and exploitation
drilling opportunities and 84 recompletion opportunities in the Mid-Continent.
In 1997, the Company has participated in the drilling of 21 wells and performed
15 recompletions (primarily as non-operator) adding approximately 4 MMcf per day
<PAGE> 8
of gas net to the Company as of September 30, 1997. The Company is committed to
drilling 11 wells and undertaking eight recompletions as operator and to
participating in the drilling of five wells as non-operator.
In the Anadarko Basin, the Company owns interests in 664 wells in numerous
fields, including Mocane-Laverne, Bivins Ranch, Bishop and Watonga, each of
which provides potentially attractive exploitation opportunities. The Company
has identified approximately 51 drilling opportunities and 30 recompletions in
these four fields. After analyzing 13 square miles of 3-D seismic data in Bivins
Ranch, the Company plans to drill at least two wells by year end. If these wells
are successful, the Company would likely drill up to six more wells in Bivins
Ranch in 1998.
In the Arkoma Basin, the Company owns interests in 374 wells in the Kinta,
Bokoshe, Russellville, Wilburton and other fields. In those four fields alone,
the Company has identified approximately 129 drilling and 22 recompletion
opportunities.
Other areas present additional opportunities. For example, with the use 3-D
seismic data, the Company has identified further drilling opportunities at La
Reforma Field in northwestern Hidalgo County, Texas, in which the Company owns
interests in a 5,100 acre contiguous block. As part of its remaining 1997
projects, the Company plans to drill one additional well in this field and may
drill additional wells in 1998.
Gulf Coast Projects
The Company's on-shore Gulf Coast activity is focused in southwest
Louisiana and southeast Texas. To date the Company has acquired over 270 square
miles of 3-D seismic data and is in the process of acquiring more than 260
additional square miles of data.
One well has been drilled in the Roanoke project area resulting in a
discovery at the HSR Kratzer #1. The Company has a 30.4% working interest in
this well, which tested at a rate of 5.2 MMcf of gas and 145 Bbls of condensate
per day. The well is currently waiting for pipeline hookup.
The four wells drilled in the South Devillier project area have resulted in
one discovery, the HSR Cooper #2. The Company has a 50% working interest in this
well, which was put on line in early June 1997. This well is currently producing
5 MMcf of gas and 150 Bbls of condensate per day from the Vicksburg formation.
As the result of a limited reservoir, the Company has revised its estimates of
reserves downward to 0.3 MMBoe.
Drilling in the Buhler project area has yielded eight discoveries from 10
wells. Though the Company's working interest is relatively small in the 76
square mile Buhler program, the technology gained from the program has provided
the basis for developing three additional project areas, in which the Company's
working interests range from 25% to 50%. For example, the North Gillis program
in Calcasieu Parish, Louisiana, in which the Company has a 37.5% working
interest, is a direct offset and analog to the successful Buhler program. This
program is targeting Hackberry and Yegua sands and the 3-D seismic survey is
estimated to be complete through geophysical processing by year end with
drilling to commence in the first half of 1998.
The Company has a 25% working interest in the Iowa/Welsh 3-D project
operated by Sonat Exploration, Inc. in Jefferson Davis Parish, Louisiana. The
135 square mile 3-D seismic survey is anticipated to be completed by year end
1997 with initial drilling to follow in late 1998.
At the Port Barre project in St. Landry Parish, Louisiana, the Company is
in the field acquisition phase of a 55 square mile 3-D seismic survey. The 3-D
seismic data acquisition is anticipated to be completed in December, 1997 with
initial drilling expected to commence in the second half of 1998. The Company
has a 100% working interest in the Port Barre program.
The Company has acquired 13 square miles of 3-D seismic data in its
Jennings project area. The Haber #1, operated by the Company, is currently being
drilled and is expected to reach total depth by Mid-October. The Company has a
working interest of 37.5% in the Jennings project area.
<PAGE> 9
Northern Rocky Mountain Projects
The Company's strategic focus for the Northern Rocky Mountain area is to
optimize production, fund exploratory activity through joint ventures, and
continue evaluation of undeveloped acreage. The Company has entered into
agreements with several operators with specific areas of technological or
operational expertise to evaluate and exploit certain of its large acreage
positions. By year end, the Company expects this effort to have resulted in the
drilling of up to seven wildcats and the acquisition of 50 square miles of 3-D
seismic data.
For example, the Company has entered into an agreement with Union Pacific
Resources Company ("UPRC") on over 300,000 gross acres in Daniels County,
Montana in the Williston Basin. Through the agreement, UPRC will drill at least
two dual-lateral horizontal wells in 1997. The first well reached its objective
and is awaiting completion. Drilling for the second well is expected to commence
during the fourth quarter.
In the central portion of the Williston, in Richland and Roosevelt County,
Montana, HSR has entered into joint venture agreements with experienced local
operators. These agreements will result in the drilling of two wells and 32
square miles of 3-D seismic data. The seismic data has been acquired and is
awaiting interpretation, and the first well is nearing its targeted depth.
The Company retains a significant acreage position in the Greater Green
River Basin. This is one of the most active areas in the Northern Rocky Mountain
area where new geophysical, drilling and completion technologies are unlocking
new, high-potential play concepts.
ITEM 7(C). Exhibit
Exhibit No. Description
- ----------- -----------
99.1 Press Release announcing the offering by the Selling
Stockholder
<PAGE> 10
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.
HS RESOURCES, INC.
By: /s/ JAMES M. PICCONE
---------------------------
James M. Piccone
Vice President
Dated: October 1, 1997.
<PAGE> 11
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
99.1 Press Release announcing the offering
by the Selling Stockholder
<PAGE> 1
EXHIBIT 99.1
HS RESOURCES ANNOUNCES SELLING STOCKHOLDER OFFERING
San Francisco, California -- September 30, 1997
HS Resources, Inc. today announced the offering by Natural Gas
Partners, L. P. (the "Stockholder") of approximately 1.8 million shares of the
Company's common stock. The Stockholder is liquidating this portion of its
holdings to comply with obligations under its partnership agreement. The shares
allocable to the Stockholder's general partner, which includes the managers of
the Natural Gas Partners funds ("NGP"), are not being sold pursuant to the
offering and will be distributed to the general partner.
According to Ken Hersh, a manager of NGP, "We have been a strategic
investor in the Company since 1990, and we are liquidating a portion of the
partnership's investment at this time as a result of certain holding
restrictions under our partnership agreement. The managers of NGP continue to
believe in the Company's ability to create long term value, and I look forward
to remaining a member of the Board of Directors and shareholder of the
Company."
Commenting on the offering, Nicholas J. Sutton, Chairman and Chief
Executive Officer said, "NGP has been a valued, long term investor. Although
their partnership agreement necessitates this sale, we are pleased that the
managers of NGP will continue to be shareholders, and that Ken Hersh will
remain on the Board. The offering will provide additional liquidity in our
stock and broaden our base of shareholders."
The shares being offered were registered in the shelf registration
filed by the Company in June 1997. The offering is being underwritten by
underwriters led by Lehman Brothers Inc.
Separately, as part of its required liquidation, NGP announced the
sale earlier today of 1 million shares of common stock in a direct, privately
negotiated transaction between the Stockholder and a foreign investment fund.
The purchase price for the shares was $17.25 per share.
HS Resources is a leading U.S. independent company engaged in the
development, acquisition, expliotation, exploration, production and marketing
of oil and gas with active projects in the Rocky Mountain, Mid-Continent, and
Gulf Coast regions. The common stock of HS Resources, Inc. is traded on The New
York Stock Exchange under the symbol "HSE."
For additional information contact Theodore Gazulis, Vice President
Treasury, Capital Markets and Investor Relations at (415) 433-5795 Extension
522.
