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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT - SEPTEMBER 1, 1998
(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
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FORM 8-K/A
HS RESOURCES, INC.
September 1, 1998
This Report amends the Company's current report dated September 1,
1998, filed September 3, 1998, by adding pro forma financial information as set
forth in Item 7 below. This Report concerns the consummation of the sale by the
Company of its wholly-owned subsidiary, HSRTW, Inc., to Universal Resources
Corporation, a subsidiary of Questar Corp. (the "Mid-Continent Divestiture").
ITEM 7(A). PRO FORMA FINANCIAL INFORMATION.
INDEX TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1998.......................... 4
Pro Forma Condensed Consolidated Statement of Operations for the Six Months
Ended June 30, 1998................................................................... 5
Notes to Pro Forma Condensed Consolidated Financial Statements ............................. 6
Pro Forma Condensed Consolidated Statement of Operations for the Year Ended
December 31, 1997..................................................................... 8
Notes to Pro Forma Condensed Consolidated Financial Statements ............................. 9
</TABLE>
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1998 Pro formas
The following unaudited pro forma condensed consolidated balance sheet as
of June 30, 1998, and unaudited pro forma condensed consolidated statement of
operations for the six months then ended adjust the historical financial
information of the Company to reflect the Mid-Continent Divestiture. The
unaudited pro forma condensed consolidated balance sheet and unaudited pro forma
condensed consolidated statement of operations were prepared as if the
Mid-Continent Divestiture was consummated on June 30, 1998 and January 1, 1998,
respectively. The pro forma adjustments are based on estimates and assumptions
explained in further detail in the accompanying notes.
1997 Pro formas
The following unaudited pro forma condensed consolidated statement of
operations for the year ended December 31, 1997 adjusts the historical financial
information of the Company to reflect the acquisition of D-J Basin assets from
Amoco Production Company on December 15, 1997 (the "Amoco Acquisition") and the
Mid-Continent Divestiture as if both transactions were consummated on January 1,
1997. The pro forma adjustments are based on estimates and assumptions explained
in further detail in the accompanying notes.
The unaudited pro forma condensed consolidated financial statements
should be read in conjunction with the related historical financial statements
and notes thereto. The pro forma information presented is not necessarily
indicative of the financial position or results that would have actually
occurred had the Amoco Acquisition and Mid-Continent Divestiture been
consummated on the dates indicated or which may occur in the future.
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HS RESOURCES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
(Historical) Pro Forma
HSR Adjustments Pro Forma
------------ ----------- ---------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS $ 60,925 $ (9,794)A $ 51,131
---------- --------- ---------
OIL AND GAS PROPERTIES, at cost, using the full cost method:
Undeveloped acreage 207,409 (16,710)A 190,699
Costs subject to depreciation, depletion and amortization 943,256 (131,059)A 812,197
Less -- accumulated depreciation, depletion and
amortization (216,742) --- (216,742)
---------- --------- ---------
Net oil and gas properties 933,923 (147,769) 786,154
---------- --------- ---------
Gas gathering and other, net 21,473 (2,015)A 19,458
---------- --------- ---------
TOTAL ASSETS $1,016,321 $(159,578) $ 856,743
========== ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES $ 75,661 $ 2,331 A/G $ 77,992
---------- --------- ---------
ACCRUED AD VALOREM TAXES 11,608 --- 11,608
---------- --------- ---------
DEFERRED REVENUE 7,367 --- 7,367
---------- --------- ---------
LONG-TERM BANK DEBT, net of current portion 433,000 (150,909)A 282,091
---------- --------- ---------
9 7/8% SENIOR SUBORDINATED NOTES, net of
unamortized discount 74,683 --- 74,683
---------- --------- ---------
9 1/4% SENIOR SUBORDINATED NOTES, net of
unamortized discount 149,349 --- 149,349
---------- --------- ---------
DEFERRED INCOME TAXES 70,136 (11,000)G 59,136
---------- --------- ---------
STOCKHOLDERS' EQUITY 194,517 --- 194,517
---------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,016,321 $(159,578) $ 856,743
========== ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
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HS RESOURCES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
(Historical) Pro Forma
HSR Adjustments Pro Forma
------------------ ------------------ ------------------
<S> <C> <C> <C>
REVENUES:
Oil and gas sales $ 83,712 $ (13,499) B $ 70,213
Trading and transportation 27,466 --- 27,466
Other gas revenues 4,145 (46) C 4,099
Interest and other income 643 (183) C 460
------------------ ------------------ ------------------
Total revenues 115,966 (13,728) 102,238
------------------ ------------------ ------------------
EXPENSES:
Production taxes 5,757 (925) B 4,832
Lease operating 15,314 (2,952) B 12,362
Cost of trading and transportation 26,360 --- 26,360
Depreciation, depletion and amortization 36,535 (6,998) D 29,537
Impairment of oil and gas properties 59,000 --- 59,000
General and administrative 3,683 (968) E 2,715
Interest 20,837 (6,024) F 14,813
------------------ ------------------ ------------------
Total expenses 167,486 (17,867) 149,619
------------------ ------------------ ------------------
INCOME (LOSS) BEFORE INCOME TAXES (51,520) 4,139 (47,381)
PROVISION (BENEFIT) FOR INCOME TAXES (19,629) 1,577 G (18,052)
------------------ ------------------ ------------------
NET INCOME (LOSS) $ (31,891) $ 2,562 $ (29,329)
================== ================== ==================
EARNINGS (LOSS) PER SHARE
Common and common equivalent shares $ (1.72) $ (1.58)
================== ==================
Common and common equivalent shares -- assuming
dilution $ (1.71) $ (1.57)
================== ==================
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING:
Common and common equivalent shares 18,531 18,531
================== ==================
Common and common equivalent shares -- assuming
dilution 18,649 18,649
================== ==================
</TABLE>
The accompanying notes are an integral part of these statements.
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HS RESOURCES, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(A) Record sales proceeds of the Mid-Continent Divestiture as follows:
<TABLE>
<CAPTION>
Total
Pro Forma
Adjustments
------------------
(In Thousands)
<S> <C>
Sales proceeds
Sale price $ (157,540)
Working capital at 3/31/98 2,540
Negative working capital at 6/30/98 981
Transaction costs 3,110
------------------
Total pro forma adjustment $ (150,909)
==================
Allocation of Sales Proceeds
Current assets $ (9,794)
Oil and gas properties -- undeveloped properties (16,710)
Oil and gas properties -- developed properties (131,059)
Other assets (2,015)
Current liabilities 8,669
------------------
Total pro forma adjustment $ (150,909)
==================
Repayment of debt $ (150,909)
==================
</TABLE>
(B) Record elimination of oil and gas revenues, production taxes and lease
operating expenses attributable to the Mid-Continent Divestiture for the six
months ended June 30, 1998.
(C) Record elimination of other gas revenues and other income attributable to
the Mid-Continent Divestiture for the six months ended June 30, 1998.
(D) Record elimination of DD&A expense on the divested assets. Pro forma DD&A
expense on proved oil and gas properties is computed by combining the Company's
net unamortized costs of proved properties less the net proceeds from the
Mid-Continent Divestiture attributable to proved properties using the
units-of-production amortization method based on estimates of total proved
reserves. The DD&A rate per Boe is $5.53.
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(E) Record elimination of Mid-Continent general and administrative expenses for
the six months ended June 30, 1998.
(F) Reduce interest expense due to assumed debt repayment using the Company's
average borrowing rate for the six months ended June 30, 1998 of 7.67%. The
interest adjustment was calculated on debt reduction of $150.9 million.
Additionally, year-to-date capitalized interest on Mid-Continent undeveloped
acreage costs was eliminated.
(G) Record the tax effect of the Mid-Continent Divestiture assuming a combined
federal and state effective tax rate of 38.1%. Approximately $11.0 million of
combined federal and state taxes were reclassified from deferred to current
liabilities.
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HS RESOURCES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
(Historical) Pro Forma
HSR Adjustments Pro Forma
---------------- ----------------- ---------------
<S> <C> <C> <C>
REVENUES:
Oil and gas sales $ 137,251 $ (3,116) A $ 134,135
Trading and transportation 90,062 --- 90,062
Other gas revenues 4,449 2,624 B 7,073
Interest and other income 1,943 (460) B 1,483
---------------- -------------- ---------------
Total revenues 233,705 (952) 232,753
---------------- -------------- ---------------
EXPENSES:
Production taxes 9,703 (177) A 9,526
Lease operating 24,848 (3,185) A 21,663
Cost of trading and transportation 88,402 --- 88,402
Depreciation, depletion and amortization 53,241 6,426 C 59,667
General and administrative 7,987 1,358 D 9,345
Interest 31,204 1,982 E 33,186
---------------- -------------- ---------------
Total expenses 215,385 6,404 221,789
---------------- -------------- ---------------
INCOME (LOSS) BEFORE INCOME TAXES 18,320 (7,356) 10,964
PROVISION (BENEFIT) FOR INCOME TAXES 6,980 (2,803) F 4,177
---------------- -------------- ---------------
NET INCOME (LOSS) $ 11,340 $ (4,553) $ 6,787
================ ============== ===============
EARNINGS (LOSS) PER SHARE
Common and common equivalent shares $ 0.66 $ 0.37
================ ===============
Common and common equivalent shares -- assuming
dilution $ 0.64 $ 0.36
================ ===============
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING:
Common and common equivalent shares 17,119 1,147 G 18,266
================ ============== ===============
Common and common equivalent shares -- assuming
dilution 17,593 1,147 G 18,740
================ ============== ===============
</TABLE>
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HS RESOURCES, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(A) Record net impact of additional oil and gas revenues, production taxes and
lease operating expenses attributable to the Amoco Acquisition for the period
January 1, 1997 through December 15, 1997 and the elimination of oil and gas
revenues, production taxes and lease operating expenses attributable to the
Mid-Continent Divestiture for the twelve months ended December 31, 1997.
(B) Record net impact of additional income from the monetization of Section 29
tax credits generated from the assets acquired from the Amoco Acquisition and
the elimination of other income attributable to the Mid-Continent Divestiture
for the twelve months ended December 31, 1997.
(C) Record net impact of additional DD&A expense for the Amoco Acquisition and
the elimination of DD&A expense for the Mid-Continent Divestiture. Pro forma
DD&A expense on proved oil and gas properties is computed by combining the
Company's net unamortized costs of proved properties plus the net increase to
oil and gas properties as a result of the Amoco Acquisition and the
Mid-Continent Divestiture and using the units-of-production amortization method
based on estimates of total proved reserves. The DD&A rate per Boe is $6.10.
(D) Record net impact of additional general and administrative expense for the
Amoco Acquisition and the elimination of general and administrative expense for
the Mid-Continent Divestiture for the twelve months ended December 31, 1997.
(E) Record net increase in interest expense on a net increase in debt of $141.5
million. Additional debt necessary to fund the Amoco Acquisition amounted to
$292.4 million. Debt repayment from the net proceeds of the Mid-Continent
Divestiture will be approximately $150.9 million. The Company's average
borrowing rate during 1997 was 7.21%. Additionally, capitalized interest was
increased for the net change in undeveloped acreage costs attributable to the
Amoco Acquisition and Mid-Continent Divestiture.
(F) Record the tax effect of the Amoco Acquisition and Mid-Continent Divestiture
assuming a combined federal and state effective tax rate of 38.1%.
(G) Record additional weighted average shares that would have been outstanding
if the Amoco Acquisition had occurred on January 1, 1997.
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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.
HS RESOURCES, INC.
By: /s/ James M. Piccone
---------------------------------
James M. Piccone
Vice President
Dated: September 1, 1998.
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EXHIBIT INDEX
Exhibit Number Description
- --------------------------------------------------------------------------------
99.1 Press Release, dated September 1, 1998, incorporated
by reference to the Company's Report on Form 8-K
dated September 1, 1998, and filed September 3, 1998.
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