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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 2000
REGISTRATION NUMBER 333-41940
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE MERIDIAN RESOURCE CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TEXAS 76-0319553
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
1401 ENCLAVE PARKWAY, SUITE 300
HOUSTON, TEXAS 77077
(281) 597-7000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
MR. JOSEPH A. REEVES, JR.
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
THE MERIDIAN RESOURCE CORPORATION
1401 ENCLAVE PARKWAY, SUITE 300
HOUSTON, TEXAS 77077
(281) 597-7000
(Name, address, including zip code, and telephone number including area code, of
agent for service)
Copies to:
CHARLES L. STRAUSS
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
(713) 651-5151
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement becomes effective, subject to market
conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
---------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
---------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER
TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED SEPTEMBER 19, 2000
PROSPECTUS
[MERIDIAN RESOURCE CORP. LOGO]
$100,000,000
DEBT SECURITIES, PREFERRED STOCK AND COMMON STOCK
This prospectus relates to the following securities of The Meridian
Resource Corporation (the "Securities"):
- debt securities, which may be senior or subordinated debt securities;
- preferred stock; and
- common stock.
We will provide the specific terms of the Securities in supplements to this
prospectus. This prospectus may not be used to sell Securities unless it is
accompanied by a prospectus supplement.
Our common stock is listed on the New York Stock Exchange (the "NYSE")
under the trading symbol "TMR". Any common stock sold pursuant to a prospectus
supplement will be listed on that exchange, subject to official notice of
issuance. On September 15, 2000 the last reported sales price for our common
stock was $6 1/2 per share.
YOU SHOULD CAREFULLY REVIEW AND CONSIDER THE INFORMATION UNDER THE HEADING
"RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS AND UNDER THE SAME HEADING
IN THE APPLICABLE PROSPECTUS SUPPLEMENT BEFORE INVESTING IN THE SECURITIES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
, 2000
<PAGE> 3
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with
the Securities and Exchange Commission using a "shelf" registration process.
Under the shelf registration process, we may offer any combination of the
Securities described in this prospectus in one or more offerings, with a total
initial offering price of up to $100,000,000 as we may designate in prospectus
supplements. We will offer the Securities described in this prospectus in one or
more offerings with an aggregate offering price of up to $100,000,000.
This prospectus provides you with a general description of the debt
securities, preferred stock and common stock that we may offer. When we use this
prospectus to offer Securities, we will provide a prospectus supplement that
will contain specific information about the terms of that offering. The
prospectus supplement may add, update or change the information contained in
this prospectus.
We may offer the Securities in amounts, at prices, and on terms determined
at the time of offering. We may sell the Securities directly to you or through
underwriters we select. If we use underwriters to sell the Securities, we will
name them and describe their compensation in a prospectus supplement.
Please carefully read this prospectus and the prospectus supplement
together with the additional information described under the heading "Where You
Can Find More Information".
ABOUT THE MERIDIAN RESOURCE CORPORATION
We are an independent oil and natural gas exploration and production
company with operations focused on onshore regions in south Louisiana and the
Texas Gulf Coast as well as offshore regions in the Gulf of Mexico. We use both
3-D seismic and computer-aided exploration (CAEX) technology to explore and
develop our oil and natural gas properties.
As of December 31, 1999, our reserves totaled 365 Bcfe, which represents an
increase of 20% over year-end 1998. These reserves have an average life of seven
years and consist of approximately 55% natural gas reserves with 69% of those
being proved developed and 31% being proved undeveloped. The present value of
future net cash flows before income taxes for these reserves is $596 million,
which is an increase of $303 million, or 103%, over year-end 1998 (based on
prices of $25.81 per Bbl of oil and $2.48 per Mcf of natural gas). In addition
to the proved reserves, we hold rights and licenses to over 4,300 square miles
of 3-D seismic data as well as access to over 156,065 miles of 2-D seismic data.
Our average net production during 1999 and the first six months of this year was
135 Mmcfe per day and 154 Mmcfe per day, respectively.
We believe we are among the leaders in the use of 3-D seismic technology by
independent oil and natural gas companies. We also believe we have a competitive
advantage in the areas where we operate because of both our large inventory of
2-D and 3-D seismic data and our expertise with and disciplined application of
3-D seismic technology.
In 1997, we expanded our operations into the Gulf of Mexico by acquiring
Cairn Energy USA in exchange for shares of our common stock. This acquisition
both expanded the geographic scope of our operations and provided us with a
greater base from which to expand and execute our business. Following the
acquisition of Cairn, we acquired substantially all of Shell Oil Company's
onshore oil and natural gas property interests in south Louisiana through two
separate transactions. We consummated these transactions on June 30, 1998 and as
a result Shell became the beneficial owner of 39.9% of our common stock on a
fully diluted basis.
Our principal executive offices are located at 1401 Enclave Parkway, Suite
300, Houston, Texas, and our telephone number is (281) 597-7000.
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FORWARD-LOOKING STATEMENTS
We believe that some statements contained in this prospectus or in the
documents incorporated by reference into this prospectus relate to results or
developments that we anticipate will or may occur in the future and are not
statements of historical fact. Those statements are "forward-looking statements"
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934 (the "Exchange Act"). Words such as
"anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan",
"predict", "project", "will" and similar expressions identify forward-looking
statements. Examples of forward looking statements include statements about the
following:
- our future operating results,
- our repayment of debt,
- our future capital expenditures,
- our expansion and growth of operations, and
- our future investments in and acquisitions of oil and natural gas
properties.
We have based these forward-looking statements on assumptions and analyses
made in light of our experience and our perception of historical trends, current
conditions, and expected future developments. However, you should be aware that
these forward-looking statements are only our predictions and we cannot
guarantee any such outcomes. Future events and actual results may differ
materially from the results set forth in or implied in the forward-looking
statements. Factors that might cause such a difference include:
- general economic and business conditions,
- exposure to market risks in our financial instruments,
- fluctuations in worldwide prices and demand for oil and natural gas,
- fluctuations in the levels of our oil and natural gas exploration and
development activities,
- risks associated with oil and natural gas exploration and development
activities,
- competition for raw materials and customers in the oil and natural gas
industry,
- technological changes and developments in the oil and natural gas
industry,
- regulatory uncertainties and potential environmental liabilities,
- potential for and uncertainty of the outcome of pending or threatened
litigation, and
- additional matters discussed under "Risk Factors".
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RISK FACTORS
In addition to the information contained in this prospectus, in the
prospectus supplements, and in the documents incorporated by reference into this
prospectus, you should carefully consider the following information before
making an investment decision. If any of the following risks actually occur, our
financial condition and our results of operations could be materially and
adversely affected. Additional risks and uncertainties not presently known to us
may also impair our business operations.
This prospectus also contains forward-looking statements that involve risks
and uncertainties. Our actual results may differ from those anticipated in these
forward-looking statements as a result of both the risks described below and
factors described elsewhere in this prospectus. You should read the section
above entitled "Forward-Looking Statements" for further discussion of these
matters.
THE OIL AND NATURAL GAS MARKET IS VOLATILE AND EXPOSES US TO FINANCIAL RISKS
Our profitability and cash flow are highly dependent on the market prices
of oil and natural gas. Historically, the oil and natural gas markets have
proven cyclical and volatile as a result of factors that are beyond our control.
These factors include taxes, consumer product demand, the weather, the price and
availability of alternative fuels, the level of imports and exports of oil and
natural gas, worldwide economic, political, and regulatory conditions, and
action taken by the Organization of Petroleum Exporting Countries.
Any significant decline in oil and natural gas prices or any other
unfavorable market conditions could have a material adverse affect on our
financial condition and on the carrying value of our proved reserves.
Consequently, we may not be able to generate sufficient cash flows from
operations to meet our obligations and to make planned capital expenditures.
Price declines may also affect the measure of discounted future net cash flows
of our reserves, a result that could adversely impact the borrowing base under
our credit facility and may increase the likelihood that we will incur
additional impairment charges on our oil and natural gas properties for
financial accounting purposes.
OUR HEDGING TRANSACTIONS MAY NOT ADEQUATELY PREVENT LOSSES
We cannot predict future oil and natural gas prices with certainty. To
manage our exposure to the risks inherent in such a volatile market, from time
to time we have entered into commodities futures, swap or option contracts to
hedge a portion of our oil and natural gas production against market price
changes. Hedging transactions are intended to limit the negative effect of
further price declines, but may also prevent us from realizing the benefits of
price increases above the levels reflected in the hedges.
OUR RESERVE ESTIMATES AND FUTURE NET CASH FLOWS ARE UNCERTAIN
Our estimates of the quantities of proved reserves and our projections of
both future production rates and the timing of development expenditures are
uncertain. You should not construe these reserve estimates as the current market
value of our oil and natural gas reserves. Any downward revisions of these
estimates could adversely affect our financial condition and our borrowing base
under the credit facility.
We are unaware of any technique that gives exact measurements of the
underground accumulations of oil and natural gas. Instead, those accumulations
must be estimated by our reserve engineers from T.J. Smith & Company, Inc. The
accuracy of those reserve estimates depends in large part on the quality of
available data and on the engineering and geological interpretation of our
engineers. Our engineers may calculate estimates that vary widely from estimates
calculated by another team of independent engineers. Our engineers may even make
material changes to reserve estimates based on the results of actual drilling,
testing, and production. Consequently, our reserve estimates often differ from
the quantities of oil and natural gas we ultimately recover.
We also make certain assumptions regarding future oil and natural gas
prices, production levels, and operating and development costs that may prove
incorrect when judged against our actual experience. Any
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significant variance from these assumptions could greatly affect our estimates
of reserves and of future net cash flows.
WE DEPEND ON KEY PERSONNEL TO EXECUTE OUR BUSINESS PLANS
The loss of any key executives or any other key personnel could have a
material adverse affect on our operations. We depend on the efforts and skills
of our key executives, including Joseph A. Reeves, Jr., Chairman of the Board
and Chief Executive Officer, and Michael J. Mayell, President and Chief
Operating Officer. Moreover, as we continue to grow our asset base and the scope
of our operations, our future profitability will depend on our ability to
attract and retain qualified personnel.
WE COMPETE AGAINST SIGNIFICANT PLAYERS IN THE OIL AND NATURAL GAS INDUSTRY
The oil and natural gas industry is highly competitive. Our ability to
acquire additional properties and to discover additional reserves depends on our
ability to consummate transactions in this highly competitive environment. We
compete with major oil companies, other independent oil and natural gas
companies, and individual producers and operators. Many of these competitors
have access to greater financial and personnel resources than those to which we
have access. Moreover, the oil and natural gas industry competes with other
industries in supplying the energy and fuel needs of industrial, commercial and
other consumers. Increased competition causing oversupply or depressed prices
could greatly affect our revenues.
THE OIL AND NATURAL GAS MARKET IS HEAVILY REGULATED
We are subject to various federal, state and local laws and regulations.
These laws and regulations govern safety, exploration, development, taxation and
environmental matters that are related to the oil and natural gas industry. To
conserve oil and natural gas supplies, regulatory agencies may impose price
controls and may limit our production. Certain laws and regulations require
drilling permits, govern the spacing of wells and the prevention of waste, and
limit the total number of wells drilled or the total allowable production from
successful wells. Other laws and regulations govern the handling, storage,
transportation and disposal of oil and natural gas and any byproducts produced
in oil and natural gas operations. These laws and regulations could adversely
impact our operations and our revenues.
Laws and regulations that affect us may change from time to time in
response to economic or political conditions. Thus, we must also consider the
impact of future laws and regulations that may be passed in the jurisdictions
where we operate. We anticipate that future laws and regulations related to the
oil and natural gas industry will become increasingly stringent and cause us to
incur substantial compliance costs.
THE NATURE OF OUR OPERATIONS EXPOSES US TO ENVIRONMENTAL LIABILITIES
Our operations create the risk of environmental liabilities. We may incur
liability to governments or to third parties for any unlawful discharge of oil,
gas or other pollutants into the air, soil or water. We could potentially
discharge oil or natural gas into the environment in any of the following ways:
- from a well or drilling equipment at a drill site,
- from a leak in storage tanks, pipelines or other gathering and
transportation facilities,
- from damage to oil or natural gas wells resulting from accidents during
normal operations, or
- from blowouts, cratering or explosions.
Environmental discharges may move through the soil to water supplies or to
adjoining properties, giving rise to additional liabilities. Some laws and
regulations could impose liability for failure to obtain the proper permits for,
to control the use of, or to notify the proper authorities of a hazardous
discharge.
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Such liability could have a material adverse effect on our financial condition
and our results of operations and could possibly cause our operations to be
suspended.
We may also be liable for any environmental hazards created either by the
previous owners of properties that we purchase or lease or by acquired companies
prior to the date we acquire them. Such liability would affect the costs of our
acquisition of those properties. In connection with any of these environmental
violations, we may also be charged with remedial costs.
Pollution and similar environmental risks generally are not fully
insurable. When we executed the Shell transactions in 1998, we received a
limited indemnification from Shell for pre-acquisition liabilities, but that
indemnification expired in June 1999. We received no contractual indemnification
from Cairn for pre-acquisition liabilities.
Although we do not believe that our environmental risks are materially
different from those of comparable companies in the oil and natural gas
industry, we cannot assure you that environmental laws will not result in
decreased production, substantially increased costs of operations or other
adverse effects to our combined operations and financial condition.
WE REQUIRE SUBSTANTIAL CAPITAL REQUIREMENTS TO FINANCE OUR OPERATIONS
We have substantial anticipated capital requirements. Our ongoing capital
requirements consist primarily of the need to fund our 2000 capital and
exploration budget and the acquisition, development, exploration, production and
abandonment of oil and natural gas reserves.
From 1995 to 1999, we increased our capital and exploration expenditures
from $44.8 million to $108.2 million. Our Board of Directors established our
2000 capital and exploration budget at $85.0 million (excluding purchased
reserves and interest capitalized).
We plan to finance anticipated ongoing expenses and capital requirements
with funds generated from the following sources:
- asset sales,
- available cash and cash investments,
- cash provided by operating activities,
- capital raised through debt and equity offerings and
- funds received under our bank line of credit.
Although we believe the funds provided by these sources will be sufficient
to meet our 2000 cash requirements, the uncertainties and risks associated with
future performance and revenues will ultimately determine our liquidity and our
ability to meet anticipated capital requirements. If declining prices cause our
revenues to decrease, we may be limited in our ability to replace our reserves,
to maintain current production levels and to undertake or complete future
drilling programs. As a result, our production and revenues would continue to
decrease over time and may not be sufficient to satisfy our projected capital
expenditures. We cannot assure you that we will be able to obtain additional
debt or equity financing in such a circumstance.
OUR OPERATIONS ENTAIL INHERENT CASUALTY RISKS FOR WHICH WE MAY HAVE INADEQUATE
INSURANCE
We must continually acquire, explore and develop new oil and natural gas
reserves to replace those produced and sold. Our hydrocarbon reserves and our
revenues will decline if we are not successful in our drilling, acquisition or
exploration activities. Although we have historically maintained our reserve
base primarily through successful exploration and development operations, we
cannot assure you that future efforts will be similarly successful. Casualty
risks and other operating risks could cause reserves and revenues to decline.
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Our onshore and offshore operations are subject to inherent casualty risks
such as fires, blowouts, cratering and explosions. Other risks include
pollution, the uncontrollable flows of oil, natural gas, brine or well fluids,
and the hazards of marine and helicopter operations such as capsizing, collision
and adverse weather and sea conditions. These risks may result in injury or loss
of life, suspension of operations, environmental damage or property and
equipment damage, all of which would cause us to experience substantial
financial losses.
Our drilling operations involve risks from high pressures and from
mechanical difficulties such as stuck pipes, collapsed casings and separated
cables. Our offshore properties involve higher exploration and drilling risks
such as the cost of constructing exploration and production platforms and
pipeline interconnections as well as weather delays and other risks. Although we
carry insurance that we believe is in accordance with customary industry
practices, we are not fully insured against all casualty risks incident to our
business. We do not carry business interruption insurance. Should an event occur
against which we are not insured, that event could have a material adverse
effect on our financial position and our results from operations.
OUR OPERATIONS ALSO ENTAIL SIGNIFICANT OPERATING RISKS
Our drilling activities involve risks, such as drilling non-productive
wells or dry holes, which are beyond our control. Often, the cost of drilling
and operating wells and of installing production facilities and pipelines is
uncertain. Cost overruns are common risks that often make a project
uneconomical. The decision to purchase and to exploit a prospect property
depends on the evaluations made by our reserve engineers, the results of that
are often inconclusive or subject to multiple interpretations. We may also
decide to reduce or cease our drilling operations due to title problems, weather
conditions, noncompliance with governmental requirements or shortages and delays
in the delivery or availability of equipment or fabrication yards.
Another risk of our operations is the proper marketing of our oil and
natural gas production. Effective marketing depends on factors such as the
existing market supply and demand for oil and natural gas and the limitations
imposed by governmental regulations. The proximity of our reserves to pipelines
and the available capacity of such pipelines and other transportation,
processing and refining facilities also affect our marketing efforts. Even if we
discover hydrocarbons in commercial quantities, a substantial period of time may
elapse before we begin commercial production. If pipeline facilities in an area
are insufficient, we may have to wait for the construction or expansion of
pipeline capacity before we can market production from that area. Another risk
lies in our ability to negotiate commercially satisfactory arrangements with the
owners and operators of production platforms in close proximity to our wells.
Also, natural gas wells may be shut in for lack of market demand or because of
the inadequate capacity or unavailability of natural gas pipelines or gathering
systems.
WE HAVE INCURRED A HIGH LEVEL OF DEBT
If we are unable to generate sufficient cash flows from operations in the
future to service our debt, we may need to refinance all or a portion of our
existing debt or to obtain additional financing. We cannot assure you that any
such refinancing or additional financing would be possible. Our ability to meet
our debt service obligations and to reduce our total indebtedness will depend on
our future performance and our ability to maintain or increase cash flows from
our operations. These outcomes are subject to general economic conditions and to
financial, business and other factors affecting our operations, many of which we
do not control, including the prevailing market prices for oil and natural gas.
We cannot assure you that our business will continue to generate cash flows at
or above current levels.
OUR LENDERS IMPOSE RESTRICTIONS ON US THAT LIMIT OUR ABILITY TO CONDUCT BUSINESS
Our credit facility contains restrictive covenants with which we must
comply or we risk being found in default of that debt instrument. If we default,
the holders of the debt instrument could accelerate the payment of all borrowed
funds, together with accrued and unpaid interest. We cannot assure you that we
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would be able to remit such an accelerated payment or to access sufficient funds
from alternative sources to remit any such payment. Even if we could obtain
additional financing, we cannot assure you that the terms of that financing
would be favorable or acceptable to us.
The restrictive covenants impose significant operating and financial
restraints that could impair our ability to obtain future financing, to make
capital expenditures, to pay dividends, to engage in mergers or acquisitions, to
withstand future downturns in our business or in the general economy or to
otherwise conduct necessary corporate activities. Furthermore, we have pledged
all of our offshore oil and natural gas properties and the stock of all of our
principal operating subsidiaries as collateral for the indebtedness under our
credit facility. If we are in material default of our obligations under that
credit facility, the lenders are entitled to liens on additional oil and natural
gas properties. This pledge of collateral to our credit facility lenders could
impair our ability to obtain additional financing on favorable terms.
WE ARE DEPENDENT ON OTHER OPERATORS WHO INFLUENCE OUR PRODUCTIVITY
Even on properties we do not operate, we try to maintain significant
influence over the nature and timing of exploration and development activities
to the extent possible. However, we have limited influence over operations on
some of our oil and natural gas properties, including limited control over the
maintenance of both safety and environmental standards. The operators of those
properties may:
- refuse to initiate exploration or development projects (in which case we
may propose desired exploration or development activities),
- refuse to provide us with funding for any of the projects the operators
have refused to initiate,
- initiate exploration or development projects on a slower schedule than we
prefer, or
- drill more wells or build more facilities on a project than we can
adequately finance, which may limit our participation in those projects
or limit our percentage of the revenues from those projects.
The occurrence of any of the foregoing events could have a material adverse
effect on our anticipated exploration and development activities.
OUR WORKING INTEREST OWNERS FACE CASH FLOW AND LIQUIDITY CONCERNS
If oil and natural gas prices decline, many of our working interest owners
may experience liquidity and cash flow problems. These problems may lead to
their attempting to delay the pace of drilling or project development in order
to conserve cash. Any such delay may be detrimental to our projects. In most
cases, we can influence the pace of development by enforcing our joint operating
agreements. Some working interest owners, however, may be unwilling or unable to
pay their share of the project costs as they become due. A working interest
owner may declare bankruptcy and refuse or be unable to pay its share of the
project costs and we would be obligated to pay that working interest owner's
share of the project costs.
OUR INABILITY TO ACQUIRE OR INTEGRATE ACQUIRED COMPANIES MAY INHIBIT OUR GROWTH
Our business strategy calls for us to make acquisitions of businesses that
complement or expand our current business. We cannot assure you that we will be
able to identify attractive acquisition opportunities. Even if we do identify
attractive opportunities, we cannot assure you that we will be able to complete
the acquisition or to do so on commercially acceptable terms. If we do complete
an acquisition, we must anticipate difficulties in integrating its operations,
systems, technology, management and other personnel with our own. These
difficulties may disrupt our ongoing operations, distract our management and
employees and increase our expenses. Even if we are able to overcome such
difficulties, we cannot assure you that we will realize the anticipated benefits
of any acquisition. Furthermore, we may incur additional debt or issue
additional equity securities to finance any future acquisitions. Any issuance of
additional securities may dilute the value of shares currently outstanding.
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ADDITIONAL RISK FACTORS
Please see the prospectus supplement and our filings with the Securities
and Exchange Commission incorporated herein for additional risk factors that may
be applicable to a particular class or issuance of Securities or to us in the
future.
USE OF PROCEEDS
Unless we set forth other uses of proceeds in a prospectus supplement, we
will use the net proceeds of the sale of Securities described in this prospectus
and in any prospectus supplement for retirement of existing debt, repurchase of
common or preferred stock, future acquisitions and other general corporate
purposes.
The exact amounts to be used and when the net proceeds will be applied to
corporate purposes will depend on a number of factors, including our funding
requirements and the availability of alternative funding sources. We will
disclose in a prospectus supplement any future proposal to use net proceeds from
an offering of our Securities to finance a specific purpose, if applicable.
RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
We have computed the ratio of earnings to fixed charges for each of the
following periods on a consolidated basis. You should read the ratio of earnings
to fixed charges in conjunction with our consolidated financial statements
(including the notes thereto) incorporated by reference to our most recent
Annual Report on Form 10-K as filed with the SEC.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------- ---------------------------------------------
2000 1999 1999 1998 1997 1996 1995
------- ------- ------ -------- ------- ------ ------
($000)
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Earnings (loss) before income
taxes..................... 26,900 (849) 16,867 (256,060) (28,534) 16,666 7,488
Add back:
Interest expense(2).......... 12,784 10,608 22,879 13,211 5,149 2,582 2,589
Interest portion of
rental expense............ 384 196 568 287 245 216 191
Subtract back:
Preference security
dividend.................. (2,700) (2,700) (5,400) (2,700) -- -- --
------ ------ ------ -------- ------- ------ ------
Earnings as adjusted........... 37,368 7,255 34,914 (245,262) (23,140) 19,464 10,268
====== ====== ====== ======== ======= ====== ======
Fixed charges
Interest expense............. 12,784 10,608 22,879 13,211 5,149 2,582 2,589
Interest portion of
rental expense............ 384 196 568 287 245 216 191
Preference security
dividend.................. 2,700 2,700 5,400 2,700 -- -- --
------ ------ ------ -------- ------- ------ ------
15,868 13,504 28,847 16,198 5,394 2,798 2,780
====== ====== ====== ======== ======= ====== ======
Ratio of earnings to fixed
charges...................... 2.35x (1) 1.21x (1) (1) 6.96x 3.69x
</TABLE>
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(1) Earnings were insufficient to cover fixed charges by $261.5 million and
$28.5 million for the years ended December 31, 1998 and 1997, respectively.
Earnings for the six months ended June 30, 1999 were insufficient to cover
fixed charges by $6.2 million.
(2) Includes amortization of debt expense.
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For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of pretax income from continuing operations plus fixed
charges (excluding capitalized interest). "Fixed charges" represent interest
incurred (whether expensed or capitalized), amortization of debt expense, that
portion of rental expense on operating leases deemed to be the equivalent of
interest and dividends on preferred stock.
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DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any prospectus supplement may relate. The
particular terms of the Debt Securities offered by any prospectus supplement and
the extent, if any, to which such general provisions may not apply to the Debt
Securities so offered will be described in a prospectus supplement relating to
such Debt Securities.
GENERAL
The Senior Debt Securities will be issued under an indenture (the "Senior
Indenture"), to be entered into between Meridian and a trustee named in the
applicable prospectus supplement, as trustee (the "Senior Trustee"), and the
Subordinated Debt Securities will be issued under a separate indenture (the
"Subordinated Indenture") also to be entered into between Meridian and a trustee
named in the applicable prospectus supplement, as trustee (the "Subordinated
Trustee"). The term "Trustee" as used herein shall refer to the Senior Trustee
or the Subordinated Trustee, as appropriate. The Senior Indenture and the
Subordinated Indenture are sometimes collectively referred to herein as the
"Indentures" and individually as an "Indenture". The Indentures are subject to
and governed by the Trust Indenture Act of 1939, as amended (the "TIA"), and may
be supplemented from time to time following execution.
The terms of the Debt Securities include those stated in the applicable
Indenture and those made part of such Indenture by reference to the TIA. The
Debt Securities are subject to all such terms, and holders of Debt Securities
are referred to the applicable Indenture and the TIA for a statement of those
terms.
The statements set forth below in this section are brief summaries of
certain provisions contained in the Indentures, do not purport to be complete,
and are subject to, and are qualified in their entirety by reference to, the
Indentures, including the definitions of certain terms therein, and the TIA.
Capitalized terms used in this section and not otherwise defined in this section
have the respective meanings assigned to them in the Indentures.
TERMS
The Debt Securities will be direct, unsecured obligations of Meridian. The
indebtedness represented by the Senior Debt Securities will rank equally with
all other unsecured and unsubordinated indebtedness of Meridian. The
indebtedness represented by the Subordinated Debt Securities will be
subordinated in right of payment to the prior payment in full of the Senior Debt
of Meridian as described below under "-- Subordination".
Reference is made to the prospectus supplement relating to the particular
series offered thereby for the terms of such Debt Securities, including where
applicable:
- the form and title of the Debt Securities and whether such Debt
Securities are Senior Debt Securities or Subordinated Debt Securities;
- the aggregate principal amount of the Debt Securities and any limit on
such aggregate principal amount;
- the date or dates on which the Debt Securities may be issued;
- the date or dates on which the principal of and premium, if any, on the
Debt Securities shall be payable;
- the rate or rates (which may be fixed or variable) at which the Debt
Securities shall bear interest, if any, and the date or dates from which
such interest shall accrue;
- the dates on which interest, if any, shall be payable and the record
dates for the interest payment dates;
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<PAGE> 13
- the place or places where the principal of and premium, if any, and
interest, if any, on the Debt Securities of the series will be payable;
- the period or periods, if any, within which, the price or prices at
which, and the terms and conditions upon which, the Debt Securities may
be redeemed at the option of Meridian or otherwise;
- any optional or mandatory redemption or any sinking fund or analogous
provisions;
- if other than denominations of $1,000 and integral multiples thereof, the
denominations in which the Debt Securities of the series shall be
issuable;
- if other than the principal amount thereof, the portion of the principal
amount of the Debt Securities that shall be payable upon declaration of
the acceleration of the maturity thereof in accordance with the
provisions of the applicable Indenture;
- whether payment of the principal of and premium, if any, and interest, if
any, on the Debt Securities shall be without deduction for taxes,
assessments, or governmental charges paid by the holders;
- the currency or currencies, or currency unit or currency units, in which
the principal of and premium, if any, and interest, if any, on the Debt
Securities shall be denominated, payable, redeemable or purchasable, as
the case may be;
- any Events of Default with respect to the Debt Securities that differ
from those set forth in the applicable Indenture;
- whether the Debt Securities will be convertible;
- whether the Debt Securities of such series shall be issued as a global
certificate or certificates and, in such case, the identity of the
depositary for such series;
- provisions regarding the convertibility or exchangeability of the Debt
Securities;
- covenants restricting Meridian's and its subsidiaries' ability to make
certain types of payments and investments, incur indebtedness and dispose
of assets; and
- any other terms not inconsistent with the provisions of the applicable
Indenture.
Unless otherwise indicated in the prospectus supplement relating thereto,
the Debt Securities of any series will be issued only in fully registered form
in denominations of $1,000 or any integral multiple thereof. The Debt Securities
of a series may be issuable in the form of one or more global certificates,
which will be denominated in an amount equal to all or a portion of the
aggregate principal amount of such Debt Securities. See "-- Global Debt
Securities".
Each Indenture will provide that the Debt Securities may be issued in one
or more series, in each case as established from time to time in, or pursuant to
authority granted by, a resolution of the Board of Directors of Meridian or as
established in one or more indentures supplemental to such Indenture. All Debt
Securities of one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent of the holders
of the Debt Securities of such series, for issuances of additional Debt
Securities of such series.
One or more series of Debt Securities offered hereby may be sold at a
substantial discount below their stated principal amount, bearing no interest or
interest at a rate that at the time of issuance is below market rates. The
federal income tax consequences and special considerations applicable to any
such series of Debt Securities will be described generally in the prospectus
supplement relating thereto.
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<PAGE> 14
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global certificates that will be deposited with, or on
behalf of, a depositary (the "Depositary"), or its nominee, identified in the
prospectus supplement relating to such series. Unless and until such global
certificate or certificates are exchanged in whole or in part for Debt
Securities in individually certificated form, a global Debt Security may not be
transferred or exchanged except as a whole to a nominee of the Depositary for
such global Debt Security, or by a nominee for the Depositary to the Depositary,
or to a successor of the Depositary or a nominee of such successor, except in
the circumstances described in the applicable prospectus supplement.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities and the rights of, and limitations on, owners of beneficial
interests in a global Debt Security representing all or a portion of a series of
Debt Securities will be described in the prospectus supplement relating to such
series.
SUBSIDIARY GUARANTEES
Meridian's payment obligations under a series of the Debt Securities may be
jointly and severally guaranteed (the "Subsidiary Guarantees") by certain
Subsidiaries of Meridian (the "Guarantors"). Any Subsidiary of Meridian that
guarantees any Indebtedness of Meridian will be required to execute a Subsidiary
Guarantee and become a Guarantor under the applicable Indenture. The obligations
of each Guarantor under its Subsidiary Guarantee will be limited to the maximum
amount the Guarantors are permitted to guarantee under applicable law without
creating a "fraudulent conveyance". A description of the terms of any Subsidiary
Guarantee will be contained in the prospectus supplement relating to the Debt
Securities that are being guaranteed.
EVENTS OF DEFAULT
Unless otherwise specified in the applicable prospectus supplement, each
Indenture will provide that the following will be Events of Default with respect
to any series of Debt Securities issued thereunder:
- failure to pay any interest on any Debt Security of such series when due,
continued for a period set forth in the applicable prospectus supplement;
- failure to pay principal of (or premium, if any, on) any Debt Security of
such series when due and such failure continues for a period set forth in
the applicable prospectus supplement;
- failure to perform or comply with any covenant or warranty of Meridian
contained in the Debt Securities of such series or in the applicable
Indenture, continued for a period set forth in the applicable prospectus
supplement after written notice as provided in the Indenture (other than
a default otherwise specifically dealt with in the applicable Indenture
or in any supplemental indenture); and
- any other Event of Default set forth in the applicable supplemental
indenture and prospectus supplement relating to the Debt Securities of
such series.
If an Event of Default under either Indenture with respect to Debt
Securities of any series at the time outstanding shall occur and be continuing,
then in every such case either the applicable Trustee or the holders of at least
a specified percentage of the aggregate principal amount of the outstanding Debt
Securities of that series may accelerate the maturity of all Debt Securities of
that series; provided, however, that after such acceleration, but before a
judgment or decree based on acceleration, the holders of a specified percentage
of the aggregate principal amount of outstanding Debt Securities of that series
may, under certain circumstances, rescind and annul such acceleration if all
Events of Default, other than the nonpayment of accelerated principal, have been
cured or waived as provided in the applicable Indenture.
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<PAGE> 15
Each Indenture will provide that no holder of any Debt Security will have
any right to institute any proceeding with respect to the applicable Indenture
or for any remedy thereunder, unless such holder shall have previously given to
the Trustee thereunder written notice of a continuing Event of Default and
unless the holders of at least a specified percentage of the aggregate principal
amount of the outstanding Debt Securities of such series shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as Trustee, and the Trustee shall not have received from the holders
of a majority in aggregate principal amount of the outstanding Debt Securities
of such series a direction inconsistent with such request and shall have failed
to institute such proceeding within a specified number of days. However, such
limitations do not apply to a suit instituted by a holder of a Debt Security for
enforcement of payment of the principal of (and premium, if any) or interest on
such Debt Security on or after the respective due dates expressed in such Debt
Security.
Subject to provisions in each Indenture relating to its duties in case an
Event of Default shall have occurred and be continuing, neither Trustee is under
an obligation to exercise any of its rights or powers under such Indenture at
the request or direction of any holders of Debt Securities then outstanding
under such Indenture, unless such holders shall have offered to the Trustee
thereunder reasonable indemnity. Subject to the provisions in each Indenture for
the indemnification of the Trustee thereunder, the holders of a specified
percentage of the aggregate principal amount of the outstanding Debt Securities
of any series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Trustee or
exercising any trust or power conferred on such Trustee.
Meridian will be required to furnish to each Trustee annually a statement
as to the performance by Meridian of certain of its obligations under the
applicable Indenture and as to any default in such performance.
DEFEASANCE
Each Indenture will provide that, at the option of Meridian, (A) if
applicable, Meridian will be discharged from any and all obligations in respect
of the Debt Securities of any series issued under such Indenture or (B) if
applicable, Meridian may omit to comply with certain restrictive covenants, and
that such omission shall not be deemed to be an Event of Default under the
applicable Indenture and the Debt Securities of any series issued thereunder,
and that such Debt Securities shall no longer be subject to the subordination
provisions in the case of either (A) or (B) upon irrevocable deposit with the
applicable Trustee, in trust, of money and/or U.S. government obligations that
will provide money in an amount sufficient in the opinion of a nationally
recognized accounting firm to pay the principal of and premium, if any, and each
installment of interest, if any, on such Debt Securities. With respect to clause
(B), the obligations under the applicable Indenture other than with respect to
such covenants and the Events of Default other than the Event of Default
relating to such covenants above shall remain in full force and effect. Such
trust may only be established if, among other things (i) with respect to clause
(A), Meridian has received from, or there has been published by, the Internal
Revenue Service ("IRS") a ruling or there has been a change in law, which in the
Opinion of Counsel provides that holders of such Debt Securities will not
recognize gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to federal income tax on
the same amount, in the same manner and at the same times as would have been the
case if such deposit, defeasance and discharge had not occurred; or, with
respect to clause (B), Meridian has delivered to the applicable Trustee an
Opinion of Counsel to the effect that the holders of such Debt Securities will
not recognize gain or loss for federal income tax purposes as a result of such
deposit and defeasance and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred; (ii) no Event of Default or event
that, with the passing of time or the giving of notice, or both, shall
constitute an Event of Default with respect to such Debt Securities shall have
occurred or be continuing; (iii) Meridian has delivered to the applicable
Trustee an Opinion of Counsel to the effect that such deposit shall not cause
such Trustee or the trust so created to be subject to the Investment Company Act
of 1940; and (iv) certain other customary conditions precedent.
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<PAGE> 16
SUBORDINATION
Upon any distribution to creditors of Meridian in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
the Subordinated Debt Securities will be subordinated to the extent provided in
the Subordinated Indenture in right of payment to the prior payment in full of
all Senior Debt, but the obligation of Meridian to make payment of the principal
of and interest on the Subordinated Debt Securities will not otherwise be
affected. No payment of principal or interest may be made on the Subordinated
Debt Securities at any time if a default on Senior Debt exists that permits the
holders of such Senior Debt to accelerate its maturity and the default is the
subject of judicial proceedings or Meridian receives notice of the default.
After all Senior Debt is paid in full and until the Subordinated Debt Securities
are paid in full, Holders will be subrogated to the rights of holders of Senior
Debt to the extent that distributions otherwise payable to Holders have been
applied to the payment of Senior Debt. By reason of such subordination, in the
event of a distribution of assets upon insolvency, certain general creditors of
Meridian may recover more, ratably, than holders of the Subordinated Debt
Securities.
MODIFICATION AND WAIVER
Modifications and amendments of either Indenture may be made by Meridian
and the applicable Trustee with the consent of the holders of a majority in
aggregate principal amount of all outstanding Debt Securities issued under such
Indenture that are affected by such modification or amendment; provided,
however, that no such modification or amendment may, without the consent of the
holder of each such Debt Security affected thereby:
- change the Stated Maturity of the principal of, or any installment of
interest on, any such Debt Security;
- reduce the principal amount of (or the premium), or interest on, any such
Debt Security;
- change the place or currency of payment of principal of (or premium), or
interest on, any such Debt Security;
- impair the right to institute suit for the enforcement of any payment on
or with respect to any such Debt Security;
- reduce the percentage of outstanding Debt Securities of any series
necessary to modify or amend the applicable Indenture;
- reduce the percentage of aggregate principal amount of outstanding Debt
Securities of any series necessary for waiver of compliance with certain
provisions of the applicable Indenture or for waiver of certain defaults;
and
- modify any provisions of such Indenture relating to the modification and
amendment of such Indenture or the waiver of past defaults or covenants,
except as otherwise specified.
The holders of a percentage of the aggregate principal amount, as specified
in the applicable prospectus supplement, of the outstanding Debt Securities of a
series may waive compliance by Meridian with certain restrictive provisions of
the applicable Indenture. The holders of a percentage of the aggregate principal
amount, as specified in the applicable prospectus supplement, of the outstanding
Debt Securities of a series may waive any past default under the applicable
Indenture.
THE TRUSTEE
Both Indentures will provide that, except during the continuance of an
Event of Default, the Trustee thereunder will perform only such duties as are
specifically set forth in the applicable Indenture. During the existence of an
Event of Default, the Trustee will exercise such rights and powers vested in it
under such Indenture and use the same degree of care and skill in its exercise
as a prudent person would exercise under the circumstances in the conduct of
such person's own affairs.
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<PAGE> 17
Both Indentures and the provisions of the TIA incorporated by reference
therein will contain limitations on the rights of each of the Trustees, should
it become a creditor of Meridian, to obtain payment of claims in certain cases
or to realize on certain property received by it in respect of any such claim as
security or otherwise. Each of the Trustees will be permitted to engage in other
transactions with Meridian or any Affiliate; provided, however, that if it
acquires any conflicting interest (as defined in the applicable Indenture or in
the TIA), it must eliminate such conflict or resign.
NO PERSONAL LIABILITY OF OFFICERS, DIRECTORS, EMPLOYEES OR STOCKHOLDERS
No director, officer, employee or stockholder, as such, of Meridian or any
of its affiliates shall have any personal liability in respect of the
obligations of Meridian under either of the Indentures or the Debt Securities by
reason of his, her or its status as such.
APPLICABLE LAW
The Indentures and the Debt Securities offered hereby will be governed by,
and construed in accordance with, the laws of the State of New York.
DESCRIPTION OF COMMON STOCK AND PREFERRED STOCK OF MERIDIAN
Our articles of incorporation authorize the issuance of 200,000,000 shares
of common stock at $0.01 par value and 25,000,000 shares of preferred stock at
$1.00 par value. As of June 30, 2000 there were 46,707,231 shares of common
stock outstanding held by approximately 1,000 holders of record and 3,982,906
shares of preferred stock outstanding held by one holder of record. Because the
following description of our capital stock is a summary, it does not contain all
the information that may be important to you. You should read the following
documents for more complete information:
- our amended articles of incorporation,
- our amended by-laws,
- the Stock Rights and Restrictions Agreement dated June 30, 1998,
- the Certificate of Designation dated June 30, 1998, and
- the Registration Rights Agreement dated June 30, 1998.
COMMON STOCK
All shares of our common stock shall rank equally and be identical within
their classes in all respects regardless of series, except as to the terms that
may be specified by the Board of Directors. All shares of any one series of a
class of common stock shall be of equal rank and identical in all respects,
except that shares of any one series issued at different times may differ as to
the dates on which dividends shall accrue and be cumulative. Shares of common
stock of any one class or series may be issued with either full or limited
voting powers or with no voting powers. Any rights, designations, preferences,
or limitations on common stock shall be clearly stated in the resolution adopted
by the Board of Directors providing for the issuance of such stock and may be
made dependent upon facts ascertainable outside such resolution.
Except as required by law or provided in any resolution adopted by our
Board of Directors designating any series of our preferred stock, the holders of
common stock:
- will possess the exclusive voting power of Meridian,
- are entitled to one vote for each share held of record on all matters
submitted to a vote of shareholders,
- are entitled to receive any dividends as may be declared by our Board of
Directors in its sole discretion out of legally available funds, and
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<PAGE> 18
- in the event of our liquidation, dissolution or winding up, are entitled
to share ratably in all assets remaining after payment of liabilities and
after the liquidation preference of any outstanding preferred stock.
Holders of common stock have no preemptive rights, no rights to convert
their common stock into any other securities and no cumulative voting rights at
any election of directors. Each holder of common stock is entitled to vote in
person or by proxy the number of shares owned by him in the election of each
director for whose election he has a right to vote. No redemption or sinking
fund provisions apply to the common stock. All of the outstanding shares of
common stock are, and any shares offered hereby will be, fully paid and
nonassessable. The registrar and transfer agent of our common stock is American
Stock Transfer & Trust Co.
PREFERRED STOCK
Our articles of incorporation authorize our Board of Directors to issue
shares of preferred stock in one or more series. For each series of preferred
stock, our Board of Directors shall designate the number of shares of the
series, the applicable voting powers of the series, and any rights,
designations, preferences, or limitations on the series. Shares of preferred
stock of any one class or series may be issued with either full or limited
voting powers or with no voting powers.
All of the shares of our preferred stock shall rank equally and be
identical within their classes in all respects regardless of series, except as
to the terms that may be specified by the Board of Directors. All shares of any
one series of a class of preferred stock shall be of equal rank and identical in
all respects, except that shares of any one series issued at different times may
differ as to the dates on which dividends shall accrue and be cumulative.
Holders of preferred stock have no preemptive rights and no cumulative voting
rights at any election of directors.
You should refer to the Certificate of Designation dated June 30, 1998,
which sets forth the terms of the 3,982,906 shares of preferred stock we issued
to an affiliate of Shell Oil Company as consideration for the acquisition of
substantially all of Shell's onshore oil and natural gas property interests in
south Louisiana.
PLAN OF DISTRIBUTION
We may sell the Securities:
- through underwriters as named in the applicable prospectus supplement,
- directly to investors or to other purchasers, or
- through a combination of these two methods of sale.
Any agent, dealer or underwriter may be deemed to be an underwriter within
the meaning of the Securities Act. The prospectus supplement relating to any
offering of the Securities will set forth the offering terms, including the name
or names of any underwriters, the purchase price of the Securities and the
proceeds to us from such sale, any underwriting discounts, commissions or other
items constituting compensation to the underwriter, any initial public offering
price, any underwriting discounts, commissions or other items allowed or
reallowed or paid to dealers, and any securities exchanges on which the
Securities may be listed. Only underwriters so named in the prospectus
supplement are deemed to be underwriters in connection with the Securities
offered in this prospectus.
If underwriters are used in the sale, they will acquire the Securities for
their own account and may resell the Securities from time to time in one or more
transactions at a fixed price or prices that are subject to change, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The Securities may be offered to the
public either through underwriting syndicates represented by one or more
managing underwriters or directly by one or more
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<PAGE> 19
underwriting firms. Unless otherwise set forth in the prospectus supplement, the
obligations of the underwriters to purchase the Securities will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all the offered Securities if any are purchased. Any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
If so indicated in the prospectus supplement, we will authorize
underwriters to solicit offers by certain specified purchasers to purchase the
Securities from us at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. These contracts will be subject only
to those conditions set forth in the prospectus supplement and the prospectus
supplement will set forth the commission payable for solicitation of these
contracts. The underwriters soliciting these contracts will have no
responsibility for the validity or performance of any such contracts.
The Securities may or may not be listed on a national securities exchange
(other than the common stock, which is listed on the New York Stock Exchange.)
Any common stock sold pursuant to a prospectus supplement will be listed on the
New York Stock Exchange, subject to official notice of issuance. Any
underwriters to whom we sell the Securities for public offering and sale may
make a market in those Securities, but the underwriters will not be obligated to
do so and may discontinue any market making activities at any time without
notice. We cannot assure you that there will be an active trading market for any
Securities.
In connection with distributions of the Securities, we may enter into
hedging transactions with broker-dealers through which those broker-dealers may
sell the Securities registered hereunder in the course of hedging, through short
sales, the positions they assume with us.
We may enter into agreements with any underwriters who participate in the
distribution of the Securities to reimburse them for certain expenses, to
provide contribution to payments they may be required to make in any
distribution, and to indemnify them against certain civil liabilities, including
liabilities under the Securities Act.
Certain underwriters and their associates may be customers of, engage in
transactions with and perform services for us in the ordinary course of
business.
LEGAL MATTERS
Unless otherwise specified in a prospectus supplement relating to the
Securities, certain legal matters with respect to the validity of the Securities
will be passed upon for us by Fulbright & Jaworski L.L.P., Houston, Texas and
for the underwriters, if any, by counsel to be named in the appropriate
prospectus supplement.
EXPERTS
The consolidated financial statements of The Meridian Resource Corporation,
appearing in The Meridian Resource Corporation's Annual Report (Form 10-K) for
the year ended December 31, 1999, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
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RESERVE ENGINEERS
We have derived the estimates of proved oil and natural gas reserves and
related future net revenues and the present value thereof as of December 31,
1998 and 1999, included in Meridian's Annual Report on Form 10-K for the year
ended December 31, 1999, from the reserve report of T.J. Smith & Company, Inc.,
independent petroleum engineers. We have incorporated all of that information by
reference herein on the authority of T.J. Smith & Company, Inc. as experts in
such matters.
We have derived the estimates of proved oil and natural gas reserves and
related future net revenues and the present value thereof as of December 31,
1997, included in Meridian's Annual Report on Form 10-K for the year ended
December 31, 1999, from the reserve report of the Ryder Scott Company. We have
incorporated all of that information by reference herein on the authority of the
Ryder Scott Company as experts in such matters.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other
information with the Securities and Exchange Commission pursuant to the Exchange
Act. You may read and copy any document we file at the Securities and Exchange
Commission's public reference rooms at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Regional Offices of the Commission at Seven
World Trade Center, Suite 1300, New York, New York 10048, and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please
call the Securities and Exchange Commission at 1-800-SEC-0300 for further
information on the public reference rooms. Our filings are also available to the
public at the Securities and Exchange Commission's web site on the Internet at
http://www.sec.gov. You can also inspect and copy such reports, proxy
statements, and other information regarding us at the offices of the New York
Stock Exchange at 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to incorporate by
reference into this prospectus the information we file with it, which means that
we can disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to be an
important part of this prospectus. Information that we file with the Securities
and Exchange Commission after the date of this prospectus will automatically
update and supersede this information.
We incorporate by reference the following documents and any future filings
we make with the Securities and Exchange Commission under Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act until our offering is complete:
- Meridian's Annual Report on Form 10-K for the fiscal year ended December
31, 1999.
- Meridian's Quarterly Reports on Form 10-Q for the three months ended
March 31, 2000 and for the three months ended June 30, 2000.
- Meridian's Current Report on Form 8-K dated July 20, 2000.
Upon oral or written request, we will provide without charge to each
person, including any beneficial owner, to whom this prospectus is delivered a
copy of any document incorporated by reference in this prospectus, other than
exhibits to any such document not specifically described above. Send your
requests to P. Richard Gessinger, Executive Vice President and Chief Financial
Officer, The Meridian Resource Corporation, 1401 Enclave Parkway, Suite 300,
Houston, Texas 77077, telephone number: 281-597-7000.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the distribution of the common stock covered by this registration statement. We
will bear all of the expenses except as otherwise indicated.
<TABLE>
<S> <C>
Registration fee under the Securities Act................... $26,400
Printing and engraving expenses*............................
Legal fees and expenses*....................................
Accounting fees and expenses*...............................
Fees and expenses of trustee and counsel*...................
Stock exchange listing fees.................................
Miscellaneous*..............................................
-------
Total............................................. $
-------
</TABLE>
---------------
* Estimated solely for the purpose of this Item. Actual expenses may be more or
less, depending on the nature of the offering and the type of security.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Texas law and our articles of incorporation and bylaws include provisions
designed to limit the liability of our officers and directors and, in certain
circumstances, to indemnify our officers and directors against certain
liabilities. These provisions are designed to encourage qualified individuals to
serve as our officers and directors.
Indemnification. Article 2.02-1 of the Texas Business Corporation Act
provides that any director or officer of a Texas corporation may be indemnified
against judgments, penalties (including excise and similar taxes), fines,
settlements, and reasonable expenses actually incurred by him in connection with
or in defending any of the following:
- a threatened, pending, or completed action, suit, or proceeding whether
civil, criminal, administrative, arbitrative, or investigative,
- an appeal in such an action, suit, or proceeding, or
- an inquiry or investigation that could lead to such an action, suit, or
proceeding in which he is a party or to which he is subject by reason of
his position.
With respect to any proceeding arising from actions taken in his official
capacity as a director or officer, he may be indemnified so long as he conducted
himself in good faith and reasonably believed that such conduct was in the best
interest of the corporation. In cases not concerning conduct in his official
capacity as a director or officer, a director or officer may be indemnified so
long as he conducted himself in good faith and he reasonably believed that his
conduct was not opposed to the best interests of the corporation. In the case of
any criminal proceeding, a director or officer may be indemnified if he had no
reasonable cause to believe his conduct was unlawful. Indemnification is
mandatory if a director or officer is wholly successful on the merits or
otherwise in defense of any proceeding. Article Nine of Meridian's Articles of
Incorporation and Article XII of Meridian's bylaws require the indemnification
of officers and directors to the fullest extent permitted by the Texas Business
Corporation Act.
The bylaws also allow Meridian to maintain insurance coverage that
indemnifies any officer or director against liabilities asserted against him in
such capacity.
II-1
<PAGE> 22
Exculpation Of Monetary Liability. Effective as of August 28, 1989, Article
7.06.B of the Texas Miscellaneous Corporation Laws Act was amended to allow a
corporation to include provisions in its articles of incorporation that relieve
its directors of monetary liability for breaches of their fiduciary duty to the
corporation, its shareholders or its members, except under certain
circumstances, including:
- a breach of the director's duty of loyalty to the corporation, its
shareholders or its members,
- an act or omission not in good faith or that involves intentional
misconduct or a knowing violation of the law,
- a transaction from which the director derived an improper benefit, or
- an act or omission for which the director's liability is expressly
provided for by statute.
Article Ten of Meridian's Articles of Incorporation provides that our
directors are not liable to us or to our shareholders for monetary damages for
an act or omission in their capacity as director, subject to the above
restrictions. These limitations on a director's liability may not affect claims
arising under the federal securities laws.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors and officers and controlling persons pursuant to
the foregoing provisions, we have been advised that, in the opinion of the SEC,
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
2.1 -- Agreement and Plan of Merger dated March 27, 1998,
between Meridian, LOPI Acquisition Corp., Shell Louisiana
Onshore Properties, Inc. and Louisiana Onshore
Properties, Inc. (incorporated by reference from
Meridian's Current Report on Form 8-K dated June 30,
1998).
2.2 -- Purchase and Sale Agreement dated effective October 1,
1997, by and between The Meridian Resource Corporation
and Shell Western E&P Inc. (incorporated by reference
from Meridian's Current Report on Form 8-K dated June 30,
1998).
*12.1 -- Statement re Computation of Ratios.
21.1 -- Subsidiaries of Meridian (incorporated by reference to
Exhibit 21.1 of Meridian's Annual Report on Form 10-K for
the year ended December 31, 1998).
*23.1 -- Consent of Ernst & Young LLP.
**23.2 -- Consent of T. J. Smith & Company, Inc.
**23.3 -- Consent of Ryder Scott Company.
**24.1 -- Power of attorney (contained on the signature page of
this Registration Statement as filed on July 21, 2000).
</TABLE>
---------------
* Filed herewith.
** Previously filed.
II-2
<PAGE> 23
ITEM 17. UNDERTAKINGS
We hereby undertake:
To file, during any period in which the offer or sale is being made, a
post-effective amendment to this registration statement:
- to include any prospectus required by Section 10(a)(3) of the Securities
Act,
- to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement; notwithstanding the foregoing, any increase
or decrease in the volume of securities being offered (if the total
dollar value of securities being offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form or prospectus filed
with the Securities and Exchange Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more than
a twenty percent (20%) change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement, and
- to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or in
any material change to such information in the registration statement;
provided, however, that the undertakings set forth in the previous two
clauses do not apply if the registration statement is on Form S-3 and the
information required to be included in a post-effective amendment by
those clauses is contained in periodic reports that we filed with or
furnished to the Securities and Exchange Commission pursuant to Section
13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
That, for purposes of determining any liability under the Securities Act,
each of our filings pursuant to Section 13(a) or Section 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
That, for purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by us pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration statement as of
the time it was declared effective.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons pursuant to
the foregoing provisions, or otherwise, Meridian has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Meridian of expenses incurred or paid by
our director, officer, or controlling person in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Act, we certify that we have
reasonable grounds to believe that we meet all of the requirements for filing on
Form S-3 and have duly caused this amendment to the registration statement to be
signed on our behalf by the undersigned, thereunto duly authorized, in the City
of Houston, State of Texas on September 19, 2000.
THE MERIDIAN RESOURCE CORPORATION
By: /s/ JOSEPH A. REEVES, JR.
------------------------------------
Joseph A. Reeves, Jr.,
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in their respective
capacities on September 19, 2000.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ JOSEPH A. REEVES, JR. Chairman of the Board and Chief Executive
----------------------------------------------------- Officer, Director (principal executive
Joseph A. Reeves, Jr. officer)
* President, Director
-----------------------------------------------------
Michael J. Mayell
/s/ P. RICHARD GESSINGER Executive Vice President and Chief Financial
----------------------------------------------------- Officer (principal financial officer)
P. Richard Gessinger
* Preferred Director
-----------------------------------------------------
J.H. Sheffield
* Director
-----------------------------------------------------
Gary A. Messersmith
* Director
-----------------------------------------------------
Joe E. Kares
* Director
-----------------------------------------------------
E.L. Henry
* Director
-----------------------------------------------------
Jack A. Prizzi
* Director
-----------------------------------------------------
James T. Bond
*By: /s/ JOSEPH A. REEVES, JR.
------------------------------------------------
Joseph A. Reeves, Jr., Attorney-in-Fact
</TABLE>
II-4
<PAGE> 25
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
2.1 -- Agreement and Plan of Merger dated March 27, 1998,
between Meridian, LOPI Acquisition Corp., Shell Louisiana
Onshore Properties, Inc. and Louisiana Onshore
Properties, Inc. (incorporated by reference from
Meridian's Current Report on Form 8-K dated June 30,
1998).
2.2 -- Purchase and Sale Agreement dated effective October 1,
1997, by and between The Meridian Resource Corporation
and Shell Western E&P Inc. (incorporated by reference
from Meridian's Current Report on Form 8-K dated June 30,
1998).
*12.1 -- Statement re Computation of Ratios.
21.1 -- Subsidiaries of Meridian (incorporated by reference to
Exhibit 21.1 of Meridian's Annual Report on Form 10-K for
the year ended December 31, 1998).
*23.1 -- Consent of Ernst & Young LLP.
**23.2 -- Consent of T. J. Smith & Company, Inc.
**23.3 -- Consent of Ryder Scott Company.
**24.1 -- Power of attorney (contained on the signature page of
this Registration Statement as filed on July 21, 2000).
</TABLE>
---------------
* Filed herewith.
** Previously filed.
