<PAGE> 1
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
JUNE 12, 1998
BELCO OIL & GAS CORP.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
State of Nevada 1-14256 13-3869719
(State or Other (Commission File Number) (IRS Employer Identification No.)
Jurisdiction of Incorporation)
</TABLE>
767 Fifth Avenue, 46th Floor
New York, New York 10153
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 644-2200
===============================================================================
<PAGE> 2
Item 5. Other Events
Belco Oil & Gas Corp. announced the closing on June 12, 1998 of its
agreement under which Belco may invest up to US$141 million in Big Bear
Exploration Ltd., a Canadian oil and gas company.
Belco's initial investment included the purchase, through its wholly owned
Canadian subsidiary of approximately US$10.5 million of 5% Convertible Preferred
shares of Big Bear at approximately US$0.85 per share (Canadian $1.20 per share)
with each such share convertible into one common share of Big Bear.
Concurrently, Jeff Tonken, the CEO of Big Bear, purchased approximately
US$525,000 of the Company's Convertible Preferred shares at approximately US$.90
per share (Canadian $1.27 per share). In connection with the purchase of the
Convertible Preferred stock of Big Bear, four of Belco's nominees, including
Robert A. Belfer, Chairman and CEO of Belco, and Laurence D. Belfer, President
and COO of Belco, joined Big Bear's Board of Directors, which will consist of
eight directors.
Belco has also been issued approximately US$120 million of Special
Acquisition Warrants at a price of approximately US$0.72 per warrant (Canadian
$1.016 per warrant). Payments for the Special Acquisition Warrants may be made
from time to time to fund oil and gas property acquisitions by Big Bear which
have been approved by Belco. Each warrant is exchangeable for one share of the
common stock of Big Bear at no further cost. The issuance of the Special
Acquisition Warrants follows Big Bear shareholder approval obtained on June 9,
1998.
In connection with the issuance of the Special Acquisition Warrants, Belco
deposited a US$60 million letter of credit and 3,436,000 shares of Belco Common
Stock into an escrow account with Bank One, Texas, N.A. acting as escrow agent.
Belco may substitute, from time to time and in its sole discretion, cash,
letters of credit or other securities or investments for the 3,436,000 shares of
Belco Common Stock. The US$60 million letter of credit was issued by The Chase
Manhattan Bank pursuant to Belco's existing credit facility and has the effect
of reducing available borrowing under the credit facility by US$60 million. The
3,436,000 shares of Belco Common Stock are deemed issued but not outstanding
under Nevada corporate law and will therefore not affect the number of shares of
Belco Common Stock outstanding nor any calculations relating thereto. The letter
of credit and shares of Belco Common Stock, or any cash or other assets
substituted therefore, may be utilized by Belco from time to time, prior to June
12, 1999, in Belco's sole discretion, to purchase some or all of the Special
Acquisition Warrants. On June 12, 1999, assets remaining in the escrow account
will be returned to Belco.
In addition, Belco has the option, while the Special Acquisition Warrants
are outstanding, to purchase an additional US$10.5 million of Convertible
Preferred shares of Big Bear on the same terms as its initial purchase.
Belco has purchased the Convertible Preferred Shares and the Special
Acquisition Warrants through its subsidiary for investment purposes and does not
have any present intention to increase or dispose of its holdings in Big Bear
other than upon exercise of its option to purchase additional Convertible
Preferred shares or upon conversion or exercise, respectively, of the
Convertible Preferred shares or Special Acquisition Warrants into common shares
of Big Bear. No other person is acting jointly or in concert with Belco at this
time and Belco does not exercise control or direction over any other securities
of Big Bear.
Belco is an independent energy company engaged in the exploration,
development, acquisition and production of natural gas and oil.
<PAGE> 3
This Current Report on Form 8-K includes forward looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Although Belco believes that its expectations
are based on reasonable assumptions, it can give no assurance that its goals
will be achieved. Important factors that could cause actual results to differ
materially from those in the forward looking statements herein include the
timing and extent of changes in commodity prices for oil and gas, the need to
develop and replace reserves, environmental risks, drilling and operating risks,
risks related to exploration and development, uncertainties about the estimates
of reserves, competition, government regulation and the ability of Belco to meet
its stated business goals.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Not Applicable.
(c) Exhibits.
99.1 Press release dated June 15, 1998
<PAGE> 4
===============================================================================
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.
Date: June 24, 1998. BELCO OIL & GAS CORP.
By: /s/ Robert A. Belfer
----------------------------------
Name: Robert A. Belfer
---------------------------------
Title: Chairman and Chief
Executive Officer
--------------------------------
<PAGE> 1
EXHIBIT 99.1
Belco
FOR IMMEDIATE RELEASE: Monday, June 15, 1998
CONTACT: Dominick J. Golio - Chief Financial Officer (212) 508-9513
BELCO ANNOUNCES CLOSING OF INVESTMENT IN
CANADIAN-BASED BIG BEAR EXPLORATION LTD.
New York, New York - Belco Oil & Gas Corp. (NYSE:BOG) announced the closing
on June 12, 1998 of its agreement under which Belco may invest up to US$141
million in Big Bear Exploration Ltd., a Canadian oil and gas company.
Belco's initial investment included the purchase, through its wholly owned
Canadian subsidiary of approximately US$10.5 million of 5% Convertible Preferred
shares of Big Bear at approximately US$0.85 per share (Canadian $1.20 per share)
with each such share convertible into one common share of Big Bear.
Concurrently, Jeff Tonken, the CEO of Big Bear, purchased approximately
US$525,000 of the Company's Convertible Preferred shares at approximately US$.90
per share (Canadian $1.27 per share). In connection with the purchase of the
Convertible Preferred stock of Big Bear, four of Belco's nominees, including
Robert A. Belfer, Chairman and CEO of Belco, and Laurence D. Belfer, President
and COO of Belco, joined Big Bear's Board of Directors, which will consist of
eight directors.
Belco has also been issued approximately US$120 million of Special
Acquisition Warrants at a price of approximately US$0.72 per warrant (Canadian
$1.016 per warrant). Payments for the Special Acquisition Warrants may be made
from time to time to fund oil and gas property acquisitions by Big Bear which
have been approved by Belco. Each warrant is exchangeable for one share of the
common stock of Big Bear at no further cost. The issuance of the Special
Acquisition Warrants follows Big Bear shareholder approval obtained on June 9,
1998.
In addition, Belco has the option, while the Special Acquisition Warrants
are outstanding, to purchase an additional US$10.5 million of Convertible
Preferred shares of Big Bear on the same terms as its initial purchase.
Belco has purchased the Convertible Preferred Shares and the Special
Acquisition Warrants through its subsidiary for investment purposes and does not
have any present intention to increase or dispose of its holdings in Big Bear
other than upon exercise of its option to purchase additional Convertible
Preferred shares or upon conversion or exercise, respectively, of the
Convertible Preferred shares or Special Acquisition Warrants into common shares
of Big Bear. No other person is acting jointly or in concert with Belco at this
time and Belco does not exercise control or direction over any other securities
of Big Bear.
Belco is an independent energy company engaged in the exploration,
development, acquisition and production of natural gas and oil.
This press release includes forward looking statements within the meaning of
Section 27A of the Securities
<PAGE> 2
Act of 1993 and Section 21E of the Securities Exchange Act of 1934. Although BOG
believes that its expectations are based on reasonable assumptions, it can give
no assurance that its goals will be achieved. Important factors that could cause
actual results to differ materially from those in the forward looking statements
herein include the timing and extent of changes in commodity prices for oil and
gas, the need to develop and replace reserves, environmental risks, drilling and
operating risks, risks related to exploration and development, uncertainties
about the estimates of reserves, competition, government regulation and the
ability of the Company to meet its stated business goals.
767 FIFTH AVENUE NEW YORK, NY 10153
WWW.BELCOOIL-GAS.COM
