<PAGE>
As filed with the Securities and Exchange Commission on September 29, 2000.
REGISTRATION NO. 333-_________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
ESENJAY EXPLORATION, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 73-1421000
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 NORTH WATER STREET
SUITE 1100 S.
CORPUS CHRISTI, TEXAS 78471
(361) 883-7464
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
MICHAEL E. JOHNSON
500 NORTH WATER STREET
SUITE 1100 S.
CORPUS CHRISTI, TEXAS 78471
(361) 883-7464
(Name, address and telephone number, including area code, of agent for service)
----------------------
WITH COPIES TO
David B. Christofferson Samuel N. Allen
Esenjay Exploration, Inc. Porter & Hedges, L.L.P.
One Allen Center 700 Louisiana, 35th Floor
500 Dallas, Suite 2920 Houston, Texas 77002
Houston, Texas 77002 (713) 226-0600
(713) 739-7100
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the Registration Statement becomes effective.
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, 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, 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. / /
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE REGISTRATION FEE
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share 99,566 $3.1875 $317,366.63 $83.78
========================================================================================================================
</TABLE>
(1) Pursuant to Rule 457(c), the registration fee is calculated based upon the
average of the high and low sale prices for common stock in the NASDAQ Small-Cap
Market on September 22, 2000.
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.
================================================================================
<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER 29, 2000
--------------------------------------------------------------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT OFFER THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SEC
IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND WE
ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
--------------------------------------------------------------------------------
PROSPECTUS
99,566 SHARES
ESENJAY EXPLORATION, INC.
COMMON STOCK
------------
The selling stockholders identified in this prospectus are offering up to
99,566 shares of our common stock that are currently issued and outstanding.
We are not offering any shares of our common stock for sale under this
prospectus and we will not receive any of the proceeds from the sale of shares
by selling stockholders under this prospectus.
Our common stock is traded on the NASDAQ Small-Cap Market under the symbol
"ESNJ." On September 27, 2000, the last reported sale price of our common stock
was $3.50 per share.
------------
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. YOU SHOULD CONSIDER CAREFULLY
THE RISK FACTORS BEGINNING ON PAGE 6 IN THIS PROSPECTUS.
------------
--------------------------------------------------------------------------------
Neither the SEC nor any state securities commission has approved these
securities or determined that this prospectus is accurate or complete. Any
representation to the contrary is illegal.
--------------------------------------------------------------------------------
This prospectus is dated September 29, 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
------------
<S> <C>
Where You Can Find More Information 3
Esenjay Exploration, Inc. 4
The Offering 4
Use of Proceeds 4
Cautionary Statement Regarding Forward-looking Statements 5
Risk Factors 6
Selling Stockholders 9
Plan of Distribution 9
Legal Matters 10
Experts 10
</TABLE>
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-3 (Reg. No.
_________) with respect to this offering. This prospectus, which is a part of
the registration statement, does not contain all the information contained in
the registration statement, including its exhibits and schedules. For further
information about us, you should refer to the registration statement, including
the exhibits and schedules. Statements we make in this prospectus about certain
contracts or other documents are not necessarily complete. When we make these
statements, we refer you to the copies of the contracts or documents that are
filed as exhibits to the registration statement, because those statements are
qualified in all respects by reference to those exhibits. The registration
statement, including exhibits and schedules, is on file at the offices of the
SEC and may be inspected without charge.
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings, including the registration statement,
are available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You also may read and copy any document we file at the SEC's
public reference rooms in Washington, D.C.; New York, New York; and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information about
the public reference rooms.
SEC rules allow us to include some of the information required to be in the
registration statement by incorporating that information by reference to
documents we file with the SEC. That means we can disclose important information
to you by referring you to those documents. The information incorporated by
reference is an important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this information.
We incorporate by reference the documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act:
- Annual Report on Form 10-KSB for the year ended December 31, 1999, as
amended on May 1, 2000;
- Quarterly Report on Form 10-QSB for the quarter ended March 31, 2000;
and
- Quarterly Report on Form 10-QSB for the quarter ended June 30, 2000.
You may request a copy of these filings, which we will provide to you at no
cost, by writing or telephoning us at the following address:
Esenjay Exploration, Inc.
One Allen Center
Suite 2920
Houston, Texas 77002
Attn: David B. Christofferson, General Counsel
(713) 739-7100
<PAGE>
ESENJAY EXPLORATION, INC.
BUSINESS
We are an independent energy company engaged in the exploration for and
development of natural gas and oil. We have assembled a diverse inventory of
technology enhanced natural gas and oil exploration projects primarily along the
Texas and Louisiana Gulf Coast. These exploration projects include interests in
28 projects we acquired on May 14, 1998 from Esenjay Petroleum Corporation and
Aspect Resources LLC pursuant to an Acquisition Agreement and Plan of Exchange.
The exploration projects also include our interests in projects acquired both
before and after consummation of those acquisitions. We, Esenjay Petroleum and
Aspect have spent several years identifying and evaluating many of the
exploration projects. Each of the exploration projects differs in scope and
character and consists of one or more types of assets, such as:
- 3-D seismic data;
- leasehold positions;
- lease options;
- working interests in leases; or
- royalty interests or other mineral rights.
In September of 1999, we acquired 3DX Technologies Inc. Through that
acquisition, we expanded our ownership in certain of our exploration projects,
added interests in other projects, and expanded our technical staff.
Our principal executive offices are located at 500 North Water Street,
Corpus Christi, Texas 78471 and our phone number is (361) 883-7464. We also
maintain corporate finance and business development offices at One Allen Center,
Suite 2920, Houston, Texas 77002, and our telephone number at that office is
(713) 739-7100.
THE OFFERING
All of the common stock offered by this prospectus is being sold by certain
of our existing shareholders.
USE OF PROCEEDS
We will not receive any proceeds from the sale of our common stock under
this prospectus.
<PAGE>
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The statements made in this prospectus or in the documents we have
incorporated by reference that are not statements of historical fact are
"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.
Forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "intend,"
"estimate," "anticipate" or "believe," or similar terminology.
The forward-looking statements include discussions about business strategy
and expectations concerning market position, future operations, seismic,
drilling or exploration operations, profitability, liquidity and capital
resources, and statements concerning the integration into our business of the
operations we have acquired. Although we believe that the expectations in these
statements are reasonable, we cannot give any assurance that the expectations
will be correct.
We caution you not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus.
Uncertainties are inherent in estimating quantities of proved oil and
natural gas reserves and in projecting future rates of production and timing of
development expenditures, including many factors beyond our control. Reserve
engineering is a subjective process of estimating underground accumulations of
oil and natural gas that cannot be measured in an exact way, and the accuracy of
any reserve estimate is a function of the quality of available data and of
engineering and geological interpretation and judgment. As a result, estimates
made by different engineers often vary from one another. In addition, results of
drilling, testing and production after the date of an estimate may justify
revisions of the estimate and the revisions, if significant, would change the
schedule of any further production and development drilling. Accordingly,
reserve estimates generally are different from quantities of oil and natural gas
that ultimately are recovered. Drilling and exploration plans are subject to
modification based upon seismic analysis, drilling results, production results,
and capital availability. Capital availability also may be affected by many
factors, including market conditions and exploration results.
Additional important factors that could cause actual results to differ
materially from our expectations are disclosed elsewhere in this prospectus.
All subsequent written and oral forward-looking statements attributable to
us or persons acting on our behalf are expressly qualified in their entirety by
those factors.
<PAGE>
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN DETERMINING
WHETHER TO PURCHASE COMMON STOCK OFFERED BY THIS PROSPECTUS.
WE WILL ENCOUNTER SIGNIFICANT EXPLORATION RISKS, INCLUDING RISKS RELATED TO
OUR HEAVY RELIANCE ON 3-D SEISMIC TECHNOLOGIES AND COMPUTER AIDED EXPLORATION.
Exploratory drilling is a speculative activity, and there can be no
assurance as to the success of our drilling program. Our strategy is to enhance
the value of our exploration projects through the use of 3-D seismic and
computer aided exploration technologies, with an emphasis on direct hydrocarbon
detection technologies. These technologies create computer generated 3-D
displays of subsurface geological formations that enable our explorationists to
detect seismic anomalies and structural features that are not apparent in 2-D
seismic surveys. However, these technologies require greater pre-drilling
expenditures than traditional drilling strategies. Even when fully used and
properly interpreted, 3-D seismic data and visualization techniques only assist
geoscientists in identifying subsurface structures and hydrocarbon indicators,
and do not conclusively allow the interpreter to know if hydrocarbons will in
fact be present in these structures. Exploratory drilling and, to a lesser
extent, development drilling involve a high degree of risk that no commercial
production will be obtained or that the production will be insufficient to
recover drilling and completion costs. The costs of drilling, completing and
operating wells are uncertain. Our future drilling operations may be curtailed,
delayed or canceled as a result of numerous factors, including title problems,
weather conditions, compliance with governmental requirements and shortages or
delays in the delivery of equipment. Furthermore, completion of a well does not
assure a profit on the investment or a recovery of drilling, completion and
operating costs.
WE HAVE A HISTORY OF LOSSES AND WORKING CAPITAL DEFICITS.
We have incurred substantial losses, and no assurance can be given that we
will be profitable. For the years ended December 31, 1998 and 1999, we had net
losses of $29,369,483 and $10,250,238, respectively. We had net income of
$538,907 for the six months ended June 30, 2000. Our accumulated deficit as of
June 30, 2000 was $52,198,194.
Even if we generate substantial cash flow from operations, we could
continue to generate losses for financial reporting purposes under our
successful efforts accounting procedures.
WE WILL REQUIRE SUBSTANTIAL CAPITAL TO FUND OUR EXPLORATION AND DEVELOPMENT
PROJECTS.
Historically, we have funded our capital expenditures through a combination
of internally generated funds, equity and long-term debt financing, and
short-term financing arrangements. Based on our current operations, we
anticipate that our capital expenditures through the end of 2000 will be funded
from:
- operating cash flows;
- the availability of credit under our bank credit agreement and other
credit facilities;
- sales of promoted interests in the exploration projects to industry
partners; and
- if the foregoing financing sources are inadequate, the sale of
interests in our assets to unaffiliated third parties.
MORTGAGES ON GAS AND OIL PROPERTIES LIMIT OUR ABILITY TO BORROW ADDITIONAL
FUNDS.
Substantially all of our oil and gas properties have been pledged to secure
our indebtedness under our credit facilities or to secure the financing relating
to specific oil and gas projects. These liens limit our ability to borrow
additional funds. The amount of borrowings under our bank credit agreement is
based on the maintenance of adequate natural gas and oil reserves to support the
amount borrowed. Should the estimated proved natural gas and oil reserves
<PAGE>
or the price to be received for these reserves decline below the required
reserve value, we would be required either to accelerate payment, repay a
specified amount of the borrowings so as to have adequate reserve value to
support the borrowing, or provide additional collateral for the loan. A
failure to comply with the covenants and restrictions contained in our credit
agreements, or to obtain a waiver to those covenants and restrictions, will
constitute a default under the terms of the bank credit agreement and other
financing agreements, resulting in the indebtedness under all of those credit
arrangements becoming immediately due and payable and enabling the lenders to
foreclose against the collateral for the loans.
WE ARE CONTROLLED BY TWO PRINCIPAL STOCKHOLDERS.
Esenjay Petroleum currently owns approximately 25.99% and Aspect currently
owns approximately 24.69% of our issued and outstanding common stock. Therefore,
each of Esenjay Petroleum and Aspect are in a position to substantially
influence the outcome of stockholder votes on the election of directors and
other matters. In addition, if Esenjay Petroleum or Aspect were to sell a
significant number of their shares of common stock in the public market, the
prevailing market price of the common stock could be adversely affected.
SEVERAL OF OUR DIRECTORS HAVE CONFLICTS OF INTEREST.
Michael E. Johnson and Charles J. Smith each own 50% of Esenjay Petroleum's
common stock and Alex M. Cranberg owns a controlling interest in Aspect.
Furthermore, Alex Cranberg and Alex Campbell are employed by Aspect. Their
respective relationships with Esenjay Petroleum and Aspect create conflicts of
interest with their serving as our directors.
Aspect has retained a substantial interest in many of the projects that
Aspect transferred to us, and Aspect has the right to acquire oil and gas
interests in areas adjacent to those covered by our exploration projects.
Aspect's participation in these additional exploration projects creates a
conflict of interest with us. Aspect and Esenjay have entered into an agreement
that for a period of three years beginning May 19, 1998, before selling any
projects that Aspect owns now or may own during the three year period in certain
defined counties surrounding the exploration projects, Aspect will first offer
to sell the project to us at a price and on terms identical to those initially
offered to third party purchasers. Nonetheless, Aspect may continue to
participate in oil and gas exploration activities outside the areas established
by the acquisition agreement and the areas adjacent thereto. Aspect is not
obligated to offer us a participation in those projects, and Aspect will be in
competition with us to that extent.
WE ENCOUNTER RISKS IN OUR HEDGING ACTIVITIES.
In order to manage our exposure to price risks in the marketing of oil and
natural gas, we have in the past and expect to continue to enter into oil and
gas hedging arrangements. These arrangements may include futures contracts on
the New York Mercantile Exchange, fixed price delivery contracts and financial
swaps. These hedging arrangements may apply to only a portion of our production
and provide only partial price protection against a decline in natural gas
prices. While intended to reduce the effects of volatility of the price of oil
and natural gas, these transactions may limit potential gains if oil and natural
gas prices rise substantially over the price established by the hedging
transaction. In addition, these transactions may expose us to the risk of
financial loss in certain circumstances, including instances in which:
- production is less than expected;
- there is a widening of price differentials between delivery points for
our production and the delivery point assumed in the arrangement;
<PAGE>
- the counter parties to our hedge contracts fail to perform under the
contracts; or
- a sudden, unexpected event has a material impact on oil or natural gas
prices.
In February of 2000, in conjunction with its financing with Deutsche
Bank, the Company restructured all existing natural gas hedges with an
affiliate of Deutsche Bank. Pursuant to these hedges, the Company had 9,381
MMBtu/day of net production hedged in the first quarter of 2000, and 9,031
MMBtu/day hedged for the second quarter of 2000, and it has 8,646 MMBtu/day
hedged for the third quarter of 2000, 8,278 MMBtu/day for the fourth quarter
of 2000, 7,161 MMBtu/day for the first quarter of 2001, 6,880 MMBtu/day for
the second quarter of 2001, 6,600 MMBtu/day for the third quarter of 2001,
and 6,319 MMBtu/day for the fourth quarter of 2001. All hedges are at $2.45
per MMTBtu. Concurrent with the new hedges, all prior natural gas hedges were
retired. In September of 1999, the Company entered into a "collar" hedge
arrangement on certain of its oil production. It entered into an oil hedge
for a quantity equal to 300 barrels of oil per day in the fourth quarter of
1999, 280 barrels of oil per day in the first quarter of 2000, 256 barrels of
oil per day in the second quarter of 2000, and 237 barrels of oil per day in
the third quarter of 2000, all of which transactions were structured with an
$18.00 floor price and a $20.40 cap price. These positions were supplemented
with oil hedges for 238 barrels of oil per day in the fourth quarter of 2000,
and 175 barrels of oil per day, 168 barrels of oil per day, 161 barrels of
oil per day and 154 barrels of oil per day for the first through fourth
quarters of 2001, respectively, all of which supplemental hedges were at
$21.03 per barrel. Second quarter 2000 hedges approximated 59% of the
Company's natural gas and 61% of its oil production for such quarter. Future
percentages will vary.
In addition to our swap arrangement required by our credit agreement
with Deutsche Bank A.G., New York Branch, we have 5,000 MMBtu's per day of
our production hedged for the period September 1st through December 31st 2000
at a price of $4.70 per MMBtu, and 5,000 MMBtu's per day for the period
January 1st through December 31st 2000 at a price of $4.01 per MMBtu. As a
result of the above-referenced transactions, the Company has hedged varying
quantities of its natural gas and oil production through December of 2001.
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information concerning each of the
selling stockholders.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED BEFORE OWNED AFTER
OFFERING OFFERING (1)
---------------------------------- ------------------------------
PERCENT SHARES TO PERCENT
NAME NUMBER OF CLASS(2) BE SOLD NUMBER(1) OF CLASS(2)(3)
---- ------ ----------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
David W. Berry 686,832 (4) 3.64% 12,000 674,832 3.57%
Alex M. Cranberg 4,751,968 (5)(6) 25.16% 12,000 4,739,968 25.11%
Michael E. Johnson 5,439,846 (7)(8) 28.80% 12,000 5,427,846 28.74%
Alex B. Campbell 36,658 (9) * 12,000 24,658 *
William D. Dodge, III 36,000 (9) * 12,000 24,000 *
Jack P. Randall 36,000 (9) * 12,000 24,000 *
Jeffrey B. Pollicoff 26,000 (10) * 12,000 14,000 *
Hobort A. Smith 37,667 (9) * 12,000 25,667 *
John S. Bockelman 1,753 * 1,753 -- *
Therese B. Strain 1,322 * 1,322 -- *
L'Alene Morris 491 * 491 -- *
</TABLE>
* Indicates less than 1%.
(1) Includes all shares of common stock with respect to which each person
directly, or through any contract, arrangement, understanding, relationship
or otherwise, has or shares the power to vote or to direct voting of the
shares or to dispose or to direct the disposition of the shares. Includes
shares that may be purchased under stock options exercisable within 60
days.
(2) Based on 18,885,169 shares of common stock outstanding at August 24, 2000,
plus, for each beneficial owner, those number of shares underlying
exercisable options. Percent of class for any shareholder listed is
calculated without regard to shares of common stock issuable to others upon
exercise of outstanding stock options or warrants. Any shares a shareholder
is deemed to own by having the right to acquire by exercise of a stock
option or warrant are considered to be outstanding solely for the purpose
of calculating that shareholder's ownership percentage.
(3) Assumes the sale of all of the shares offered hereby.
(4) Includes 456,000 shares of common stock issuable upon the exercise of
currently exercisable options.
(5) Includes 24,000 shares of common stock issuable upon the exercise of
currently exercisable options.
(6) Includes (i) 54,112 shares of common stock owned by the spouse of Mr.
Cranberg, and (ii) 4,661,856 shares of common stock owned by Aspect, which
includes 18,750 shares issuable upon the exercise of warrants, as to which
Mr. Cranberg disclaims beneficial ownership.
(7) Includes 424,000 shares of common stock issuable upon the exercise of
currently exercisable options.
(8) Includes 4,896,415 shares of common stock owned by Esenjay Petroleum
Corporation, and 12,500 shares of common stock issuable upon exercise of
currently exercisable warrants held by Esenjay Petroleum Corporation, as to
which Mr. Johnson disclaim beneficial ownership.
(9) Includes 24,000 shares of common stock issuable upon the exercise of
currently exercisable options.
(10) Includes 12,000 shares of common stock issuable upon the exercise of
currently exercisable options.
PLAN OF DISTRIBUTION
<PAGE>
Under this prospectus, the selling stockholders may sell shares of our
common stock in transactions on exchanges or markets on which our common
stock may be listed for trading, in privately-negotiated transactions, in an
underwritten offering, or by a combination of these methods of sale, at fixed
prices that may be changed, at market prices prevailing at the time of sale,
at prices related to prevailing market prices or at negotiated prices. As
used in this prospectus, "selling stockholders" includes pledgees, donees,
transferees and other successors in interest to the selling stockholders
selling shares received from a selling stockholder after the date of this
prospectus. The selling stockholders may effect these transactions by selling
the shares of common stock to or through broker-dealers, and the
broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the selling stockholders or the purchasers of the shares
for whom the broker-dealers may act as agent or to whom they sell as
principal, or both (which compensation to a particular broker-dealer might be
in excess of customary commissions).
Other methods by which the shares of our common stock may be sold
include, without limitation:
- "at the market" to or through market makers or into an existing
market for our common stock;
- in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected
through agents;
- through transactions in options or swaps or other derivatives,
whether exchange-listed or otherwise;
- through short sales; or
- any combination of any these methods of sale.
The selling stockholders also may enter into option or other
transactions with broker-dealers that require the delivery to those broker
dealers of the common stock offered by this prospectus, and the
broker-dealers may resell that common stock under this prospectus. The
selling stockholders also may make sales under Rule 144 of the Securities Act
if an exemption from registration is available.
The selling stockholders and any broker-dealers who act in connection
with the sale of shares of our common stock under this prospectus may be
deemed to be "underwriters" as that term is defined in the Securities Act,
and any commissions received by them and profit on any resale of the shares
of our common stock as principal might be deemed to be underwriting discounts
and commissions under the Securities Act.
After we are notified by a selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of common
stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to
this prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing:
- the name of each such selling stockholder and of the
participating broker-dealer(s);
- the number of securities involved;
- the price at which the securities were sold;
- the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
- that such broker-dealer(s) did not conduct any investigations to
verify the information set out or incorporated by reference in
this prospectus; and
- other facts material to the transaction.
LEGAL MATTERS
Certain legal matters relating to the validity of the common stock
will be passed upon by Porter & Hedges, L.L.P., Houston, Texas.
<PAGE>
EXPERTS
The consolidated financial statements incorporated in this
prospectus by reference from the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1999 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein
by reference, and have been so incorporated in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an estimate of the amount of fees and expenses to
be incurred in connection with the issuance and distribution of the
securities registered hereby, other than underwriting discounts and
commissions.
<TABLE>
<S> <C>
Registration Fee Under Securities Act $ 84
Legal Fees 10,000
Accounting Fees 5,000
Printing and Engraving 1,000
Miscellaneous Fees 416
-------------
Total $ 16,500
=============
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law (the "DGCL") grants every
corporation the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee, or agent
of the corporation, or is or was serving at the request of the corporation as
a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses (including
attorneys' fees) judgments, fines, and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit, or
proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
The DGCL also grants every corporation the power to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending, or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any claim, issue,
or matter as to which such person shall have been adjudged to be liable to
the corporation unless and only to the extent that the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper.
The DGCL provides that to the extent that a present or former director
or officer of a corporation has been successful on the merits or otherwise in
defense of any action, suit, or proceeding referred to in the statute, or in
defense of any claim, issue, or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection therewith.
The Registrant's Certificate of Incorporation contains provisions which
indemnify and exculpate the directors and officers of the Registrant from and
against certain liabilities. The Registrant's Certificate of Incorporation
provides that each person who at any time is or was a director or officer of
the Registrant, and is threatened to be or is made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative, by reason of the fact that such
person is or was a director or officer of the Registrant, or is or was
serving at the request of the Registrant as a director, officer, partner,
venturer, proprietor, member, employee, trustee, agent or similar functionary
of another domestic or foreign corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other for-profit or
non-profit enterprise, whether the basis of the proceeding is an alleged
action in such person's official capacity or in another capacity while
holding such office, shall be indemnified and held harmless by the Registrant
to the fullest extent authorized by the DGCL, except that such person shall
not be
<PAGE>
indemnified if he is convicted of a crime in a criminal proceeding. The
Registrant's Certificate of Incorporation provides that a director of the
Registrant shall have no personal liability to the Registrant or its
shareholders for monetary damages for breach of fiduciary duty as a director,
except for liability (a) for any breach of the director's duty of loyalty to
the Registrant or its shareholders, (b) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(c) for acts or omissions specified in Section 174 of the DGCL regarding the
unlawful payment of dividends and the unlawful purchase or redemption of the
Registrant's stock, and (d) for any transaction from which the director
derived an improper personal benefit.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
NO.
---
<S> <C>
*5(a) -- Opinion of Porter & Hedges, L.L.P.
*23(a) -- Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
*23(b) -- Consent of Deloitte & Touche LLP
*24(a) -- Power of Attorney
</TABLE>
----------------------------
* Filed herewith
(b) Financial Statement Schedules
Schedules are omitted since the information required to be submitted has
been included in the Consolidated Financial Statements of Esenjay
Exploration, Inc., or the notes thereto, or the required information is not
applicable.
ITEM 17. UNDERTAKINGS.
a. UNDERTAKING TO UPDATE
The undersigned Registrant hereby undertakes:
i. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to:
(1) include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(2) 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 in the
Registration Statement; and
(3) include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") that are incorporated by reference in the
Registration Statement.
ii. 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.
iii. 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.
<PAGE>
b. UNDERTAKING WITH RESPECT TO DOCUMENTS INCORPORATED BY REFERENCE
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of
the Exchange Act that is incorporated by reference in this 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.
c. UNDERTAKING WITH RESPECT TO INDEMNIFICATION
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant 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 the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant 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, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Esenjay Exploration, Inc. certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Corpus Christi, Texas on September
29, 2000.
ESENJAY EXPLORATION, INC.
By: /s/ Michael E. Johnson
----------------------
Michael E. Johnson, PRESIDENT, CHIEF
EXECUTIVE OFFICER AND DIRECTOR
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement on Form S-3 has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ David B. Christofferson Senior Vice President, General Counsel September 29, 2000
--------------------------- and Chief Financial Officer
David B. Christofferson
* Controller and September 29, 2000
--------------------------- Principal Accounting Officer
Angela D. Conway
* Chairman and Director September 29, 2000
---------------------------
David W. Berry
Director September 29, 2000
---------------------------
Alex B. Campbell
* Director September 29, 2000
---------------------------
William D. Dodge
Director September 29, 2000
---------------------------
Alex M. Cranberg
* Director September 29, 2000
---------------------------
Jeffrey B. Pollicoff
Director September 29, 2000
---------------------------
Jack P. Randall
* Director September 29, 2000
---------------------------
Hobart A. Smith
* /s/ David B. Christofferson September 29, 2000
---------------------------------
By: David B. Christofferson
Attorney-in-Fact
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
NO.
---
<S> <C>
*5(a) -- Opinion of Porter & Hedges, L.L.P.
*23(a) -- Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
*23(b) -- Consent of Deloitte & Touche LLP
*24(a) -- Power of Attorney
</TABLE>
----------------------------
* Filed herewith
