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) December 19, 1996
MIDDLE BAY OIL COMPANY, INC.
(Exact name of registrant as specified in its charter)
Alabama 0-21702 63-1081013
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
115 South Dearborn Street, Mobile, Alabama 36602
(Address of principal executive offices)
Registrant's telephone number, including area code (334) 432-7540
N/A
(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION AND DISPOSITION OF ASSETS
On February 10, 1997, Middle Bay Oil Company, Inc. (the "Registrant" or
"Middle Bay") entered into an Agreement and Plan of Merger with Bison Energy
Corporation ("Bison") whereby Bison will be merged with a wholly-owned
subsidiary of Middle Bay in exchange for Middle Bay common stock and cash.
Bison, as the surviving corporation, would become wholly-owned by Middle Bay.
Bison is a privately-owned domestic exploration and production company
with assets located in Kansas and Oklahoma. Pursuant to the Agreement and
Plan of Merger, Middle Bay will issue 1,167,556 shares of its common stock and
net cash consideration of $5.9 million, subject to adjustment, to Bison in
exchange for the stock of Bison. Bison presently owns 562,000 shares of Middle
Bay common stock, which shares would be cancelled upon consumation of the
merger. Bison's value was determined by estimating the discounted reserve
value of its properties and through negotiation. The cash portion of the
consideration for the merger is being financed through the issuance of
1,000,000 shares of Middle Bay Series A Preferred Stock to Kaiser-Francis Oil
Company ("Kaiser-Francis") for $6,000,000 ($6.00 per preferred share). The
preferred shares will be issued on a private placement basis pursuant
to a Stock Purchase Agreement dated September 4, 1996 between the Company and
Kaiser-Francis, as reported in the Registrant's Form 8-K Current Report filed
September 19, 1996.
The Bison merger is expected to add an estimated 606,681 barrels of oil
and natural gas liquids and 2.58 billion cubic feet of natural gas to Middle
Bay's reserves. Subsequent to the merger, Middle Bay will have total proved
reserves of approximately 1,996,626, barrels of oil and Ngls, and 11,544,238
Mcf of Natural gas with a discounted value of $32,465,021. In addition,
Middle Bay will acquire approximately 8,860 acres of undeveloped leases, an
interest in the Spivey-Grabs gas processing plant and operating facilities in
Attica, Kansas and Cushing, Oklahoma. The transaction has a discounted value
of $10,000,000 according to Middle Bay's evaluation.
Closing of the transaction is expected to occur on or before February 28,
1997.
Bison's president and sole shareholder, C. J. Lett, III, is a party to the
Agreement and Plan of Merger. Mr. Lett has agreed to continue as President
and a Director of Bison, and he will be nominated for election as a Director
of Middle Bay at the next annual meeting of shareholders.
ITEM 7.FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS
(A) and (B)
It is impractical to furnish with this Report the financial statements
and the pro forma financial information relative to the acquisition described
in Item 2. Such information will be furnished by amendment under cover of
Form 8 within 60 days from the date of this Report.
(C) Exhibits
2.1 - Agreement and Plan of Merger dated December 10, 1996 among Middle
Bay, Bison Energy Corporation and C. J. Lett, III.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: February 20, 1997
MIDDLE BAY OIL COMPANY, INC.
By: /s/ Frank C. Turner, II
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Signature
Vice President
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Title
Frank C. Turner, II
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Name
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AGREEMENT AND PLAN OF MERGER AMONG
MIDDLE BAY OIL COMPANY, INC.,
BISON ENERGY CORPORATION (ALABAMA),
BISON ENERGY CORPORATION (KANSAS),
AND C. J. LETT, III
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and
entered into this 10th day of February, 1997 by and among MIDDLE BAY OIL
COMPANY, INC., an Alabama corporation ("Middle Bay"), BISON ENERGY CORPORATION,
an Alabama corporation ("Bison/Alabama"), and BISON ENERGY CORPORATION, a
Kansas corporation ("Bison") (Bison/Alabama and Bison being hereinafter
sometimes collectively referred to as the "Constituent Corporations"), and C.
J. LETT, III, an individual ("Lett").
BACKGROUND AND PURPOSE
A. Middle Bay is an independent oil and gas exploration company
presently engaged in the exploration, development and production of oil and gas
in certain of the contiguous United States. The business activities of Middle
Bay include increasing its reserves of natural gas and oil through acquisition
of proven reserves.
B. Middle Bay is authorized to issue 5,000,000 shares of common
stock (hereinafter referred to as "Middle Bay Common Stock"), of which
1,880,917 shares are issued and outstanding as of the date of this Agreement.
Middle Bay is also authorized to issue 2,500,000 shares of preferred stock,
166,667 shares of which are issued as Series A Preferred Stock as of the date
of this Agreement. Middle Bay is the registrant described in a Form 10K-SB
Annual Report and Quarterly Reports on Form 10Q-SB filed with the Securities
and Exchange Commission (the "SEC") during 1996 pursuant to Section 13 of the
Securities Exchange Act of 1934 (the "1934 Act").
C. Bison is authorized to issue 3,000 shares of common stock,
$1.00 par value (hereinafter referred to as "Bison Common Stock"), of which 500
shares are issued and outstanding as of the date of this Agreement. Bison has
no shares of preferred stock authorized or issued.
D. Bison/Alabama is a newly-formed, wholly-owned subsidiary of
Middle Bay and has authorized capital stock consisting of 1,000 shares of
common stock, without par value ("Bison/Alabama Common Stock"), of which 1,000
shares are issued and outstanding. Middle Bay has no other subsidiaries.
E. Bison has one wholly-owned subsidiary which is part of Bison's
consolidated business operation. This subsidiary is (the "Subsidiary"): Bison
Production Company, a Kansas corporation.
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F. The laws of the State of Alabama and the State of Kansas
permit a merger of the Constituent Corporations, and Bison/Alabama and Bison
desire to be merged together, with Bison being the Surviving Corporation and
becoming a wholly-owned subsidiary of Middle Bay in accordance with the terms
of this Agreement.
G. The oil and gas assets of Bison are set forth in Exhibit "A"
attached hereto. In such exhibit, the abbreviations "WI" and "NRI" mean working
interest and net revenue interest, respectively, each expressed as a percentage
of all of the interests of the respective well. The term "properties," with
respect to Bison, includes within its meaning, collectively, all of Bison's oil
and gas leasehold interests, other mineral interests, royalty interests and
other rights and interests in, to or related to the wells described in the
respective exhibit, including, without limitation, all such interests, or
portions of any interest, which relate to or affect property upon which the
wells are located. Such term includes within its meaning, additionally, all
wells (producing, nonproducing, injection and disposal wells), all of the
personal property, fixtures, equipment, casing and tubing, compressors,
pipelines, meters, production, gathering, treating, processing, compression,
dehydration, salt water disposal, and pipeline equipment and facilities,
gathering systems, drip facilities, tanks, machinery, equipment, tools, dies,
vessels and other facilities; and all contracts, commitments, agreements,
farmouts, operating agreements, joint operating agreements, division orders,
production sales contracts, gas processing contracts, surface leases,
easements, rights-of-way and any and all other real and personal property and
fixtures and agreements relating to, used, useful or held for use, whether on
or of the premises, in connection with the properties and the oil and gas wells
described and listed in the respective exhibit, together with all geological
and geophysical maps, records, land, production and well files in possession of
Bison.
H. Middle Bay's professional staff has reviewed and determined
the undiscounted reserve values and the discounted present values of reserves
of the properties. Such values, as determined by Middle Bay, are set forth in
Exhibit "B" attached hereto.
I. Lett is the record and beneficial owner of all 500 shares of
the issued and outstanding Bison common stock, constituting 100% of all issued
and outstanding capital stock of Bison.
J. The Boards of Directors of Middle Bay and each of the
Constituent Corporations have determined that it is advisable and for the
benefit of Middle Bay and each of the Constituent Corporations and their
respective shareholders that Bison be merged with Bison/Alabama on the terms
and conditions hereinafter set forth, and by resolutions duly adopted have
adopted the terms and conditions of this Agreement; and directed that the
proposed merger be submitted to the shareholders of the Constituent
Corporations and recommended to such shareholders approval of the terms and
conditions hereinafter set forth.
THE AGREEMENT
NOW, THEREFORE, for and in consideration of the premises and of the
mutual agreements, promises and covenants contained herein, it is agreed by and
between the parties hereto, subject to the conditions
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hereinafter set forth and in accordance with the Alabama Business Corporation
Act and the Kansas Business Corporation Act (together, the "Acts"), that Bison
shall be and hereby is, at the Merger Date (as hereinafter defined in Section
5.2), merged with Bison/Alabama (Bison, subsequent to such merger, being
hereinafter sometimes referred to as the "Surviving Corporation"), with the
corporate existence of the Surviving Corporation to be continued under the name
"Bison Energy Corporation," and that the terms and conditions of the merger
hereby agreed upon, the mode of carrying the same into effect and the manner of
converting shares of the Constituent Corporations are and shall be as follows:
ARTICLE I
MERGER
1.1 MERGER. On the Merger Date, Bison/Alabama shall be merged with
Surviving Corporation, and Surviving Corporation shall continue in existence
and the Merger shall in all respects have the effect provided for in Section
10-2B-11.06 of the Alabama Business Corporation Act (the "Alabama Act") and
Section 17-6702 of the Kansas General Corporation Code (the "Kansas Act"), such
effect being that the Surviving Corporation shall become a wholly-owned
subsidiary of Middle Bay (the merger of the Constituent Corporations
hereinafter referred to as the "Merger").
1.2 SEPARATE EXISTENCE. Without limiting the foregoing, on and
after the Merger, the separate existence of Bison/Alabama shall cease, and, in
accordance with the terms of this Agreement, the title to all property and
assets, tangible and intangible, owned by each of the Constituent Corporations
shall be vested in the Surviving Corporation without reversion or impairment;
the Surviving Corporation shall have all liabilities of each of the Constituent
Corporations; and any proceeding pending against any Constituent Corporation
may be continued as if the merger did not occur or the Surviving Corporation
may be substituted in its place.
1.3 ACTIONS TO EFFECTUATE MERGER. Prior to and from and after the
Merger, Middle Bay and the Constituent Corporations shall take all such action
as shall be necessary or appropriate in order to fully and properly effectuate
the Merger.
ARTICLE II
TERMS OF TRANSACTION
2.1 MANNER AND BASIS OF CONVERTING SHARES. Upon the Merger Date:
(a) The Bison Common Stock issued and outstanding
immediately prior to the Merger shall, by virtue of the Merger and
without any action on the part of the holder thereof, thereupon be
converted into 1,167,556 shares of Middle Bay Common Stock, subject to
the provisions of Section 2.2 below, the shares of Common Stock of
Middle Bay required for such purpose being drawn from authorized but
unissued shares of Middle Bay.
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(b) Each share of Bison/Alabama Common Stock outstanding
and owned of record by Middle Bay, its sole shareholder, immediately
prior to the Merger Date, shall become one issued share of Common
Stock of the Surviving Corporation.
(c) Middle Bay shall pay to Lett the sum of $5,900,000,
plus the amounts as calculated and incorporated in Exhibit "C" hereof,
as the cash portion of the Merger consideration.
2.2 EXCHANGE OF CERTIFICATES. Upon or after the Merger, each
holder of an outstanding certificate or certificates representing the "old"
shares of Bison Common Stock (the "old certificates") which immediately prior
thereto represented shares of Bison Common Stock will, upon surrender of such
old certificate or certificates, be exchanged for a certificate or certificates
(the "new certificates"), which new certificate or certificates Middle Bay
agrees to provide free and clear of all liens and claims, representing the
number of shares of Middle Bay Common Stock into which the aggregate number of
shares of Bison Common Stock previously represented by such old certificate or
certificates surrendered shall have been converted pursuant to Section 2.1 of
this Agreement.
2.3 STATUS PENDING EXCHANGE OF CERTIFICATES. Until surrendered and
exchanged, each outstanding old certificate shall be deemed for all corporate
purposes, other than the payment of dividends or liquidating or other
distributions, if any, to holders of record of Middle Bay Common Stock, to
represent the number of whole shares of Middle Bay Common Stock into and for
which the shares of Bison Common Stock theretofore represented by such old
certificate shall have been converted. No dividend or liquidating or other
distribution, if any, payable to holders of record at or after the Merger Date
of shares of Middle Bay Common Stock, or payable subsequent to the Merger to
holders of record at a time prior to the Merger of shares of Bison Common
Stock, shall be paid to the holders of outstanding old certificates; provided,
however, that upon surrender and exchange of such outstanding old certificates,
there shall be paid to the record holders of the new certificates issued in
exchange therefor the amount, without interest thereon, of dividends and
liquidating or other distributions, if any, which theretofore have become
payable to holders of record on or after the Merger Date with respect to the
number of whole shares of Middle Bay Common Stock represented by such new
certificates.
2.4 NO TRANSFERS PENDING MERGER. As of the Merger Date, no
transfer of the shares of Bison Common Stock outstanding prior to the Merger
Date shall be made on the stock transfer books of the Surviving Corporation.
If, after the Merger Date, old certificates are presented to Middle Bay or the
Surviving Corporation, they shall be exchanged pursuant to this Article II.
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ARTICLE III
DIRECTORS AND OFFICERS
3.1 DIRECTORS AND OFFICERS OF SURVIVING CORPORATION. The persons
who shall be the directors and officers of the Surviving Corporation
immediately following the Merger Date shall be as follows, which officers and
directors shall continue to hold office as provided in the Bylaws of the
Surviving Corporation:
John J. Bassett Chairman of the Board of Directors
C. J. Lett, III President and Director
3.2 DIRECTORS AND OFFICERS OF MIDDLE BAY. The directors and
officers of Middle Bay holding office immediately prior to the Merger shall be
the directors and officers of Middle Bay immediately following the Merger Date;
provided, however, that at Closing Middle Bay shall appoint Lett, and Lett
agrees to serve, as the Executive Vice President of Middle Bay and Middle Bay
shall include Lett in its recommended slate of directors to be elected at the
annual meeting of shareholders of Middle Bay to be held on or about May 30,
1997.
ARTICLE IV
ARTICLES OF INCORPORATION AND BYLAWS
4.1 ARTICLES OF INCORPORATION. From and after the Merger Date, the
Articles of Incorporation of Bison, as in effect at such date, shall be the
Articles of Incorporation of the Surviving Corporation and shall continue in
effect until the same shall be altered, amended or repealed as therein provided
or as provided by law.
4.2 BYLAWS. From and after the Merger, the Bylaws of Bison, in
effect at such date, shall continue as the Bylaws of the Surviving Corporation
and shall continue in effect until the same shall be altered, amended or
repealed as therein provided or as provided by law.
ARTICLE V
THE MERGER
5.1 SHAREHOLDER APPROVAL. By executing this Agreement, Lett, as
sole shareholder and director of Bison, shall have by consent approved the
Merger as provided by the Kansas Act. If this Agreement is not terminated and
abandoned pursuant to the provisions of Section 17.13 hereof, this Agreement
shall be consummated in accordance with Article VI hereof, and this Agreement
and the Articles of Merger and Certificate of Merger, respectively,
incorporating the terms of this Agreement shall be filed and recorded in
accordance with the Alabama Act and the Kansas Act as soon as practicable after
Closing. The Boards of Directors and the proper officers of the Constituent
Corporations are authorized, empowered and directed to
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do any and all acts and things, and to make, execute, deliver, file and record
any and all instruments, papers and documents which shall be or become
necessary, proper or convenient to carry out or put into effect any of the
provisions of this Agreement or of the merger herein provided for.
5.2 MERGER DATE. The merger shall become effective according to
law on the latter of the date on which the Alabama Articles of Merger
incorporating this Agreement is filed with the Secretary of State of Alabama or
the date the Kansas Secretary of State issues the Kansas Certificate of Merger
(said date is herein referred to as the "Merger Date"); however, effective time
for the economic effect of the Merger is intended by the parties for all
purposes to be as of 12:01 a.m. Central Standard Time on February 1, 1997.
5.3 APPROVAL BY MIDDLE BAY. By signing below, Middle Bay confirms
that the Board of Directors has approved and adopted this Agreement and that
Middle Bay has full authority under Alabama law to execute the terms of this
Agreement and to approve the Merger as sole shareholder of Bison/Alabama.
5.4 EXPENSES. Each party shall bear its own expenses incidental to
the preparation of this Agreement, the carrying out of the provisions of this
Agreement and the consummation of the transactions contemplated hereby,
including but not limited to engineering, legal and accounting expenses.
ARTICLE VI
CLOSING
6.1 TIME AND PLACE. The Merger and related transactions
contemplated by this Agreement shall be consummated (such consummation being
herein referred to as the "Closing") on a date and at a time selected by Middle
Bay, by Notice given to Bison at least two business days before Closing, at
Middle Bay's offices at the address set forth in Article XV of this Agreement.
The date and time of Closing may be referred to herein as the "Closing Date."
The Closing Date shall be February 28, 1997, or such other date to which the
parties may reasonably agree.
6.2 ACTIONS OF MIDDLE BAY AND BISON/ALABAMA AT CLOSING. At
Closing, Middle Bay and Bison/Alabama shall deliver to Bison:
(a) properly executed instruments effecting the Merger;
(b) evidence of authority, satisfactory in form and
content to Bison's counsel, with respect to the actions of the Board
of Directors and shareholders of Middle Bay to approve the Merger and
the transactions contemplated by this Agreement and, with respect to
Middle Bay, to execute and deliver this Agreement and all of the other
agreements, certificates, instruments and documents executed pursuant
to or as an incident to this Agreement or the Closing, such evidence
to include, without limitation, appropriate certificates of corporate
resolution and incumbency and properly
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certified copies of consent actions taken by the shareholders of
Middle Bay, certificates of good standing issued by the Secretary of
State of the State of Alabama with respect to Middle Bay and
Bison/Alabama, and the opinion of counsel for Middle Bay regarding the
foregoing matters;
(c) the cash payable to the shareholders of Bison in
accordance with Section 2.1(c) hereof, in cash or equivalent form of
payment; and
(d) provide for the delivery of certificates representing
the Middle Bay Common Stock issued for delivery to Lett in accordance
with Section 2.2 hereof.
6.3 ACTIONS OF BISON AND LETT AT CLOSING. At Closing, Bison and
Lett shall deliver or make available to Middle Bay:
(a) properly executed instruments effecting the Merger
(b) evidence of authority, satisfactory in form and
content to Middle Bay's counsel, with respect to the actions of the
Board of Directors and shareholder of Bison to approve the Merger and
the transactions contemplated by this Agreement and, with respect to
Bison, to execute and deliver this Agreement and all of the other
agreements, certificates, instruments and documents executed pursuant
to or as an incident to this Agreement or the Closing, such evidence
to include, without limitation, appropriate certificates of corporate
resolution and incumbency and properly certified copies of consent
actions taken by the shareholders of Bison, certificates of good
standing issued by the Secretary of State of the State of Kansas with
respect to Bison, and an opinion of counsel for Bison regarding the
foregoing matters; and
(c) all financial and operational records with respect to
Bison.
ARTICLE VII
MATTERS RELATIVE TO MIDDLE BAY SHARES
7.1 SECURITIES LAWS COMPLIANCE BY MIDDLE BAY.
(a) 1934 Act Registration and Reports; Access to
Information. On the date of this Agreement and at Closing, all of
Middle Bay's common stock, including the Middle Bay Common Stock
issuable hereunder, shall be registered pursuant to Section 12(g) of
the 1934 Act, and Middle Bay shall have timely filed all reports with
the SEC required of Middle Bay under the 1934 Act, and Middle Bay
shall have given Bison and Lett full access to all such reports and
other information reasonably requested by Bison or Lett regarding
Middle Bay to enable Lett to make an informed decision regarding the
value of the Middle Bay Common Stock.
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(b) Securities Laws Compliance. Middle Bay and Lett shall
use their reasonable efforts to assure that the issuance of the Middle
Bay Common Stock hereunder qualifies as exempt from the registration
requirements of the Securities Act of 1993, as well as securities laws
of such states as would apply to the issuance and delivery of the
Middle Bay Common Stock as contemplated hereunder.
7.2 TRANSFER RESTRICTIONS. Bison agrees that transfer of the
Middle Bay Common Stock issuable to Bison and distributed to Lett at Closing
shall be restricted for a period of 24 months from the Closing Date (the
"Restriction Period"). None of those shares may be distributed, sold or
transferred to any person during the Restriction Period. The Middle Bay shares
shall not be publicly reoffered or sold thereafter by Bison except in
compliance with Rule 144 under the 1933 Act or in transactions otherwise exempt
from registration under the 1933 Act and applicable state securities laws. Each
certificate representing such shares issued and delivered at or after Closing
shall bear an appropriate legend regarding such transfer restrictions, and such
restrictions shall be appropriately noted on the stock transfer records of
Middle Bay.
7.3 REGISTRATION RIGHTS. Lett (and/or his successors in interest,
if any) shall have the following rights with respect to registration of the
Middle Bay Common Stock acquired hereby.
(a) Piggyback Registration. If Middle Bay shall at any
time or times determine to register under the 1933 Act any shares of
its Common Stock (other than registration of common stock under stock
option plans, stock ownership plans, or other employee benefit plans
of Middle Bay or its subsidiaries) pursuant to an offering whereby
Middle Bay will receive cash for the sale of such common stock, it
will notify each former Bison shareholder in each case of such
determination at least thirty (30) days prior to filing the
registration statement and, upon the receipt of written request by
such shareholders representing at least a majority of the Middle Bay
Common Stock issued pursuant to the Merger given within fifteen (15)
days after receipt of such notification, Middle Bay will use its best
efforts to cause any of the Middle Bay Common Stock, as specified in
such request to be registered under the 1933 Act pursuant to such
registration statement, to the extent and under the condition that
such registration is permissible under the 1933 Act and the rules and
regulations thereunder; provided, however, that if the managing
underwriter selected by Middle Bay advises Middle Bay in writing that,
in its opinion, the inclusion of Middle Bay Common Stock requested to
be included in such registration would materially adversely affect the
distribution of all such common stock, then the former Bison
shareholders shall not be permitted to register their Middle Bay
Common Stock as specified in such request, but if such advice is not
given at any time thereafter, both Middle Bay and the former Bison
shareholders may sell Middle Bay Common Stock in the proposed
distribution, with each party being entitled to sell a proportion of
the number of shares to be sold by the former Bison shareholders and
Middle Bay in its proposed distribution corresponding to the ratio
that the number of shares proposed to be sold by such party bears to
the aggregate number of shares proposed to be sold by former Bison
shareholders and Middle Bay.
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(b) Demand Registration. If Middle Bay shall at any time
or times determine to register under the 1933 Act any shares of its
common stock in connection with the acquisition of another company or
an acquisition of assets, or if the number of Middle Bay Common Stock
owned by Lett shall become less than ten percent (10%) of the issued
and outstanding shares of Middle Bay Common Stock (other than as a
consequence of the sale of Middle Bay Common Stock by Lett), it will
notify Lett in each case of such determination at least thirty (30)
days prior to filing the registration statement and, upon the receipt
of Lett's written request given within fifteen (15) days after Lett's
receipt of such notification, Middle Bay will use its best efforts to
cause any of the Middle Bay Common Stock, as specified in such request
to be registered under the 1933 Act pursuant to a separate
registration statement for the purpose of permitting the sale of
Lett's Middle Bay Common Stock in a secondary distribution, to the
extent and under the condition that such registration is permissible
under the 1933 Act and the rules and regulations thereunder, and to
further use its best efforts to maintain the effectiveness of such
registration statement (including but not limited to the filing of
such post-effective amendments, prospectus supplements, etc.) until
such time as Lett will be eligible to sell the Middle Bay Common Stock
pursuant to the terms of Rule 144(k) as promulgated under the 1933
Act. Lett's rights under this Section 7.3(b) are limited to one
effective registration of Lett's Middle Bay Common Stock.
(c) Expenses. Middle Bay shall pay all expenses incurred
in connection with any registration pursuant to this Section 7.3,
except that Lett and/or the other former Bison shareholders, as the
case may be, shall pay for (i) any broker or underwriting commissions
or discounts relating to Middle Bay Common Stock sold by such
shareholders, and (ii) fees of counsel to such shareholders engaged
separately from counsel to Middle Bay in connection with such
registration.
7.4 RESTRICTIONS ON VOTING RIGHTS. Bison and Lett agree that for a
period of 12 months following the Closing Date, voting rights with respect to
the shares of Middle Bay Common Stock issuable to Bison's shareholders
hereunder (or otherwise acquired by Lett) shall be limited as follows:
(a) In connection with any vote taken or consent, wavier
or ratification given in connection with the election or removal of
directors of Middle Bay, Lett shall vote only that number of shares of
Middle Bay Common Stock, regardless of any greater number of such
shares owned by Lett or any entity controlled by Lett, in the
aggregate, as shall represent 20% or less of the total number of
shares of Middle Bay Common Stock issued and outstanding and eligible
to vote at the time of any such vote, consent, waiver or ratification.
(b) Each certificate representing the shares of Middle
Bay Common Stock issuable to the Bison shareholders hereunder and
delivered at Closing shall bear an appropriate legend regarding such
voting restrictions, and such restrictions shall be appropriately
noted on the stock transfer records of Middle Bay.
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(c) For purposes of this Section 7.4, the number of
shares of Middle Bay Common Stock owned by the former Bison
shareholders shall include any shares of Middle Bay Common Stock
presently owned by Bison or hereafter issued or distributed to any
present shareholder of Bison.
(d) In the event all or a portion of the Kaiser-Francis
Preferred Shares or any preferred shares issued by Middle Bay to any
other person are converted into Middle Bay Common Stock prior to 12
months from the Closing Date specified herein, the voting restrictions
provided in this Section 7.4 shall be removed share-for-share with
the conversion of the Kaiser-Francis Preferred Shares or other
preferred shares (e.g., if Kaiser-Francis converts a portion of its
Preferred Shares into 100,000 shares of common stock, the number of
aggregate shares of Middle Bay Common Stock which may be voted by Lett
hereunder shall be increased by 100,000 shares).
(e) If Middle Bay issues additional shares of common
stock as part of another merger or asset acquisition transaction
following the Closing Date and any such merger or acquisition involves
the issuance of Middle Bay Common Stock representing, after issuance,
more than 20% of the then outstanding shares of Middle Bay Common
Stock, if such shares are not made subject to voting restrictions
substantially identical to those imposed by this Section 7.4, this
Section 7.4 shall thereafter no longer apply.
ARTICLE VIII
MIDDLE BAY'S REPRESENTATIONS AND WARRANTIES
Middle Bay represents and warrants to Bison and Lett that:
8.1 DUE ORGANIZATION; GOOD STANDING; POWER. Middle Bay is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Alabama. Middle Bay has all requisite corporate power to
enter into this Agreement and to perform its obligations hereunder.
8.2 AUTHORIZATION AND VALIDITY OF DOCUMENTS. The execution,
delivery and performance of this Agreement by Middle Bay, and the consummation
by Middle Bay of the transactions contemplated hereby, have been duly and
validly authorized by Middle Bay. This Agreement has been duly executed and
delivered by Middle Bay and is a legal, valid and binding obligation of Middle
Bay, enforceable against Middle Bay in accordance with its terms, except as
such enforceability may be limited by general principles of equity, bankruptcy,
insolvency, moratorium and similar laws relating to creditors' rights
generally.
8.3 INCOME TAX CONSEQUENCES. Any contrary provision contained in
this Agreement (or any other agreement or communication) notwithstanding,
Middle Bay is not relying upon any statement made or advice provided by Bison
or Lett regarding the income tax consequences of the Merger or other
transactions contemplated by this Agreement, as to Middle Bay or Bison, Middle
Bay shall rely solely upon its tax advisors
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with respect to such tax consequences. Middle Bay will be responsible for all
income taxes of Middle Bay and Bison resulting from the Merger and any income
tax elections made by Middle Bay.
8.4 STATUS OF THE MIDDLE BAY COMMON STOCK. The Middle Bay Common
Stock to be delivered to Bison and distributed to Bison's shareholders pursuant
to this Agreement will be, when delivered, (i) duly authorized, validly issued,
fully paid and nonassessable, (ii) duly registered under the 1934 Act, and
(iii) listed for trading on the NASDAQ Small Cap Stock Market.
8.5 INFORMATION RELATING TO MIDDLE BAY. Middle Bay has previously
provided to Bison and Lett information in the form of Middle Bay's 1934 Act
Annual Report on Form 10K-SB dated December 31, 1995 and its Quarterly Report
on Form 10Q-SB for the period ended September 30, 1996. Middle Bay will also
provide to Bison a copy of any filing made with the SEC from the date hereof to
the Closing Date. The information concerning Middle Bay contained in such
reports is complete and accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make statements contained therein, in light of the
circumstances in which statements were made, not misleading. Middle Bay has
also advised Bison and Lett of Middle Bay's intention to seek shareholder
approval to increase its authorized capital stock and take other action at the
Annual Meeting of Shareholders scheduled for May 30, 1997. From the date hereof
through the Closing Date, Middle Bay shall provide to Bison and Lett the
opportunity to ask questions and receive answers concerning the matters
contemplated hereby and to obtain any additional information which Middle Bay
possesses or can acquire without unreasonable effort that is necessary to
verify the accuracy of the information furnished under this Section 8.5.
8.6 OPERATIONAL MATTERS. Middle Bay is accepting all past
operations of the oil and gas properties of Bison on an "AS IS" basis. Middle
Bay acknowledges that certain of the properties are under contract for the sale
of natural gas and condensate to the Spivey, Kansas, Natural Gas Plant (the
"Spivey Plant") currently being operated by Trident NGL, Inc. Middle Bay is
relying solely on its own review and understanding of the Agreement for the
Construction and Operation of the Spivey Gasoline Plant dated October 1, 1955
(the "Spivey Contract") and applicable Kansas state law and the requirements
and rules of the Kansas Corporation Commission, including, without limitation,
the Kansas Corporation Commission Field Rules.
ARTICLE IX
BISON'S AND LETT'S REPRESENTATIONS AND WARRANTIES
Bison and Lett represent and warrant to Middle Bay that, to the best
of their knowledge, except as disclosed in Schedule 9.8, 9.9 or 9.10.
9.1 DUE ORGANIZATION; GOOD STANDING; POWER. Bison and each of its
subsidiaries are corporations duly organized, validly existing and in good
standing under the laws of their respective states of incorporation.
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9.2 AUTHORIZATION AND VALIDITY OF DOCUMENTS. The execution,
delivery and performance of this Agreement by Bison, and the consummation by
Bison of the Merger and other transactions contemplated hereby, have been duly
and validly authorized by the Board of Directors of Bison. This Agreement has
been duly executed and delivered by Bison and is a legal, valid and binding
obligation of Bison and Lett, respectively, enforceable against Bison and Lett
in accordance with its terms, except as such enforceability may be limited by
general principles of equity, bankruptcy, insolvency, moratorium and similar
laws relating to creditors' rights generally. This Agreement has been, and the
other agreements, documents and instruments required to be delivered by Bison
in accordance with the provisions hereof will be, duly executed and delivered
on behalf of Bison by its duly authorized.
9.3 VALIDITY OF CONTEMPLATED TRANSACTIONS, ETC. The execution,
delivery and performance of this Agreement by Bison and Lett does not and will
not violate, conflict with or result in the breach of any term, condition or
provision of, or require the consent of any other person under, (a) any
existing law, ordinance or governmental rule or regulation of the State of
Kansas or any laws to which the properties or business of Bison or its
Subsidiary is subject, (b) any judgment, order, writ, injunction, decree or
award of any court, arbitrator or governmental or regulatory official, body or
authority which is applicable to Bison, any Subsidiary or any shareholder of
Bison, (c) the articles of incorporation, bylaws, limited partnership
agreements or other charter documents of, respectively, Bison or its
Subsidiary, or (d) any mortgage, indenture, agreement, contract, commitment,
lease, plan, or other instrument, document or understanding, oral or written,
to which Bison or its Subsidiary is a party, by which Bison may have rights or
by which any of the properties of Bison or its Subsidiary may be bound or
affected, or give any party with rights thereunder the right to terminate,
modify, accelerate or otherwise change the existing rights or obligations of
Bison or its Subsidiary thereunder. No authorization, approval or consent of
and no registration or filing with any governmental or regulatory official,
body or authority is required in connection with the execution, delivery or
performance of this Agreement by Bison or Lett.
9.4 NO THIRD-PARTY OPTIONS. There are no existing agreements,
options, commitments or rights with, of or to any person to acquire any of the
capital stock of Bison or any of its properties or any right or interest
therein.
9.5 TITLE TO PROPERTIES. To the best of Bison's and Lett's
knowledge, the oil and gas properties and other assets of Bison are free and
clear of all mortgages, liens, pledges, security interests, charges, claims,
restrictions and other encumbrances, except for liens securing a presently
unused line of credit with the Bank of Oklahoma, liens for current real or
personal property taxes not yet due and payable and mechanics and materialmen
liens arising in the ordinary course of Bison's business for sums not yet due
and owing or being contested in good faith by appropriate proceedings. With the
exception of the foregoing representations and warranties as to "knowledge,"
neither Bison nor Lett makes any representation or warranty concerning title to
the properties, and Middle Bay is taking the properties "AS IS" with all title
defects, if any.
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9.6 CONDITION OF TANGIBLE ASSETS. All buildings, structures,
facilities, equipment and other material items of tangible property and assets
constituting the properties of Bison are in good operating condition and
repair, subject to normal wear and maintenance, are usable in the regular and
ordinary course of business and, to Lett's and Bison's knowledge, conform to
all applicable laws, ordinances, codes, rules and regulations relating to their
construction, use and operation. No person other than Bison owns any equipment
or other tangible assets or properties situated on Bison's properties or
necessary to the operation of the business of Bison, except for leased items
disclosed in Exhibit "A" and for items of immaterial value.
9.7 FINANCIAL STATEMENTS. Attached hereto as Exhibit "D" are
Bison's consolidated balance sheet and profit and loss statement as of the
close of business on December 31, 1996 (the "Financial Statements"). Lett and
Bison represent that the Financial Statements are complete, are in accordance
with the books and records of Bison and fairly present, in all material
respects, the assets, liabilities, financial condition and results of the
consolidated operations of Bison and its Subsidiaries indicated thereby in
accordance with tax basis accounting principles consistently applied, and there
have not been any material adverse changes in such financial condition as of
the date of this Agreement. Although the Financial Statements have not been
maintained and presented in accordance with generally accepted accounting
principles, the Financial Statements, when restated to comply with generally
accepted accounting principles, will not reflect material adverse changes in
assets, liabilities or results of operations. At December 31, 1996, Bison had
no material liabilities of any nature, direct or indirect, fixed or contingent,
which were not reflected on the Financial Statements, including, without
limitation, a $40,000 accrual for potential income tax liability arising out of
an audit by the Internal Revenue Service of Bison's tax return for the year
ended March 31, 1993.
9.8 LITIGATION. Except as disclosed in Schedule "9.8" attached
hereto, there are no claims, causes of action, third-party claims, actions,
proceedings, investigations or orders, judgments or decrees, including
administrative proceedings (matured, unmatured, asserted or unasserted),
against or involving Bison or Lett pending or, to the best of Bison's and
Lett's knowledge, threatened before any court or governmental agency that
question the validity of this Agreement or the transactions contemplated by
this Agreement or any action taken or to be taken in connection therewith or
herewith. Except as set forth on Schedule "9.8" in respect to Bison or Lett,
there are no actions, proceedings or investigations pending (or, to Bison's or
Lett's knowledge, any basis therefor or threat thereof) which, either in any
case or in the aggregate, would, if adversely determined, result in any adverse
effect on the business, prospects, conditions, affairs or operations of Bison
of its properties.
9.9 EMPLOYEES. Bison has no employment contracts, collective
bargaining agreements or any labor trouble, EEOC claims, OSHA citations or any
workers' compensation claims, controversies or other claims on unsettled
grievances pending or, to the knowledge of Bison, threatened by any of its
officers, agents, employees or any other third party involved in the operations
of Bison, or collective bargaining organizations or pension, 401(k), stock
bonus, profit sharing, stock option or other agreements providing for
remuneration or benefits to its officers, directors or employees, except as set
forth on Schedule "9.9" attached hereto. Bison
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is, to its knowledge, in compliance in all material respects with the
requirements of the Employee Retirement Income Security Act of 1974, as
amended.
9.10 ENVIRONMENTAL MATTERS. To the best of its and Lett's
knowledge, Bison is not aware of, nor has Bison received notice of, any past,
present or future events, conditions, circumstances, activities, practices,
instances, actions or plans which may interfere with or prevent compliance or
continue compliance with those laws or any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder or which may give rise to any common law or
legal liability or otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing, study or investigation based on or related to the
violation by Bison of applicable Environmental Laws. With the exception of the
foregoing representations and warranties as to "knowledge," neither Bison nor
Lett makes any representations or warranties, either express or implied, or
otherwise, on any environmental matters, including without limitation, the
violation of any federal, state, local, municipal law, rule or regulation
relating to the environment or natural resource (collectively, "Environmental
Laws") by Bison and makes no warranty or representation, express or implied or
otherwise, with respect to the accuracy or completeness of any information,
records or data made available to Middle Bay in connection with this Agreement.
Except for a breach of the foregoing representations and warranties as to
"knowledge," Middle Bay is acquiring, pursuant to the Merger, the properties
"AS IS" with all environmental defects, if any, including those matters
described in Schedule "9.10", and has relied upon Middle Bay's own
investigation and analysis to enter into this Agreement and consummate the
transactions set forth herein. Middle Bay agrees that Bison and its current, as
of the Merger Date, employees, officers, directors, shareholders,
representatives and agents, except for breach of any representation and
warranty herein, are hereby released and held harmless by Middle Bay and shall
not be responsible or liable to Middle Bay for any claims, costs, losses,
liabilities, judgments, demands, tort claims, damages, expenses, demands,
actions or causes of action arising from environmental matters or violations of
Environmental Laws arising from or relating to any of Bison's properties.
9.11 COMPLETENESS OF DISCLOSURE. No representation or warranty by
Bison or Lett in this Agreement nor any certificate, statement, document or
instrument furnished or to be furnished to Middle Bay pursuant hereto, or in
connection with the negotiation, execution, performance of or the obtaining of
consents of shareholders of Bison to this Agreement, contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact required to be stated herein or therein or necessary to make any
statement herein or therein not misleading.
9.12 GAS IMBALANCES. Bison has received no deficiency payments
under any gas contracts for which any party has a right to take deficiency gas,
nor has Bison received any payments for production which are subject to refund
or recoupment out of future production.
9.13 WELL STATUS. Bison has no outstanding accounts payable arising
out of an authority for expenditure or other similar invoice to plug and
abandon any well or wells because the well or wells are not
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capable of producing in commercial quantities. All wells drilled, completed,
operated, plugged or abandoned by Bison on or related to its properties have
been drilled, completed, operated, plugged or abandoned in accordance and
compliance with all operating agreements, other contracts or agreements, laws,
rules, regulations, permits, orders, judgments and decrees of any court or
governmental body or agency relating thereto and within the boundaries
specified therein or otherwise permitted by law; and Bison has not received any
notice or other indication to the contrary.
9.14 INCOME TAX CONSEQUENCES. Any contrary provision contained in
this Agreement (or any other agreement or communication) notwithstanding,
neither Bison nor Lett is relying upon any statement made by or advice provided
by Middle Bay regarding the income tax consequences of the Merger or other
transactions contemplated by this Agreement, as to Bison or as to any of the
Bison shareholders. The parties understand that such transaction will result in
recognition of gain or loss for federal income tax purposes by the Bison
shareholders relative to their allocated portions of the cash price. Bison and
Lett shall rely solely upon their tax advisors with respect to such tax
consequences and the tax consequences to the other Bison shareholders.
9.15 RESERVE REPORT. The engineering report set forth in Exhibit
"B" was prepared by Middle Bay's professional staff. Bison provided information
to Middle Bay which Bison believes to be true and correct and upon which Middle
Bay has relied in the preparation of the report. The reserves included in the
report are estimates only and should not be construed as being exact
quantities. They may or may not be actually recovered, and, if recovered, the
revenues therefrom and the actual costs related thereto could be more or less
than the estimated amounts. Moreover, estimates of the reserves may increase or
decrease as a result of future operations.
ARTICLE X
MIDDLE BAY'S COVENANTS
Middle Bay covenants and agrees that, pending the Closing and as the
context requires, following Closing, except as otherwise agreed to in writing
by Bison:
10.1 BUSINESS IN THE ORDINARY COURSE. Middle Bay's business shall
be conducted solely in the ordinary course consistent with past practice, and
except for actions necessary for its due organization, Bison/Alabama shall
engage in no business pending Closing.
10.2 CONDUCT OF BUSINESS. Middle Bay shall use its best efforts to
conduct its business in such a manner that, on the Closing Date, the
representations and warranties of Middle Bay contained in this Agreement shall
be true, except as specifically contemplated by this Article X as though such
representations and warranties were made on and as of such date. Furthermore,
Middle Bay shall cooperate with Bison and
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use its best efforts to cause all of the conditions to the obligations of
Middle Bay under this Agreement to be satisfied on or prior to the Closing
Date.
10.3 UPDATE DISCLOSURES. Middle Bay shall promptly disclose to
Bison and Lett any material changes in its reserves or business prior to the
Closing Date, as well as any information contained in its representations and
warranties which, because of an event occurring after the date hereof, or the
discovery of an event occurring or having occurred at any time, is incomplete
or is no longer correct as of all times after the date hereof until the Closing
Date; provided, however, that none of such disclosures shall be deemed to
modify, amend or supplement the representations and warranties of Middle Bay
for the purposes of this Agreement, unless Bison shall have consented thereto
(by Notice).
10.4 COMPLIANCE WITH LAWS. Middle Bay shall comply with all laws,
ordinances, rules, regulations and orders applicable to its business or
operations, assets or properties in respect thereof, the noncompliance with
which might materially affect its business.
10.5 INCOME TAX. Middle Bay agrees to be responsible for and pay
all income taxes of Bison and Middle Bay arising from the Merger as a result of
any income tax elections made by Middle Bay, including any liabilities or
obligations accruing to Lett as a result of any such election if such election
was out of the ordinary.
10.6 BISON OFFICE. After the Merger Date, Middle Bay shall maintain
Bison's headquarters office at 9320 East Central Avenue, Wichita, Kansas (the
"Headquarters Office"). Middle Bay shall also maintain Bison's field offices
located in Cushing, Oklahoma and Attica, Kansas. The office space for the
Head-quarters Office will be leased from Lett for one year and renewed on an
annual basis. The amount of square footage leased will be determined by Middle
Bay at a cost equal to the average rental rates for the area.
10.7 TRANSITION PERIOD. Middle Bay will maintain Bison's current
operations in the Headquarter's Office for a period of six months following the
Merger Date. After this transition period, Bison's accounting functions will be
transferred to Middle Bay's then principal offices, and only the employees
described in Section 10.8 will be kept at the Headquarters Office.
10.8 BISON EMPLOYEES. Subsequent to the transition period referred
to in Section 10.7, the following people would become Middle Bay employees
(subject to their consents). The executive and professional staff will include
C. J. Lett, III, President; Steve Anderson, engineering; Dean Pattisson,
geology; and one clerical person. The field staff will include Steve Wilson,
Russell Meyers, Frank Miller and Roger Hageman.
10.9 DRILLING ACTIVITIES. Middle Bay and Bison shall use their best
efforts during the 36 months following the Closing Date (the "Development
Period") to drill at least 24 prospects (collectively, the
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"Prospects") developed by Bison, Dean Pattisson or Whitsunday Enterprises, LLC
("Whitsunday"). In connection with the Prospects, Middle Bay and Bison
acknowledge and agree that Whitsunday will receive a ten percent (10%) carried
working interest (at no cost to Whitsunday) in each of the Prospects. Middle
Bay and Bison further acknowledge and agree that Clinton Enterprises, L.L.C.
will receive an overriding royalty interest in each of the Prospects not to
exceed a percentage that delivers an eighty percent (80%) net revenue interest
on each of the Prospects to either Middle Bay or Bison.. If at least 24 of the
Prospects are not drilled by Middle Bay or Bison during the Development Period,
any undeveloped oil and gas leases owned by Bison at the Closing Date or
acquired within 12 months following the Closing Date, which are not otherwise
held by production and not previously drilled by Middle Bay or Bison, shall be
transferred to Whitsunday within thirty (30) days of the expiration of the
Development Period.
ARTICLE XI
BISON'S AND LETT'S COVENANTS
Bison and Lett each respectively covenants and agrees that, pending
the Closing and, as the context requires, following Closing, except as
otherwise agreed to in writing by Middle Bay:
11.1 BUSINESS IN THE ORDINARY COURSE. Bison's business shall be
conducted solely in the ordinary course consistent with past practice.
11.2 MAINTENANCE OF ASSETS. Bison shall continue to maintain and
service the assets constituting its properties in good operating condition and
repair, subject to normal wear and maintenance, and in the same manner as has
been its consistent past practice.
11.3 MAINTENANCE OF INSURANCE. Bison shall maintain insurance
coverage of its insurable interests with respect to its properties at levels
currently maintained.
11.4 COMPLIANCE WITH LAWS, ETC. Bison shall comply with all laws,
ordinances, rules, regulations and orders applicable to its business or Bison's
operations, assets or properties in respect thereof, the noncompliance with
which might materially affect its business or its properties.
11.5 UPDATE DISCLOSURES. Bison and Lett, respectively, shall
promptly disclose to Middle Bay any information contained in its
representations and warranties which, because of an event occurring after the
date hereof, or the discovery of an event occurring or having occurred at any
time, is incomplete or is no longer correct as of all times after the date
hereof until the Closing Date; provided, however, that none of such disclosures
shall be deemed to modify, amend or supplement the representations and
warranties of Bison or Lett for the purposes of this Agreement, unless Middle
Bay shall have consented thereto.
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11.6 CONDUCT OF BUSINESS. Bison shall use its best efforts to
conduct its business in such a manner that, on the Closing Date, the
representations and warranties of Bison contained in this Agreement shall be
true, except as specifically contemplated by this Article XI, as though such
representations and warranties were made on and as of such date. Furthermore,
Bison and Lett shall cooperate with Middle Bay and use their best efforts to
cause all of the conditions to the obligations Bison and Lett under this
Agreement to be satisfied on or prior to the Closing Date.
11.7 SALE OF ASSETS; NEGOTIATIONS. Bison shall not, directly or
indirectly, sell or encumber all or any part of its properties or any other
material asset (including, without limitation, the 562,000 shares of Middle Bay
common stock owned by Bison, other than in the normal course of business
consistent with past practice, or initiate or participate in any discussions or
negotiations or enter into any agreement to do any of the foregoing.
11.8 ACCESS. Bison shall give to Middle Bay's officers, employees,
counsel, accountants, engineers and other representatives free and full access
to and the right to inspect, during normal business hours, all of the premises,
properties, assets, records, contracts and other documents relating to Bison's
properties and the business conducted by Bison and shall permit them to consult
with the officers, employees, accountants, counsel and agents of Bison for the
purpose of making such investigation of its properties and business, as Middle
Bay shall desire to make, provided that such investigation shall not
unreasonably interfere with Bison's business operations. Furthermore, Bison
shall furnish to Middle Bay all such documents and copies of documents and
records and information with respect to the affairs of Bison and its business
and copies of any working papers relating thereto as Middle Bay shall from time
to time reasonably request and shall permit Middle Bay and its agents to make
such physical inventories and inspections of the properties as Middle Bay may
request from time to time.
11.9 PRESS RELEASES. Neither Bison nor Lett shall communicate to
third parties or otherwise make any public statement or release concerning this
Agreement or the transactions contemplated hereby, except for such written
information as shall have been approved in writing as to form and content by
Middle Bay, which approval shall not be unreasonably withheld.
11.10 DISCLOSURE OF COMPETING BUSINESS INTERESTS BY LETT. In
addition to the disclosure set forth in Schedule 11.10, if requested by Middle
Bay, Lett undertakes and agrees that he will, prior to Closing, disclose to
Middle Bay any business relationship (including, without limitation, as
employee, independent contractor, shareholder, director, investor or consultant
but excluding passive investments not in excess of two percent (2%) of the
equity of any corporation, partnership or entity) with any individual,
partnership, corporation, association or other person, the business of which is
competitive with (or otherwise engaged in competition with) the current
business of Bison or the business of Middle Bay, as described in Paragraph A
hereof under "Background and Purpose," derived or contemplated at the Closing,
all of the foregoing within the United States.
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11.11 MIDDLE BAY'S OFFICES. Lett acknowledges and agrees that Middle
Bay's principal offices, although presently located at 115 South Dearborn
Street, Mobile, Alabama 36602, may be moved to Houston, Texas or such other
location and at such time as may be determined by the Board of Directors of
Middle Bay.
11.12 INCOME TAXES. Except as provided in Section 10.5 hereof, Lett
acknowledges and agrees that Middle Bay has no responsibility for any income
tax liability of Lett resulting from the Merger.
ARTICLE XII
CONDITIONS PRECEDENT
12.1 CONDITIONS PRECEDENT TO MIDDLE BAY'S OBLIGATIONS. All
obligations of Middle Bay under this Agreement are subject to the fulfillment
or satisfaction, prior to or at the Closing, of each of the following
conditions precedent:
(a) Representations and Warranties True as of the Closing
Date. The representations and warranties of Bison and Lett contained
in this Agreement or in any schedule, certificate or document
delivered by Bison or Lett to Middle Bay pursuant to the provisions
hereof shall have been true on the date hereof and shall be true on
the Closing Date with the same effect as though such representations
and warranties were made as of such date.
(b) Compliance With this Agreement. Bison and Lett shall
have performed and complied with all agreements and conditions
required by this Agreement to be performed or complied with by them
prior to or at the Closing.
(c) Closing Certificate. Middle Bay shall have received
certificates from Bison and Lett dated the Closing Date, certifying in
such detail as Middle Bay may reasonably request that the conditions
specified in subsections (a) and (b) hereof have been fulfilled and
certifying that Bison has obtained all consents and approvals required
to consummate the transactions contemplated by this Agreement.
(d) Opinions of Counsel for Bison. Phillips McFall
McCaffrey McVay & Murrah, P.C., counsel for Bison and Lett, shall have
delivered to Middle Bay their written opinions, dated the Closing
Date, reasonably satisfactory in form and substance to Middle Bay and
its counsel.
(e) No Threatened or Pending Litigation. On the Closing
Date, no suit, action or other proceeding or injunction or final
judgment relating thereto shall be threatened or be pending before any
court or governmental or regulatory official, body or authority in
which it is sought to restrain or prohibit or to obtain damages or
other relief in connection with this Agreement or the consummation of
the transactions contemplated hereby, and no investigation that might
result in any such suit, action or proceeding shall be pending or
threatened.
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(f) Material Adverse Changes. The properties and
operations of Bison shall have the values set forth in Exhibit "B"
hereto and shall not have been and shall not be threatened to be
materially adversely affected in any way as a result of any event or
occurrence.
(g) Approval of Counsel; Corporate Matters. All actions,
proceedings, resolutions, instruments and documents required to carry
out this Agreement or incidental hereto and all other related legal
matters shall have been approved on the Closing Date by Thrasher,
Whitley, Hampton & Morgan, counsel for Middle Bay, in the exercise of
their reasonable judgment. Bison shall also have delivered to Middle
Bay such other documents, instruments, certifications and further
assurances as such counsel may reasonably require.
12.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BISON. All
obligations of Bison under this Agreement are subject to the fulfillment or
satisfaction, prior to or at the Closing, of each of the following conditions
precedent:
(a) Representations and Warranties True as of the Closing
Date. The representations and warranties of Middle Bay contained in
this Agreement or in any list, certificate or document delivered by
Middle Bay to Bison or Lett pursuant to the provisions hereof shall be
true on the Closing Date with the same effect as though such
representations and warranties were made as of such date.
(b) Compliance With this Agreement. Middle Bay shall have
performed and complied with all agreements and conditions required by
this Agreement to be performed or complied with by it prior to or at
the Closing.
(c) Closing Certificates. Bison shall have received a
certificate from Middle Bay dated the Closing Date, certifying in such
detail as Bison may reasonably request that the conditions specified
in subsections (a) and (b) hereof have been fulfilled.
(d) Opinion of Counsel for Middle Bay. Thrasher, Whitley,
Hampton & Morgan, counsel to Middle Bay, shall have delivered to Bison
a written opinion, dated the Closing Date, reasonably satisfactory in
form and substance to Bison and its counsel.
(e) No Threatened or Pending Litigation. On the Closing
Date, no suit, action or other proceeding or injunction or final
judgment relating thereto shall be threatened or be pending before any
court or governmental or regulatory official, body or authority in
which it is sought to restrain or prohibit or to obtain damages or
other relief in connection with this Agreement or the consummation of
the transactions contemplated hereby, and no investigation that might
result in any such suit, action or proceeding shall be pending or
threatened.
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(f) Approval of Counsel; Corporate Matters. All actions,
proceedings, resolutions, instruments and documents required to carry
out this Agreement or incidental hereto and all other related legal
matters shall have been approved on the Closing Date by counsel for
Bison and Lett in the exercise of their reasonable judgment. Middle
Bay shall also have delivered to Bison and Lett such other documents,
instruments, certifications and further assurances as such counsel may
reasonably require.
ARTICLE XIII
INDEMNIFICATION
13.1 GENERAL INDEMNIFICATION OBLIGATION OF LETT. From and after the
Closing, Lett shall reimburse, indemnify and hold Middle Bay harmless against
and in respect of:
(a) any and all damages, losses, deficiencies,
liabilities, costs and expenses incurred or suffered by Middle Bay
that result from, relate to or arise out of any material
misrepresentation, material breach of warranty or material
nonfulfillment of any material agreement or covenant on the part of
Bison or Lett under this Agreement, or any material misrepresentation
in or material omission from any certificate, statement, document or
instrument furnished to Middle Bay pursuant to or in connection with
negotiation, execution or performance of this Agreement; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs
and other expenses (including, without limitation, reasonable legal
fees and expenses) incident to any of the foregoing or to the
enforcement of this Section 13.1.
13.2 GENERAL INDEMNIFICATION OBLIGATION OF MIDDLE BAY. From and
after the Closing, Middle Bay will reimburse, indemnify and hold Lett harmless
against and in respect of:
(a) any and all damages, losses, deficiencies,
liabilities, costs and expenses incurred or suffered by Lett that
result from, relate to or arise out of any material misrepresentation,
material breach of warranty or material nonfulfillment of any material
agreement or covenant on the part of Middle Bay under this Agreement,
or any material misrepresentation in or material omission from any
certificate, statement, document or instrument furnished to Bison or
Lett pursuant hereto or in connection with the negotiation, execution
or performance of this Agreement; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs
and other expenses (including, without limitation, reasonable legal
fees and expenses) incident to any of the foregoing or to the
enforcement of this Section 13.2.
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13.3 METHOD OF ASSERTING CLAIMS, ETC. In the event that any claim
or demand for which Lett would be liable to Middle Bay hereunder is asserted
against or sought to be collected from Middle Bay by a third party, Middle Bay
shall promptly notify Lett of such claim or demand, specifying the nature of
such claim or demand and the amount or the estimated amount thereof to the
extent then feasible (which estimate shall not be conclusive of the final
amount of such claim and demand) (the "Claim Notice"). Lett shall then have
fifteen (15) days from the date of receipt by Lett of the Claim Notice (the
"Notice Period") to notify Middle Bay (i) whether or not he disputes his
liability to Middle Bay hereunder with respect to such claim or demand and (ii)
notwithstanding any such dispute, whether or not he desires, at Lett's sole
cost and expense, to defend Middle Bay against such claim or demand.
(a) If Lett disputes his liability with respect to such
claim or demand or the amount thereof (whether or not Lett desires to
defend Middle Bay against such claim or demand as provided in
subsections 13.3(b) and 13.3(c) below), such dispute shall be resolved
in accordance with Section 13.5. Pending the resolution of any dispute
by Lett of his liability with respect to any claim or demand, such
claim or demand shall not be settled without the prior written consent
of Middle Bay (given by Notice).
(b) In the event that Lett notifies Middle Bay within the
Notice Period that he desires to defend Middle Bay against such claim
or demand, then, except as hereinafter provided, Lett shall have the
right to defend Middle Bay by appropriate proceedings, which
proceedings shall be promptly settled or prosecuted by Lett to a final
conclusion in such manner as to avoid any risk of Middle Bay's
becoming subject to liability for any other matter; provided, however,
Lett shall not, without the prior written consent of Middle Bay (given
by Notice), consent to the entry of any judgment against Middle Bay or
enter into any settlement or compromise which does not include, as an
unconditional term thereof, the giving by the claimant or plaintiff to
Middle Bay of a release, in form and substance satisfactory to Middle
Bay's counsel, from all liability in respect of such claim or
litigation. If Middle Bay desires to participate in, but not control,
any such defense or settlement, it may do so at its sole cost and
expense. If, in the reasonable opinion of Middle Bay, any such claim
or demand or the litigation or resolution of any such claim or demand
involves an issue or matter which could have a materially adverse
affect on the business, operations, assets, properties or prospects of
Middle Bay, including, without limitation, the administration of the
tax returns and responsibilities under the tax laws of Middle Bay,
then Middle Bay shall have the right to control the defense or
settlement of any such claim or demand, and its reasonable costs and
expenses shall be included as part of the indemnification obligation
of Lett hereunder; provided, however, that Middle Bay shall not settle
any such claim or demand without the prior written consent (given by
Notice) of Lett, which consent shall not be unreasonably withheld. If
Middle Bay should elect to exercise such right, Lett shall have the
right to participate in, but not control, the defense or settlement of
such claim or demand, at his sole cost and expense.
- 22 -
<PAGE>
(c) If Lett elects not to defend Middle Bay against such
claim or demand, whether by not giving Middle Bay timely Notice as
provided above or otherwise, then the amount of any such claim or
demand, or if the same be defended by Lett or by Middle Bay (but
Middle Bay shall have no obligation to defend any such claim or
demand) then that portion thereof as to which such defense is
unsuccessful, in each case shall be conclusively deemed to be the
liability of Lett hereunder, unless Lett shall have disputed his
liability to Middle Bay hereunder, as provided in Section 13.5 hereof.
(d) If Middle Bay should have a claim against Lett
hereunder that does not involve a claim or demand being asserted
against or sought to be collected from it by a third party, Middle Bay
shall, within a reasonable time after discovery of such claim, send a
Claim Notice with respect to such claim to Lett. If Lett disputes his
liability with respect to such claim or demand, such dispute shall be
resolved in accordance with Section 13.5 hereof; if Lett fails to
notify Middle Bay within the Notice Period that he disputes such
claim, the amount of such claim shall be conclusively deemed the
undisputed liability of Lett hereunder.
(e) All claims for indemnification by Lett under this
Agreement shall be asserted and resolved under the procedures set
forth above, substituting in the appropriate place "Lett" for "Middle
Bay" and "Middle Bay" for "Lett" (and variations thereof).
13.4 PAYMENT. Upon determination of the liability under Section
13.3 or 13.5 hereof, the appropriate party shall pay to the other, as the case
may be, within ten (10) days after such determination, the amount of any claim
for indemnification made hereunder.
13.5 ARBITRATION.
(a) All disputes under this Article XIII shall be settled
by arbitration in Mobile, Alabama or in the state where Middle Bay's
corporate headquarters is located at the time of such arbitration,
before a single arbitrator pursuant to the rules of the American
Arbitration Association. Arbitration may be commenced at any time by
any party hereto giving Notice to each other party to a dispute that
such dispute has been referred to arbitration under this Section 13.5.
The arbitrator shall be selected by the joint agreement of Lett and
Middle Bay, but if they do not so agree within twenty (20) days after
the date of the Notice referred to above, the selection shall be made
pursuant to the rules from the panels of arbitrators maintained by
such Association. Any award rendered by the arbitrator shall be
conclusive and binding upon the parties hereto. Any such award shall
be accompanied by a written opinion of the arbitrator, giving the
reasons for the award. This provision for arbitration shall be
specifically enforceable by the parties, and the decision of the
arbitrator in accordance herewith shall be final and binding, and
there shall be no right of appeal therefrom. Each party shall pay its
own expenses of arbitration, and the expenses of the arbitrator shall
be equally shared; provided, however, that if in the opinion of the
arbitrator any claim for indemnification or any defense or objection
thereto
- 23 -
<PAGE>
was unreasonable, the arbitrator may assess, as part of his award, all
or any part of the arbitration expenses of the other party (including
reasonable attorneys' fees) and of the arbitrator against the party
raising such unreasonable claim, defense or objection.
(b) To the extent that arbitration may not be legally
permitted or required hereunder and the parties to any dispute
hereunder may not at the time of such dispute mutually agree to submit
such dispute to arbitration, any party may commence a civil action in
a court of competent jurisdiction to resolve disputes hereunder and to
seek any appropriate remedy. Nothing contained in this Section 13.5
shall prevent the parties from settling any dispute by mutual
agreement at any time.
13.6 OTHER RIGHTS AND REMEDIES NOT AFFECTED. The indemnification
rights of the parties under this Article XIII are independent of and in
addition to such rights and remedies as the parties may have at law or in
equity or otherwise for any misrepresentation, breach of warranty or failure to
fulfill any agreement or covenant hereunder on the part of any party hereto,
including without limitation the right to seek specific performance, rescission
or restitution, none of which rights or remedies shall be affected or
diminished hereby.
13.7 LIMITATION ON INDEMNIFICATION BY LETT. The indemnification by
Lett, pursuant to this Article XIII, shall be limited to (i) a term of two (2)
years from the Closing Date at which time Lett's indemnity under this Article
XIII will terminate and Lett will have no further liability thereunder; and
(ii) the Middle Bay Common Stock acquired by Lett pursuant to the Merger and
such indemnification may be satisfied, at Lett's option, by (a) payment in cash
or (b) through the transfer and delivery to Middle Bay of Middle Bay Common
Stock, to be credited against Lett's obligations hereunder at an amount equal
to seventy-five percent (75%) of the prior twenty (20) days' average market
price for such Middle Bay Common Stock from the date of the Claim Notice. To
the extent Lett has sold or transferred Middle Bay Common Stock and the number
of shares of Middle Bay Common Stock owned by him at the time of
indemnification is inadequate to satisfy such indemnification, then Lett shall
be liable for the remainder of such indemnification in an amount not to exceed
the lesser of (a) the consideration received by Lett for the Middle Bay Common
Stock so previously transferred or sold (which consideration shall be for an
amount no less than seventy-five percent (75%) of the prior twenty (20) days'
average market price for such Middle Bay Common Stock from the date of such
transfer or sale, or (b) the amount of the remainder of such indemnification.
13.8 LIMITATION ON INDEMNIFICATION BY MIDDLE BAY. The
indemnification by Middle Bay pursuant to this Article XIII shall be limited to
a term of two (2) years from the Closing Date.
ARTICLE XIV
BROKERS AND FINDERS
Middle Bay represents and warrants to Bison and Lett, and Bison and
Lett represent and warrant to Middle Bay, that no broker, finder or consultant
has been employed in connection with this transaction or has
- 24 -
<PAGE>
otherwise engaged in any conduct giving rise to any right to earn any
commission or finder's fee for introducing Middle Bay and Bison to each other,
for assisting Middle Bay and Bison in negotiating the terms of this Agreement,
or for performing any similar service in connection with this transaction,
other than a broker, finder or consultant to whom payment in full for such
services is made by the party employing such person so that such person makes
no claim against the other party with respect to such services. Middle Bay, on
the one hand, and Bison and Lett, on the other hand, agree to indemnify and
hold the other harmless in accordance with Article XIII from any loss or
liability or other damage sustained or incurred by that other party by reason
of any conduct of the indemnifying party giving any right to any person to earn
a commission or finder's fee in connection with the transaction contemplated by
this Agreement.
ARTICLE XV
NOTICES
Any notice, consent or other communication (hereinafter sometimes
referred to as a "Notice") required or permitted under this Agreement shall be
sufficient only if given in writing and personally delivered, actually
received, transmitted by facsimile ("fax") equipment (but only if the address
shown below or otherwise provided by Notice includes a telephone number for
such transmission, which may be designated as a "fax" or "telecopier" number),
or mailed by certified or registered mail, postage prepaid, and addressed or
otherwise directed as follows:
Middle Bay: Middle Bay Oil Company, Inc.
Attn: John J. Bassett, President
115 South Dearborn Street
Mobile, Alabama 36602
Fax: (334) 433-7802
with a copy to: H. Grady Thrasher, III, Esq.
Thrasher, Whitley, Hampton & Morgan
Five Concourse Parkway, Suite 2150
Atlanta, Georgia 30328
Fax: (770) 804-5555
Bison: Bison Energy Corporation
Attn: C. J. Lett, III, President
9320 East Central
Wichita, KS 67206
Fax: (316) 636-1803
with a copy to: D. Keith McFall, Esq.
Phillips McFall McCaffrey McVay & Murrah
211 North Robinson
Oklahoma City, OK 73102
Fax: (405) 235-4133
- 25 -
<PAGE>
The party claiming any benefit by reason of such Notice shall have the burden
of establishing the fact and date of such delivery, receipt, transmission or
mailing, and the following rules shall determine when a Notice becomes
effective (with the earliest date controlling if more than one of these rules
applies):
(a) personally delivered Notices shall be effective on
the day of delivery;
(b) Notices mailed in accordance with this paragraph
shall be effective three Business Days after such mailing;
(c) Notices sent by facsimile transmission shall be
effective (i) upon transmission, if such transmission is completed at
or before 5:00 p.m. on a Business Day, or (ii) on the first Business
Day after transmission, if such transmission is completed at any other
time; and
(d) Notices received through any other means shall be
effective on the day of receipt.
Any party may change its address or fax number (or both) for this purpose by
giving Notice of such change to the other parties.
ARTICLE XVI
GOVERNING LAW
This Agreement shall be governed by Alabama law.
ARTICLE XVII
MISCELLANEOUS
17.1 ENTIRE AGREEMENT. This Agreement contains the entire agreement
among the parties and supersedes all prior discussion and agreements.
17.2 AMENDMENT; WAIVER. This Agreement may not be changed,
modified, or otherwise amended unless that amendment is written and signed by
all parties whose rights may be materially affected thereby. No action taken
pursuant to this Agreement, including any investigation by or on behalf of any
party, shall be deemed to constitute a waiver by the party taking such action
of compliance with any representation, warranty, covenant or agreement herein
contained. The waiver by any party hereto of a breach of any provision or
condition contained in this Agreement shall not operate or be construed as a
waiver of any subsequent breach or of any other conditions hereof.
17.3 SURVIVAL. Sections 7.1, 7.2, 7.3 and 7.4, and Articles VIII,
IX, XIII and thereafter shall survive the Closing of the transaction
contemplated hereby for a period of two (2) years from the Closing Date.
- 26 -
<PAGE>
Other provisions of this Agreement shall merge into the documents executed at
Closing, so that such provisions have no further force or effect after Closing.
17.4 BENEFIT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
assigns.
17.5 ARTICLE, SECTION AND EXHIBIT HEADINGS AND REFERENCES; GENDER;
NUMBER. The captions of each article, section, subsection and exhibit of this
Agreement and the pronouns used herein, whether masculine, feminine or neuter,
singular or plural, are intended only for convenience and shall not be
construed to limit or change the meaning of any language contained in this
Agreement. Whenever appropriate to the context, the neuter or either gender
shall be deemed to include the masculine or the feminine, as the case may be,
the singular shall be deemed to include the plural, or conversely. A reference
to any exhibit, article, section, subsection or other provision is a reference
to such exhibit to or provision of this Agreement unless otherwise required by
the context.
17.6 TIME. Time is of the essence of this Agreement.
17.7 KNOWLEDGE. For purposes of this Agreement, all referenced "to
the best of our knowledge" or "knowledge," or any variation thereof, shall be
limited to the actual knowledge of Lett or the executive management of Bison,
consisting of John Stephens, Chief Financial Officer; Steve Anderson, Petroleum
Engineer; and employees Steve Wilson and Russell Meyers.
17.8 MATERIALITY. For all purposes of this Agreement, except with
respect to tax liabilities not reflected in the Financial Statements set forth
in Exhibit "D", "material" shall mean any claim, action or event (involving
single or aggregate claims, actions or events) involving $50,000 or greater in
value.
17.9 DATE OF AGREEMENT. For all purposes under this Agreement, the
date of this Agreement shall be deemed to be the day and year first above
written.
17.10 BUSINESS DAY. For purposes of this Agreement, the term
"Business Day" means a day on which the United States Postal Service makes
routine mail deliveries to its business customers. In any case, the term
"Business Day" does not include Saturday or Sunday within its meaning.
17.11 NO THIRD-PARTY BENEFICIARIES. The provisions of this Agreement
are not intended to benefit, and may not be enforced by, any person or entity
other than Middle Bay, Bison and Lett.
17.12 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability, without invalidating or rendering
unenforceable the remaining provisions of this Agreement.
- 27 -
<PAGE>
17.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same agreement.
17.14 FURTHER ASSURANCES. Bison and Lett agree to execute and
deliver, after the date of this Agreement and at or after Closing, without
additional consideration, such further assurances, instruments and documents
and to take such further actions as Middle Bay may request in order to fulfill
the intent of this Agreement and the transactions contemplated hereby.
17.15 TERMINATION.
(a) Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated by Notice of
termination at any time before Closing as follows:
(i) by mutual consent of Bison and Middle Bay; or
(ii) by Middle Bay at any time if the
representations and warranties of Bison or Lett contained in
Article IX were incorrect in any material respect when made or
at any time thereafter; or
(iii) by Bison and Lett acting together at any time
if the representations and warranties of Middle Bay contained
in Article VIII were incorrect in any material respect when
made or at any time thereafter; or
(iv) by any nonbreaching party if Closing fails to
occur on or before February 28, 1997 or such later date to
which the parties reasonably agree.
Such termination shall be effective upon the effective date of such
Notice.
(b) In the event of termination pursuant to the
provisions of this Section 17.15, this Agreement shall have no further
force or effect, and no party shall have any liability to any of the
other parties in respect of this Agreement, unless the termination was
prompted by any material misrepresentation, breach of warranty or
breach of covenant or other agreement by any party, in which event
such party shall be liable to the other party for all costs and
expenses of the other party in connection with the preparation,
negotiation, execution and performance of this Agreement.
(c) The provisions of this Section 17.15 are not intended
to provide an exclusive remedy for any party's misrepresentation,
breach of warranty, breach of covenant or other default. Any party may
elect to enforce its rights under this Agreement, by seeking any
remedy available at law or in
- 28 -
<PAGE>
equity (including specific performance), instead of electing to
terminate this Agreement pursuant to this Section 17.15. The
provisions of this Section 17.15 are intended to provide the exclusive
remedy for failure of any contingency or condition precedent described
in this Agreement, except to the extent that such failure results from
misrepresentation, breach of warranty, breach of covenant or other
default by any party.
17.16 SIGNATURES REQUIRED. This Agreement shall not become effective
until or unless this Agreement is signed by Middle Bay, Bison and Lett.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed, their respective corporate seals to be affixed and
the foregoing attested, all by their respective duly authorized officers, as of
the day and year first above written or as otherwise set forth below.
"MIDDLE BAY" MIDDLE BAY OIL COMPANY, INC.
Date: 2-10-97 By: /s/ John J. Bassett
-------- -------------------------------------
John J. Bassett, President
"BISON" (Alabama) BISON ENERGY CORPORATION (Alabama)
By: Middle Bay Oil Company, Inc., as
Incorporator
Date: 2-10-97
--------
By: /s/ John J. Bassett
-------------------------------------
John J. Bassett, President
"BISON" (Kansas) BISON ENERGY CORPORATION (Kansas)
Date: 2-6-97 By: /s/ C. J. Lett, III
-------- -------------------------------------
C. J. Lett, III, President
"LETT"
/s/ C. J. Lett, III
Date: 2-6-97 ----------------------------------------
-------- C. J. Lett, III
- 29 -
<PAGE>
INDEX OF
EXHIBITS AND SCHEDULES
Exhibit "A" - Oil and Gas Properties
Exhibit "B" - Reserve Report
Exhibit "C" - Computation of Cash Consideration
Exhibit "D" - Financial Statements
Exhibit "E" - Inventory
Exhibit "F" - Real Estate
Schedule 9.8 - Litigation
Schedule 9.9 - Employee and Director Benefits
Schedule 9.10 - Environmental Defects Applicable to the Properties
Schedule 11.10 - Disclosure of Competing Business Interests by Lett
- 30 -
<PAGE>
<TABLE>
<CAPTION>
LEASE ID LEASE NAME WELL NAME TYPE SEC TWP RNG COUNTY ST BECWI BECONRI
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1145193 CAMPBELL CAMPBELL WI 33 29S 7W KINGMAN KS 0.70250000 0.46468749
1137191 COX COX #1-9 WI 9 31S 9W HARPER KS 0.12062500 0.09382812
1137150 CRITSER CRITSER 1A WI 16 31S 8W HARPER KS 0.29774979 0.24424748
1137151 CRITSER CRITSER 1B WI 16 31S 8W HARPER KS 0.17650631 0.14120496
1137152 CRITSER CRITSER C #1,#2 WI 16 31S 8W HARPER KS 0.20274979 0.16208762
1145150 CRUMLEY CRUMLEY #1,3,4 WI 22 30S 7W KINGMAN KS 0.46875000 0.38452152
1137153 CULVER CULVER #1,2SWD,3,4 WI 9 31S 8W HARPER KS 0.93875000 0.77006800
1137500 DARNES (JODY) DARNES #1, #2, B#1 WI 18 31S 8W HARPER KS 0.25000000 0.21875000
1137154 DARNES RANCH DARNES RANCH #2,3,4 SWD,5 WI 24 31S 9W HARPER KS 0.46875000 0.41015625
1145151 DEE DEE #1 WI 31 29S 8W KINGMAN KS 0.67750000 0.55390625
1137156 DOMBAUGH DOMBAUGH 1-21 WI 21 31S 8W HARPER KS 0.19875000 0.15297500
1137158 DRESSER DRESSER 1 B WI 9 31S 8W HARPER KS 0.21687500 0.17350000
1137157 DRESSER DRESSER 1A WI 9 31S 8W HARPER KS 0.32750000 0.28656250
1137159 DRESSER DRESSER 1C WI 9 31S 8W HARPER KS 0.20906250 0.16725000
1145163 ELLIOTT ELLIOTT WI 19 30S 9W KINGMAN KS 0.71875000 0.52382812
1137161 FLEMING B FLEMING 1B WI 8 31S 8W HARPER KS 0.14991673 0.11993345
1137160 FLEMING A (JAMES)FLEMING A #1 WI 8 31S 8W HARPER KS 0.29775014 0.26053140
1137502 GRABS B GRABS B #1 WI 7 31S 8W HARPER KS 0.23143700 0.17719440
1145152 HARTMAN HARTMAN #1 WI 16 30S 8W KINGMAN KS 0.46875000 0.37170411
1037150 HEFFEL HEFFEL WI 14 21N 12W MAJOR KS 0.01562500 0.01187500
1137163 HOSTETLER HOSTETLER #2 WI 19 31S 6W HARPER KS 0.67750000 0.59281250
1145500 KREHBIEL MTM KREHBIEL #1 WI 26 29S 7W KINGMAN KS 0.12499852 0.10156250
1145155 KYLE A KYLE 1A WI 10 30S 7W KINGMAN KS 0.49562500 0.39650000
1145155 KYLE HC KYLE HC #2,3 WI 3 30S 7W KINGMAN KS 0.49562500 0.39650000
0109500 LOWE/HORN LOWE #1, #1B, #2B; WI 18S 6E CHASE KS 0.02000000 0.01695312
HORN #2-14, #5-13,
#6-13, #7-13
1007500 WALBAUM(ORRI) MARY DELANA #1 ORRI 11 12N 10W CANADIAN OK
1145501 McKENNA McKENNA #1 WI 16 28S 8W KINGMAN KS
1184150 MCMILLAN MCMILLAN #3 WI 29 22S 14W STAFFORD KS 0.17291688 0.14072934
1145157 MESSENGER MESSENGER 1 WI 18 30S 8W KINGMAN KS 0.81250000 0.66650400
1137185 MUIR MUIR #3A WI 10 31S 8W HARPER KS 0.75875000 0.60700000
1137167 MUIR MUIR #1B,2B WI 10 31S 8W HARPER KS 0.25312500 0.20250000
1137182 MOHAWKS MUIR ORI MOHAWKS MUIR ORRI 27 31S 8W HARPER KS 0.00000000 0.00000000
1137166 MUIR AB MUIR AB #1 WI 12 31S 9W HARPER KS 0.49000000 0.38187500
1137168 NEWBERRY NEWBERRY 1,2,& 1 S WI 35 31S 9W HARPER KS 0.46749631 0.38350109
SWD
</TABLE>
<TABLE>
<CAPTION>
LEASE ID LEASE NAME WELL NAME BECGNRI BECORI BECGRI BECOIL Rev BECGAS Rev
<S> <C> <C> <C> <C> <C> <C> <C>
1145193 CAMPBELL CAMPBELL 0.46468749 0.46468749 0.46468749
1137191 COX COX #1-9 0.09382812 0.09382812 0.09382812
1137150 CRITSER CRITSER 1A 0.24424748 0.24424748 0.24424748
1137151 CRITSER CRITSER 1B 0.14120496 0.14120496 0.14120496
1137152 CRITSER CRITSER C #1,#2 0.16208762 0.16208762 0.16208762
1145150 CRUMLEY CRUMLEY #1,3,4 0.38452152 0.38452152 0.38452152
1137153 CULVER CULVER #1,2SWD,3,4 0.77006800 0.77006800 0.77006800
1137500 DARNES (JODY) DARNES #1, #2, B#1 0.21875000 0.21875000 0.21875000
1137154 DARNES RANCH DARNES RANCH #2,3,4 SWD,5 0.41015625 0.41015625 0.41015625
1145151 DEE DEE #1 0.55390625 0.55390625 0.55390625
1137156 DOMBAUGH DOMBAUGH 1-21 0.15297500 0.15297500 0.15297500
1137158 DRESSER DRESSER 1 B 0.17350000 0.17350000 0.17350000
1137157 DRESSER DRESSER 1A 0.28656250 0.28656250 0.28656250
1137159 DRESSER DRESSER 1C 0.16725000 0.16725000 0.16725000
1145163 ELLIOTT ELLIOTT 0.52382812 0.52382812 0.52382812
1137161 FLEMING B FLEMING 1B 0.11993345 0.11993345 0.11993345
1137160 FLEMING A (JAMES)FLEMING A #1 0.26053140 0.26053140 0.26053140
1137502 GRABS B GRABS B #1 0.17719440 0.05062700 0.05062700 0.22782140 0.22782140
1145152 HARTMAN HARTMAN #1 0.37170409 0.37170411 0.37170409
1037150 HEFFEL HEFFEL 0.01187500 0.01187500 0.01187500
1137163 HOSTETLER HOSTETLER #2 0.59281250 0.59281250 0.59281250
1145500 KREHBIEL MTM KREHBIEL #1 0.10156250 0.10156250 0.10156250
1145155 KYLE A KYLE 1A 0.39650000 0.39650000 0.39650000
1145155 KYLE HC KYLE HC #2,3 0.39650000 0.39650000 0.39650000
0109500 LOWE/HORN LOWE #1, #1B, #2B; 0.01695312 0.01695312 0.01695312
HORN #2-14, #5-13,
#6-13, #7-13
1007500 WALBAUM(ORRI) MARY DELANA #1 0.00411989 0.00475373 0.00411989 0.00475373
1145501 McKENNA McKENNA #1 0.00000000 0.00000000
1184150 MCMILLAN MCMILLAN #3 0.14072934 0.00000000
1145157 MESSENGER MESSENGER 1 0.66650400 0.66650400 0.66650400
1137185 MUIR MUIR #3A 0.60700000 0.60700000 0.60700000
1137167 MUIR MUIR #1B,2B 0.20250000 0.20250000 0.20250000
1137182 MOHAWKS MUIR ORI MOHAWKS MUIR 0.00000000 0.03000000 0.03000000 0.03000000 0.03000000
1137166 MUIR AB MUIR AB #1 0.38187500 0.38187500 0.38187500
1137168 NEWBERRY NEWBERRY 1,2,& 1 0.38350109 0.38350109 0.38350109
SWD
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LEASE ID LEASE NAME WELL NAME TYPE SEC TWP RNG COUNTY ST BECWI
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1193500 PAULSEN PAULSEN #1-25 WI 25 24S 11W STAFFORD KS 0.09562597
1137184 RAIDA RAIDA #1 WI 18 30S 6W KINGMAN KS 0.62500000
1145194 ROHLMAN ROHLMAN 1 & 2 WI 28 29S 7W KINGMAN KS 0.70250000
1137503 SANDERS SANDERS #1 WI 20 31S 8W HARPER KS 0.23437500
1137170 SANDERS SANDERS #1-19, 2-1 WI 19 31S 8W HARPER KS 0.35500000
1137515 SANDERS A SANDERS 1A,2A WI 20 31S 8W HARPER KS 0.23437500
1137510 SANDERS A SANDERS 4A WI 19 31S 8W HARPER KS 0.12500000
1145176 SCHWARTZ SCHWARTZ #1-11 WI 11 30S 9W KINGMAN KS 0.13062500
1000000 SPIVEY PLANT SPIVEY PLANT WI 5 31S 8W HARPER KS ++
1137171 STEPHENS STEPHENS #1,2,3 WI 10 31S 8W HARPER KS 0.97000000
1137172 STEPHENS STEPHENS 1A WI 15 31S 8W HARPER KS 0.67150000
1137173 STEPHENS STEPHENS 1B WI 16 31S 8W HARPER KS 0.27656250
1145158 SWINGLE SWINGLE 1-14 WI 14 30S 9W KINGMAN KS 0.50000000
1065500 TAYLOR B TAYLOR B #1-12 WI 7 22N 13W WOODS OK 0.02812500
1137174 VALDOIS VALDOIS A#1 WI 2 31S 8W HARPER KS 0.67150000
1137175 VALDOIS VALDOIS B#1,2 WI 3 31S 8W HARPER KS 0.32125000
1137102 WARREN A WARREN 1A WI 17 31S 8W HARPER KS 0.29749988
1137177 WILEY WILEY #2A-29 WI 29 31S 8W HARPER KS 0.68312500
1137178 WILLIAMS WILLIAMS A #1 WI 27 6N 2W MCCLAIN OK 0.67150000
1171502 WILLINGER WILLINGER 1-19 WI 19 24S 10W RENO KS 0.09562030
1145161 WINGATE WINGATE #1,#2 WI 1 31S 9W HARPER KS 0.75875000
1137506 YATES YATES #2 WI 18 31S 8W HARPER KS 0.23437500
1137511 YATES YATES #3 WI 18 31S 8W HARPER KS 0.23437500
1137179 YODER A YODER A #1 WI 11 31S 8W HARPER KS 0.25000000
</TABLE>
<TABLE>
<CAPTION>
LEASE ID LEASE NAME WELL NAME BECONRI BECGNRI BECORI BECGRI BECOIL Rev BECGAS Rev
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1193500 PAULSEN PAULSEN #1-25 0.07936880 0.07936880 0.07936880 0.07936880
1137184 RAIDA RAIDA #1 0.51025397 0.51025397 0.51025397 0.51025397
1145194 ROHLMAN ROHLMAN 1 & 2 0.46468749 0.46468749 0.46468749 0.46468749
1137503 SANDERS SANDERS #1 0.20507812 0.20507812 0.20507812 0.20507812
1137170 SANDERS SANDERS #1-19, 2-1 0.28400000 0.28400000 0.28400000 0.28400000
1137515 SANDERS A SANDERS 1A,2A 0.17431641 0.17431641 0.17431641 0.17431641
1137510 SANDERS A SANDERS 4A 0.08564700 0.07783200 0.01250000 0.01250000 0.09814700 0.09033200
1145176 SCHWARTZ SCHWARTZ #1-11 0.10257812 0.10257812 0.10257812 0.10257812
1000000 SPIVEY PLANT SPIVEY PLANT ++ ++ ++ ++
1137171 STEPHENS STEPHENS #1,2,3 0.79570300 0.79570300 0.79570300 0.79570300
1137172 STEPHENS STEPHENS 1A 0.58756250 0.58756250 0.58756250 0.58756250
1137173 STEPHENS STEPHENS 1B 0.22125000 0.22125000 0.22125000 0.22125000
1145158 SWINGLE SWINGLE 1-14 0.43250000 0.43250000 0.43250000 0.43250000
1065500 TAYLOR B TAYLOR B #1-12 0.02250000 0.02109380 0.02250000 0.02109380
1137174 VALDOIS VALDOIS A#1 0.58756250 0.58756250 0.58756250 0.58756250
1137175 VALDOIS VALDOIS B#1,2 0.25700000 0.25700000 0.25700000 0.25700000
1137102 WARREN A WARREN 1A 0.26031239 0.26031239 0.26031239 0.26031239
1137177 WILEY WILEY #2A-29 0.54650000 0.54650000 0.54650000 0.54650000
1137178 WILLIAMS WILLIAMS A #1 0.58756250 0.58756250 0.58756250 0.58756250
1171502 WILLINGER WILLINGER 1-19 0.07936880 0.07936880 0.07936880 0.07936880
1145161 WINGATE WINGATE #1,#2 0.60700000 0.60700000 0.60700000 0.60700000
1137506 YATES YATES #2 0.20507812 0.20507812 0.20507812 0.20507812
1137511 YATES YATES #3 0.20507812 0.20507812 0.20507812 0.20507812
1137179 YODER A YODER A #1 0.20000000 0.20000000 0.20000000 0.20000000
</TABLE>
Footnotes: ++ Ownership in the Spivey Gas Plant adjusts annually based upon the
contract dated October 1, 1955 (attached).
<PAGE>
EXHIBIT A
Page 3
Undeveloped acreage.
All undeveloped acreage in the State of Kansas owned by Bison Energy
Corporation, save and except for the provisions and acreage subject to Schedule
11.10 and Section 10.9 of this Contract.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B * ECON SUMMARY *
AS OF 7 / 1996
END NO. *GROSS PRODUCTION* *NET PRODUCTION* *PRICES* ****NET REVENUE****
MO-YR WELLS OIL GAS OIL GAS OIL GAS OIL GAS OTHER TOTAL
- ----- -----MBBL --------MMCF --------MBBL--------MMCF-------- $/B--- $/M--- M$----------- M$----------- M$-------- M$----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12-96 35.0 61.663 579.553 25.331 256.797 18.11 2.31 458.659 592.926 0.000 1051.584
12-97 67.0 116.372 1026.318 49.059 448.981 18.06 2.29 885.932 1030.365 0.000 1916.297
12-98 66.0 107.912 958.130 47.112 428.535 18.00 2.32 847.978 995.034 0.000 1843.011
12-99 65.0 100.877 900.962 45.450 409.870 17.95 2.35 815.961 962.993 0.000 1778.954
12- 0 59.0 92.906 831.420 43.285 386.737 17.87 2.39 773.382 923.363 0.000 1696.744
12- 1 53.0 85.246 779.075 41.138 369.586 17.77 2.42 731.040 894.740 0.000 1625.780
12- 2 52.0 79.994 740.260 39.866 356.770 17.73 2.45 706.975 873.588 0.000 1580.563
12- 3 50.0 74.688 703.162 38.567 344.479 17.69 2.48 682.277 853.076 0.000 1535.353
12- 4 50.0 71.044 671.331 37.533 333.289 17.67 2.50 663.140 834.740 0.000 1497.880
12- 5 49.0 67.730 622.217 36.550 320.344 17.65 2.54 645.012 812.675 0.000 1457.687
12- 6 45.0 63.351 570.862 35.050 303.298 17.57 2.57 615.877 779.188 0.000 1395.065
12- 7 45.0 60.648 547.989 34.181 294.345 17.55 2.60 600.035 764.649 0.000 1364.685
12- 8 45.0 58.162 526.471 33.345 285.773 17.54 2.63 584.843 750.658 0.000 1335.501
12- 9 41.8 54.536 496.834 31.898 271.961 17.45 2.67 556.672 724.820 0.000 1281.493
12-10 36.7 48.639 458.894 30.241 258.696 17.33 2.69 524.013 696.725 0.000 1220.738
REM. 0.0 163.428 2335.245 112.090 1279.498 17.31 2.83 1940.157 3618.401 0.000 5558.559
TOT. 0.0 1307.196 12748.722 680.696 6348.960 17.68 2.54 12031.950 16107.939 0.000 28139.895
</TABLE>
<TABLE>
<CAPTION>
ADVALOREM OPERATING TOTAL OPERATIONAL ***NET INVESTMENTS*** CUM 10.0% CUM
YR & PROD TAX EXPENSES EXPENSES CASH FLOW TANGIBLE INTANGIBLE LEASEHOLD CASH FLOW CASH FLOW DISC C.F.
- -- M$------ M$---------- M$---------- M$--------- M$---------- M$------ M$----- M$------------ M$----------- M$----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
96 6.523 391.116 397.639 653.945 0.000 0.000 0.000 653.945 653.945 638.789
97 11.516 762.758 774.274 1142.023 0.000 0.000 0.000 1142.023 1795.967 1677.384
98 10.698 750.136 760.834 1082.177 0.000 0.000 0.000 1082.177 2878.145 2572.084
99 9.989 738.224 748.213 1030.741 0.000 0.000 0.000 1030.741 3908.885 3346.788
0 9.256 701.891 711.147 985.597 0.000 0.000 0.000 985.597 4894.481 4020.219
1 8.581 670.806 679.386 946.394 0.000 0.000 0.000 946.394 5840.875 4608.077
2 8.094 660.654 668.749 911.814 0.000 0.000 0.000 911.814 6752.598 5122.968
3 7.648 647.766 655.415 879.938 0.000 0.000 0.000 879.938 7632.629 5574.686
4 7.247 640.306 647.552 850.328 0.000 0.000 0.000 850.328 8482.958 5971.520
5 6.742 630.699 637.441 820.246 0.000 0.000 0.000 820.246 9303.202 6319.516
6 6.258 595.197 601.455 793.609 0.000 0.000 0.000 793.609 10096.810 6625.604
7 5.961 588.176 594.137 770.548 0.000 0.000 0.000 770.548 10867.360 6895.777
8 5.684 581.294 586.979 748.522 0.000 0.000 0.000 748.522 11615.880 7134.370
9 4.612 548.105 552.717 728.776 0.000 0.000 0.000 728.776 12344.660 7345.551
10 3.866 523.159 527.026 693.713 0.000 0.000 0.000 693.713 13038.370 7528.296
REM. 18.631 2008.104 2026.734 3531.823 0.000 0.000 0.000 3531.823 3531.823 684.557
TOT. 131.305 11438.394 11569.697 16570.195 0.000 0.000 0.000 16570.195 16570.195 8212.853
</TABLE>
<TABLE>
<CAPTION>
PROFITABILITY INDICATORS PRESENT WORTH PROFILE
- ------------------------------ %---- M$--------
<S> <C> <C> <C>
PAYOUT (YRS) 0.00 5.0 11177.810
DISCOUNTED PAYOUT (YRS) 0.00 10.0 8212.853
DCF RATE OF RETURN (%) 100.00 15.0 6436.181
INCOME/INVESTMENT 100.00 20.0 5290.457
DISC INCOME/INVESTMENT 100.00 25.0 4504.834
30.0 3938.217
ULTIMATE OIL (MBBL) 2270.1 40.0 3181.373
ULTIMATE GAS (MMCF) 20503.7 50.0 2700.940
70.0 2125.596
100.0 1672.031
</TABLE>
<PAGE>
EXHIBIT B ONE LINE SUMMARIES
AS OF 7 / 1996
<TABLE>
<CAPTION>
10.0% DISC
GROSS OIL GROSS GAS NET OIL NET GAS NET REVENUE TOT EXPENSE CAPITAL CASH FLOW CASH FLOW
FILE TITLE MBBL----------- MMCF------- MBBL--------MMCF------- M$--------- M$---------- M$------- M$-------- M$ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1145193 CAMPBELL - #1
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
1137191 COX 1-9 -
13.331 628.605 1.251 58.981 127.843 26.403 0.000 101.439 57.701
1137150 CRITSER A - CRITSER 1A
6.078 206.606 1.485 50.463 157.534 45.828 0.000 111.706 66.405
1137151 CRITSER B - CRITSER 1B
4.640 9.172 0.655 1.295 17.030 13.126 0.000 3.905 3.302
1137152 CRITSER C - CRITSER C #1, #2
10.480 21.020 1.699 3.407 44.319 34.339 0.000 9.981 8.280
1145150 CRUMLEY - CRUMLEY #1, 3, 4
10.284 34.381 3.955 13.220 108.756 89.255 0.000 19.501 16.917
1137153 CULVER - CULVER #1, 2SWD, 3, 4
42.628 817.297 32.826 629.374 1543.933 641.129 0.000 902.805 464.039
1137154 DARNES RANCH - DARNES RANCH #1, 2, 3, 4, SWD, 5
40.802 152.245 16.735 62.444 467.529 245.382 0.000 222.206 137.320
1145151 DEE - DEE #1
0.000 8.468 0.000 4.691 10.976 9.168 0.000 1.808 1.692
1137156 DOMBAUGH - DOMBAUGH 1-21
13.218 99.118 2.022 15.163 71.864 41.739 0.000 30.125 21.716
1137157 DRESSER A - DRESSER 1A
19.361 358.913 5.548 102.851 397.173 109.103 0.000 288.070 122.104
1137158 DRESSER B - DRESSER 1 B
18.741 84.444 3.252 14.651 107.628 70.414 0.000 37.213 22.037
1137159 DRESSER C - DRESSER 1C
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
1145163 ELLIOTT - ELLIOTT
0.496 24.369 0.260 12.765 30.895 25.643 0.000 5.252 4.675
1137161 FLEMING B - FLEMING 1B
16.198 135.681 1.943 16.273 64.997 35.892 0.000 29.105 16.518
1145152 HARTMAN - HARTMAN #1
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
1137163 HOSTETLER - HOSTETLER #2
20.056 0.000 11.890 0.000 251.466 162.851 0.000 88.615 49.931
1137160 JAMES FLEMING - FLEMING A #1
13.870 175.900 3.614 45.827 144.297 53.645 0.000 90.652 45.958
1145155 KYLE A - KYLE 1A
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
1145156 KYLE HC - KYLE HC #2, 3
20.075 433.817 7.960 172.008 500.327 240.752 0.000 259.574 150.986
1184150 MCMILLAN - MCMILLIAN #3
20.092 0.000 2.827 0.000 59.802 37.032 0.000 22.770 12.827
</TABLE>
<PAGE>
EXHIBIT B ONE LINE SUMMARIES
AS OF 7 / 1996
<TABLE>
<CAPTION>
10.0% DISC
GROSS OIL GROSS GAS NET OIL NET GAS NET REVENUE TOT EXPENSE CAPITAL CASH FLOW CASH FLOW
FILE TITLE MBBL----------- MMCF------- MBBL--------MMCF------- M$--------- M$---------- M$------- M$-------- M$ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1145157 MESSENGER - MESSENGER 1
0.000 71.695 0.000 47.785 121.238 82.203 0.000 39.035 27.969
1137185 MUIR A - MUIR #1A
8.516 116.684 5.169 70.827 285.940 173.767 0.000 112.173 89.104
1137166 MUIR AB - MUIR AB #1
2.397 8.535 0.915 3.259 23.363 20.618 0.000 2.745 2.475
1137167 MUIR B - MUIR #1B, #2B
31.528 135.468 6.385 27.432 204.548 105.278 0.000 99.270 64.225
1137168 NEWBERRY - 1, 2, & 3
18.386 447.183 7.051 171.495 587.420 400.122 0.000 187.298 115.125
1137184 RAIDA - RAIDA #1
1.974 92.631 1.007 47.265 107.323 81.365 0.000 25.958 14.787
1145194 ROHLMAN - #1 & #2
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
1137170 SANDERS - SANDERS #1-19, #2-19
10.853 152.622 3.082 43.345 153.690 81.182 0.000 72.508 53.138
1145176 SCHWARTZ 1-11 -
2.173 1349.141 0.223 138.392 246.184 38.085 0.000 208.098 101.191
1137171 STEPHENS - STEPHENS #1,2,3
34.330 787.717 27.316 626.789 1480.625 685.129 0.000 795.496 422.420
1137172 STEPHENS A - STEPHENS 1A
14.883 126.647 8.745 74.413 380.578 142.167 0.000 238.411 119.622
1137173 STEPHENS B - STEPHENS 1B
64.574 110.673 14.287 24.486 366.542 112.836 0.000 253.707 124.963
1145158 SWINGLE - SWINGLE 1-14
0.000 107.517 0.000 46.501 117.963 70.226 0.000 47.736 34.619
1137174 VALDIOS A - VALDIOS A#1
8.930 32.121 5.247 18.873 159.455 113.141 0.000 46.314 30.500
1137175 VALDOIS B - VALDOIS B#1,2
30.274 55.339 7.781 14.222 201.213 155.420 0.000 45.793 29.335
1137102 WARREN A - WARREN 1A
8.638 106.369 2.249 27.689 88.958 51.978 0.000 36.980 23.337
1137177 WILEY - WILEY #2A-29
13.719 27.913 7.497 15.255 189.756 130.033 0.000 59.723 44.302
1137178 WILLIAMS - WILLIAMS A #1
1.458 11.177 0.857 6.567 34.203 31.074 0.000 3.129 2.818
1145161 WINGATE - WINGATE #1, #2
7.435 217.577 4.513 132.069 364.641 210.304 0.000 154.337 114.017
1137179 YODER A - YODER A #1
0.562 8.793 0.112 1.759 6.627 6.311 0.000 0.316 0.298
1137500 DARNES (JODY) - DARNES #1, #2, B#1
3.189 48.677 0.698 10.648 28.669 23.158 0.000 5.511 4.924
</TABLE>
<PAGE>
EXHIBIT B
ONE LINE SUMMARIES
AS OF 7 / 1996
<TABLE>
<CAPTION>
10.0% DISC
GROSS OIL GROSS GAS NET OIL NET GAS NET REVENUE TOT EXPENSE CAPITAL CASH FLOW CASH FLOW
FILE TITLE MBBL----------- MMCF------- MBBL--------MMCF------- M$--------- M$---------- M$------- M$-------- M$ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1137502 GRABS B - GRABS B #1
3.342 26.465 0.761 6.029 23.649 15.671 0.000 7.978 6.974
1145500 KREHBIEL MTM - KREHBIEL #1
12.703 93.416 1.290 9.488 46.202 31.587 0.000 14.615 9.581
1107150 LOWE/HORN - LOWE 1,2,3
244.650 71.253 4.148 1.208 84.658 27.511 0.000 57.147 39.351
1145501 McKENNA - McKENNA #1
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
1193500 PAULSEN - PAULSEN #1-25
0.000 161.527 0.000 12.820 23.717 16.882 0.000 6.836 5.528
1137503 SANDERS - SANDERS #1
14.404 176.392 2.954 36.174 133.500 84.349 0.000 49.150 32.959
1137510 SANDERS A - SANDERS 4A
3.313 339.276 0.325 33.299 101.198 33.383 0.000 67.815 20.426
1137515 SANDERS A - SANDERS 1A, 2A
10.648 203.938 1.856 35.550 121.543 55.050 0.000 66.493 35.781
SPIVEY SPIVEY NGL PLANT - SPIVEY NGL PLANT
464.710 3396.241 464.710 3396.241 18148.541 6608.182 0.000 11540.359 5380.478
1065500 TAYLOR B - TAYLOR B #1-12
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
1137505 WARREN B - WARREN B #1
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
1171502 WILLINGER - WILLINGER 1-19
0.000 207.339 0.000 16.456 30.444 21.624 0.000 8.820 7.053
1137504 WOLSEHLEGAL - WOLSEHLEGAL #1
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
1137506 YATES - YATES #2,3
17.503 225.042 3.590 46.151 167.319 79.013 0.000 88.306 51.233
1137180 FLEMING FARMOUT #1 (ORI) - FLEMING #1
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
1137181 FLEMING FARMOUT #2 (ORI) - FLEMING #2
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
1137508 SANDERS A (ORI) - SANDERS 4A
0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
1007500 WALBAUM (ORRI) - MARY DELANA #1
1.751 643.318 0.007 3.058 3.753 0.346 0.000 3.407 1.911
TOTAL 1307.196 12748.723 680.696 6348.960 28139.891 11569.697 0.000 16570.193 8212.853
</TABLE>
<PAGE>
ECON QUICK DATA REPORT
<TABLE>
<CAPTION>
OIL GAS OIL GAS
OIL GAS PRICE PRICE RATE RATE OIL GAS INIT OIL GAS PROJ. END DISC OP CST TOT.
PRICE PRICE ESC ESC BBL/M MCF/M DEC DEC W.I. REV INT REV INT START MTH RATE $/W/M CAPITAL
$/B--- $/M--- %---- %----- B/M------ M/M------ %----- %----- %------- %------- %------- ------ --- %--- ------ M$-----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1145193 1 CAMPBELL
21.15 1.32 0.00 0.00 0.00 0.00 0.00 0.00 70.2500 46.4687 46.4687 7/96 12 10.0 0 0.0
1137191 1 COX 1-9
21.15 1.60 0.00 1.00 105.00 5500.00 6.00 8.00 12.0625 9.3828 9.3828 7/96 12 10.0 800 0.0
1137150 1 CRITSER A CRITSER 1A
21.15 2.35 0.00 1.00 47.00 1800.00 2.60 4.00 29.7750 24.4247 24.4247 7/96 12 10.0 803 0.0
1131751 1 CRITSER B CRITSER 1B
21.15 2.39 0.00 1.00 87.65 183.10 8.00 10.00 17.6506 14.1205 14.1205 7/96 12 10.0 1125 0.0
1137152 1 CRITSER C CRITSER C #1,#2
21.15 2.39 0.00 1.00 225.00 327.31 12.15 6.00 20.2750 16.2088 16.2088 7/96 12 10.0 0 0.0
1145150 1 CRUMLEY CRUMLEY #1,3,4
21.15 1.90 0.00 0.00 228.41 729.43 8.00 6.00 46.8750 38.4522 38.4522 7/96 12 10.0 0 0.0
1137153 1 CULVER CULVER #1,2SWD,3,4
21.15 1.35 0.00 0.00 290.00 4225.76 6.00 2.00 93.8750 77.0068 77.0068 7/96 12 10.0 0 0.0
1137154 1 DARNES RANCH DARNES RANCH #1,2,3,4 SWD,5
21.15 1.71 0.00 1.00 310.00 1500.00 3.00 6.00 46.8750 41.0156 41.0156 7/96 12 10.0 0 0.0
1145151 1 DEE DEE #1
21.15 2.34 0.00 0.00 0.00 360.85 0.00 19.71 67.7500 55.3906 55.3906 7/96 12 10.0 450 0.0
1137156 1 DOMBAUGH DOMBAUGH 1-21
21.15 1.80 0.00 1.00 185.64 850.00 19.75 5.00 19.8750 15.2975 15.2975 7/96 12 10.0 1150 0.0
1137157 1 DRESSER A DRESSER 1A
21.15 2.40 0.00 1.00 115.00 2000.00 4.00 5.00 32.7500 28.6563 28.6563 7/96 12 10.0 1150 0.0
1137158 1 DRESSER B DRESSER 1 B
21.15 2.40 0.00 1.00 200.00 850.00 10.66 23.49 21.6875 17.3500 17.3500 7/96 12 10.0 1500 0.0
1137159 1 DRESSER C DRESSER 1C
21.15 2.69 0.00 1.00 22.99 249.26 4.00 5.00 20.9063 16.7250 16.7250 7/96 12 10.0 905 0.0
1145163 1 ELLIOTT ELLIOTT
21.15 1.99 0.00 0.00 15.00 642.82 8.00 8.00 71.8750 52.3828 52.3828 7/96 12 10.0 800 0.0
1137161 1 FLEMING B FLEMING 1B
21.15 1.36 0.00 1.00 140.00 1066.08 5.26 5.00 14.9917 11.9934 11.9934 7/96 12 10.0 1500 0.0
1145152 1 HARTMAN HARTMAN #1
21.15 1.40 0.00 0.00 0.00 325.91 0.00 8.65 46.8750 37.1704 37.1704 7/96 12 10.0 694 0.0
1137163 1 HOSTETLER HOSTETLER #2
21.15 0.00 0.00 1.00 111.59 1891.00 3.00 0.00 67.7500 59.2812 59.2812 7/96 12 10.0 1000 0.0
1137160 1 JAMES FLEMING FLEMING A #1
21.15 1.35 0.00 1.00 90.00 1100.00 2.06 5.00 29.7750 26.0531 26.0531 7/96 12 10.0 1000 0.0
1145155 1 KYLE A KYLE 1A
21.15 1.93 0.00 0.00 25.00 370.00 9.24 5.50 49.5625 39.6500 39.6500 7/96 12 10.0 0 0.0
1145156 1 KYLE HC KYLE HC #2,3
21.15 1.93 0.00 0.00 135.73 3250.00 5.00 5.00 49.5625 39.6500 39.6500 7/96 12 10.0 0 0.0
1184150 1 MCMILLAN MCMILLAN #3
21.15 0.00 0.00 1.00 140.00 0.00 6.10 0.00 17.2917 14.0729 14.0729 7/96 12 10.0 881 0.0
1145157 1 MESSENGER MESSENGER 1
21.15 2.40 0.00 1.00 0.00 700.00 0.00 6.00 81.2500 66.6504 66.6504 7/96 12 10.0 600 0.0
1137185 1 MUIR A MUIR #1A
21.15 2.40 0.00 1.00 140.19 2942.18 23.09 29.92 75.8750 60.7000 60.7000 7/96 12 10.0 2000 107.7
1137166 1 MUIR AB MUIR AB#1
21.15 1.21 0.00 1.00 63.47 350.00 6.00 20.00 49.0000 38.1875 38.1875 7/96 12 10.0 0 0.0
1137167 1 MUIR B MUIR #1B,2B
21.15 2.40 0.00 1.00 300.00 2000.00 8.17 13.15 25.3125 20.2500 20.2500 7/96 12 10.0 0 0.0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ECON QUICK DATA REPORT
OIL GAS OIL GAS
OIL GAS PRICE PRICE RATE RATE OIL GAS INIT OIL GAS PROJ. END DISC OP CST TOT.
PRICE PRICE ESC ESC BBL/M MCF/M DEC DEC W.I. REV INT REV INT START MTH RATE $/W/M CAPITAL
$/B--- $/M--- %---- %---- B/M--- M/M--- %--- %--- %---- %------- %------ ----- --- %---- ----- M$-----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1137168 1 NEWBERRY 1,2,&3
21.15 2.35 0.00 1.00 141.47 3200.00 6.00 4.57 46.7496 38.3501 38.3501 7/96 12 10.00 0 0.0
1137184 1 RAIDA RAIDA #1
21.15 1.82 0.00 0.00 14.00 535.81 4.00 3.42 62.5000 51.0254 51.0254 7/96 12 10.00 600 0.0
1145194 1 ROHLMAN #1 & #2
21.15 1.30 0.00 0.00 0.00 0.00 0.00 0.00 70.2500 46.4687 46.4687 7/96 12 10.00 0 0.0
1137170 1 SANDERS SANDERS #1-19, 2-19
21.15 1.96 0.00 1.00 140.00 1900.00 11.12 7.00 35.5000 28.4000 28.4000 7/96 12 10.00 0 0.0
1145176 1 SCHWARZT 1-11
21.15 1.59 0.00 1.00 26.15 9000.00 36.49 6.00 13.0625 10.2578 10.2578 7/96 12 10.00 800 0.0
1137171 1 STEPHENS STEPHENS #1,2,3
21.15 1.32 0.00 1.00 212.77 4669.97 4.00 3.50 97.0000 79.5703 79.5703 7/96 12 10.00 0 0.0
1137172 1 STEPHENS A STEPHENS 1A
21.15 2.40 0.00 1.00 95.00 704.65 5.10 3.00 67.1500 58.7562 58.7562 7/96 12 10.00 933 0.0
1137173 1 STEPHENS B STEPHENS 1B
21.15 2.40 0.00 1.00 342.90 614.77 2.50 3.00 27.6563 22.1250 22.1250 7/96 12 10.00 1500 0.0
1145458 1 SWINGLE SWINGLE 1-14
21.15 2.38 0.00 1.00 0.00 1352.46 0.00 20.00 50.0000 43.2500 43.2500 7/96 12 10.00 600 0.0
1137174 1 VALDIOS A VALDIOS A#1
21.15 2.40 0.00 1.00 64.79 265.79 4.00 5.00 67.1500 58.7562 58.7562 7/96 12 10.00 904 0.0
1137175 1 VALDOIS B VALDOIS B#1,2
21.15 2.39 0.00 1.00 227.82 609.93 8.11 15.05 32.1250 25.7000 25.7000 7/96 12 10.00 0 0.0
1137102 1 WARREN A WARREN 1A
21.15 1.40 0.00 1.00 80.00 993.21 5.00 8.00 29.7500 26.0312 26.0312 7/96 12 10.00 1000 0.0
1137177 1 WILEY WILEY #2A-29
21.15 1.94 0.00 1.00 210.00 510.00 18.38 24.39 68.3125 54.6500 54.6500 7/96 12 10.00 1200 0.0
1137178 2 WILLIAMS WILLIAMS A #1
21.15 2.41 0.00 1.00 37.92 305.16 5.00 7.70 67.1500 58.7562 58.7562 7/96 12 10.00 1100 0.0
1145161 1 WINGATE WINGATE #1,#2
21.15 1.94 0.00 1.00 102.59 3395.89 23.84 10.00 75.8750 60.7000 60.7000 7/96 12 10.00 0 0.0
1137179 1 YODER A YODER A #1
21.15 2.40 0.00 1.00 33.21 503.63 8.27 4.00 25.0000 20.0000 20.0000 7/96 12 10.00 1400 0.0
1137500 2 DARNES (JODY) DARNES #1, #2, B#1
20.00 1.36 0.00 1.00 139.59 1722.58 18.35 9.00 25.0000 21.8750 21.8750 7/96 12 10.00 0 0.0
1137502 2 GRABS B GRABS B #1
20.00 1.37 0.00 1.00 124.09 681.99 15.00 16.59 23.1438 22.7821 22.7821 7/96 12 10.00 0 0.0
1145500 2 KREHBIEL MTM KREHBIEL #1
20.00 2.00 0.00 1.00 90.61 981.85 4.00 10.88 12.4999 10.1563 10.1563 7/96 12 10.00 0 0.0
1107150 2 LOWE/HORN LOWE 1,2,3
20.00 1.33 0.00 1.00 3593.00 889.00 12.00 10.00 2.0000 1.6953 1.6953 7/96 12 10.00 0 0.0
1145501 2 McKENNA McKENNA #1
20.00 1.65 0.00 0.00 167.00 1163.00 0.00 0.00 0.0000 0.0000 0.0000 7/96 12 10.00 800 0.0
1193500 2 PAULSEN PAULSEN #1-25
20.00 1.85 0.00 0.00 0.00 2300.00 0.00 16.15 9.5626 7.9369 7.9369 7/96 12 10.00 1400 0.0
1137503 2 SANDERS SANDERS #1
20.00 1.90 0.00 1.00 141.72 1595.76 20.42 16.97 23.4375 20.5078 20.5078 7/96 12 10.00 0 0.0
1137510 2 SANDERS A SANDERS 4A
20.00 2.40 0.00 1.00 35.00 1150.00 8.00 3.50 12.5000 9.8147 9.8147 7/96 12 10.00 0 0.0
1137515 2 SANDERS A SANDERS 1A,2A
20.00 2.17 0.00 1.00 95.73 1158.89 11.69 4.00 23.4375 17.4316 17.4316 7/96 12 10.00 0 0.0
</TABLE>
<PAGE>
ECON QUICK DATA REPORT
<TABLE>
<CAPTION>
DATE: 02-01-1997
TIME: 11:45:29
OIL GAS OIL GAS
OIL GAS PRICE PRICE RATE RATE OIL GAS INIT OIL GAS PROJ. END DISC OP CST TOT.
PRICE PRICE ESC ESC BBL/M MCF/M DEC DEC W.I. REV INT REV INT START MTH RATE $/W/M CAPITAL
$/B-- $/M-- %--- %--- B/M---- M/M--- %---- %--- %---- %------ %------ ----- --- %--- ----- M$----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SPIVEY 2 SPIVEY NGL PLANT SPIVEY NGL PLANT
16.10 2.86 O.00 1.00 2600.00 17201.03 2.00 2.00 ++ ++ ++ 7/96 12 10.0 0 0.0
1065500 2 TAYLOR B TAYLOR B #1-12
20.00 1.20 0.00 0.00 0.00 0.00 0.00 0.00 2.8125 2.2500 2.1094 7/96 12 10.0 1000 0.0
1137505 2 WARREN B WARREN B #1
20.00 1.27 0.00 1.00 159.51 780.00 5.77 6.00 0.0000 0.0000 0.0000 7/96 12 10.0 0 0.0
1171502 2 WILLINGER WILLINNGER 1-19
20.00 1.85 0.00 0.00 0.00 2800.00 0.00 8.00 9.5620 7.9369 7.9369 7/96 12 10.0 2000 0.0
1137504 2 WOLSEHLEGAL WOLSCHLEGAL #1
20.00 1.81 0.00 0.00 100.12 1100.00 12.00 8.00 0.0000 0.0000 0.0000 7/96 12 10.0 0 0.0
1137506 2 YATES YATES #2.3
20.00 1.92 0.00 1.00 180.59 2700.00 16.86 18.58 23.4375 20.5078 20.5078 7/96 12 10.0 0 0.0
1137180 20 FLEMING FARMOUT #1 (ORI) FLEMING #1 ORI
20.00 1.35 0.00 1.00 158.26 675.00 8.00 12.00 0.0000 0.0000 0.0000 7/96 12 10.0 0 0.0
1137181 20 FLEMING FARMOUT #2 (ORI) FLEMING #2 ORI
20.00 1.35 0.00 1.00 150.00 1273.82 12.00 12.00 0.0000 0.0000 0.0000 7/96 12 10.0 0 0.0
1137508 20 SANDERS A(ORI) SANDERS 4A ORI
20.00 2.27 0.00 1.00 0.00 1474.00 0.00 0.00 0.0000 0.0000 0.0000 7/96 12 10.0 0 0.0
1007500 20 WALBALM (ORRI) MARY DELANA #1 ORI
20.00 1.18 0.00 0.00 32.42 8835.56 25.10 20.34 0.0000 0.4120 0.4754 7/96 12 10.0 0 0.0
</TABLE>
++ ownership in the Spivey Gas Plant adjusts annually based upon the contract
dated October 1, 1955.
<PAGE>
EXHIBIT C
BISON ENERGY CORP. - MIDDLE BAY OIL COMPANY, INC.
COMPUTATION OF CASH CONSIDERATION
EFFECTIVE DATE OF 2/01/97
<TABLE>
<S> <C>
Oil & Gas Properties $5,900,000
Plus (minus) other Bison Energy assets & liabilities
Cash 1,142,000
Accounts Receivable 416,000
Prepaids 15,000
Accounts Payable (520,000)
Income Tax Payable (120,000)
Notes Receivable 455,000
Other Investments 110,500
Building F&F and other 911,000
Interest one month at 8% on $6,933,000 46,000
----------
TOTAL $8,355,500
==========
</TABLE>
Undertaking to adjust cash consideration:
Bison and Middle Bay undertake to adjust at closing, but no later then 90 days
after closing, consideration payable by Middle Bay to conform with actual
amounts, if different from those shown on this Exhibit C, when Bison's balance
sheet as of February 1, 1997 is prepared in final form.
<PAGE>
EXHIBIT C
BISON ENERGY CORP. - MIDDLE BAY OIL COMPANY, INC.
COMPUTATION OF CASH CONSIDERATION
EFFECTIVE DATE OF 2/01/97
<TABLE>
<S> <C>
Notes Receivable:
CJ Lett III $ 500
Clinton Enterprises, LLC 67,000
Bison NGL, Inc. 5,000
Dean Pattisson 20,000
Whitsunday, LLC 360,000
Roger Hardesty 2,500
--------
$455,000
========
Other Investments:
Wichita Country Club $ 10,500
Mid America Bottle Exchange 100,000
--------
$110,500
========
Building F&F & other
Wichita Office Building & land $571,000
Wichita furniture, fixtures and computer system 50,000
1995 Suburban 17,500
1995 Tahoe 17,500
320SD Mercedes 3,000
1992 Pontiac Bonneville 4,000
House and boat at Beaver Lake 125,000
House at Roaring Fork Colorado 37,000
House in Colorado 86,000
--------
$911,000
========
</TABLE>
<PAGE>
EXHIBIT D
BISON ENERGY CORP. & SUBSIDIARIES
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
BISON
BISON ENERGY PRODUCTION COMBINED
CORP. COMPANY BALANCE
12/31/96 12/31/96 ELIMINATION 12/31/96
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Current assets:
Cash & marketable securities $ 342,186 $ 473,722 $ 815,908
Accounts receivable 333,344 357,814 (304,416) 386,742
Other investments 154,920 0 154,920
Prepaid expenses 14,479 0 14,479
Warehouse stock 0 187,431 187,431
---------- ---------- ----------
Total current assets 844,929 1,018,967 1,559,480
Property and equipment:
Producing leaseholds and equipment 990,470 0 990,470
Other equipment 1,349,057 107,614 1,456,671
---------- ---------- ----------
2,339,527 107,614 2,447,141
Less accumulated depreciation and depletion 1,057,827 51,946 1,109,773
---------- ---------- ----------
1,281,700 55,668 1,337,368
Investments in affiliates 924,746 0 (394,312) 530,434
Other assets 561,112 0 561,112
---------- ---------- ----------
$3,612,487 $1,074,635 $3,988,394
========== ========== ==========
Current liabilities:
Accounts payable $ 141,377 $ 680,323 304,416 $ 517,284
Accrued expenses 0 0 0
Current portion notes payable 0 0 0
Income taxes payable 117,111 0 117,111
---------- ---------- ----------
Total current liabilities 258,488 680,323 634,395
Stockholder's equity:
Common stock 500 645,902 645,902 500
Retained earnings 3,353,499 (251,590) (251,590) 3,353,499
---------- ---------- ----------
Total Stockholder's equity 3,353,999 394,312 3,353,999
---------- ---------- ---------- ----------
$3,612,487 $1,074,635 $0 $3,988,394
========== ========== =========== ==========
</TABLE>
<PAGE>
BISON ENERGY CORP. & SUBSIDIARIES
PROFIT & LOSS STATEMENT
(UNAUDITED)
<TABLE>
<CAPTION>
BISON
BISON ENERGY PRODUCTION
CORP. COMPANY COMBINED
9 MONTHS ENDED 9 MONTHS ENDED BALANCE
12/31/96 12/31/96 ELIMINATION 12/31/96
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Oil and gas sales $1,660,753 $ 0 $1,660,753
Marketing & tax expense 9,399 0 9,399
---------- --------- ----------
Net sales 1,651,354 0 1,651,354
Operating expense 641,338 0 641,338
---------- --------- ----------
1,010,016 0 1,010,016
Intangible drilling costs 11,013 0 11,013
---------- --------- ----------
999,003 0 999,003
Other income:
Exploration income 0 110,134 110,134
Overhead income 326,000 308,738 (210,000) 424,738
Gain on sale of assets 38,241 0 38,241
Other 29,545 42,732 72,277
---------- --------- ----------
393,786 461,604 645,390
Other expense:
Administration department 639,707 233,757 210,000 663,464
Production department 73,002 25,049 98,051
Interest expense 0 0 0
Depreciation & depletion 90,000 8,100 98,100
Other 1,424 0 1,424
---------- --------- ----------
804,133 266,906 861,039
Operating profit 588,656 194,698 783,354
Equity in Profit of Affiliates 194,698 0 (194,698) 0
---------- --------- ----------
Pretax profit 783,354 194,698 783,354
Provision for income taxes 157,505 0 157,505
---------- --------- --------- ----------
After tax profit $ 625,849 $ 194,698 $(194,698) $ 625,849
========== ========= ========= ==========
</TABLE>
<PAGE>
BISON ENERGY CORP. & SUBSIDIARIES
CASH FLOW STATEMENT
(UNAUDITED)
<TABLE>
<CAPTION>
BISON
BISON ENERGY PRODUCTION
CORP. COMPANY COMBINED
9 MONTHS ENDED 9 MONTHS ENDED BALANCE
12/31/96 12/31/96 ELIMINATION 12/31/96
-------- -------- ----------- --------
<S> <C> <C> <C> <C>
Cash provided by operations:
After tax profit $ 625,849 $194,698 (194,698) $ 625,849
Items included in after tax profit
which do not affect cash:
Depreciation & depletion 90,000 8,100 98,100
Affiliates distributions
in excess of earnings (361,229) 0 194,698 (166,531)
Gain on sale of assets (44,025) 0 (44,025)
--------- -------- ---------
310,595 202,798 513,393
Changes in working capital:
Accounts receivable (81,306) (91,039) (172,345)
Warehouse stock 0 (13,456) (13,456)
Prepaid expenses (7,094) 0 (7,094)
Other investments (154,920) (154,920)
Accounts payable 6,607 (68,226) (61,619)
Accrued expenses 162 13,276 13,438
Income taxes payable 108,220 0 108,220
--------- -------- ---------
(128,331) (159,445) (287,776)
Cash used for investment activities:
Change in property & equipment (215,436) 4,287 (211,149)
Change in other assets (173,022) 0 (173,022)
--------- -------- ---------
(388,458) 4,287 (384,171)
--------- -------- ---------
Cash generated before financing (206,194) 47,640 (158,554)
Cash used for financing activities:
Change in debt 0 0 0
Dividends 0 0 0 0
--------- -------- ---------
0 0 0
--------- -------- --------- ---------
Change in cash and temporary cash
investments $(206,194) $ 47,640 $ 0 $ (158,554)
========= ======== ========= ==========
</TABLE>
<PAGE>
EXHIBIT E
Inventory:
A detailed inventory of parts and oil field equipment located at the Bison
yards is maintained on file at the Corporate office.
<PAGE>
EXHIBIT F
CUSHING, OKLAHOMA PROPERTY DESCRIPTION
Cushing Land. - A track of land in the NW/4, SW/4 of Section 35, Twp 18N, Rge
5E of the I.M., Payne County, Oklahoma, more particularly described as
beginning at a point 19 feet North of the SW/corner of said NW/4 SW/4 of
Section 35; thence North 311 feet along the west line of Section 35; thence
East 660 feet; thence South 330 feet to the south line of said NW/4 SW/4 of
Section 35; thence West along said south line 575 feet; thence North 19 feet
parallel to the west line; thence West 85 feet to the point of beginning, 4.96
acres more or less. Tract subject to R/W and easement records.
Office Building - Prefabricated Armco steel building, 50' x 82'8", 4135 sq.
feet, carpeted, central heat/air, security lighting, hard surface parking lot
with concrete walkways. Constructed 1981.
Yard Building - 40' x 90', 3600 square feet, prefabricated Stran building with
two bay workshop, large office with heat/air, storage and restroom facilities.
Constructed in 1983.
Cushing Equipment Yard - 6' chain link fence, pipe racks, security lighting.
ATTICA, KANSAS PROPERTY DESCRIPTION
Attica Yard - Blocks 1,2,3 and 4 in Walkers Addition to Attica, Kansas, and
Lots 3,4,5,6 and fractional Lot 7, in Block 6 in Original Town of Attica,
Kansas, in the Southeast Quarter (SE/4) of Section 19, Twp 32S, Rge 8 W, Harper
County Kansas. 7 foot chain link fence, pipe racks, security lighting.
Attica Yard Building - Metal Quncit Hut, 1 bay door, office and shop areas.
<PAGE>
SCHEDULE 9.8 LITIGATION
Stroemel Lease: Forcing implied covenant to further develop against current
operator to obtain drilling location, in Barber County, Kansas.
Harrison-Hibbs Lease: Partition action to acquire royalty on prospect, in
Kingman County, Kansas.
Meyer Well: Case remanded to the Oklahoma Corporation Commission to determine
cost to be paid by N.P.C. Corporation for reworking new zone.
Newell Well: Co-Energy operating trying to take operations over on well.
<PAGE>
Schedule 9.9
Bison Energy Corp.
Employee Benefit Plans
1) Bison Energy Corporation has a 401 (k) Plan. A copy of the plan is
maintained at the corporate headquarters.
2) Bison Energy Corporation has a Flexible Benefit Plan with Colonial Life and
Insurance Company. Plan has been renewed for the period June 1, 1996 through
May 31, 1997. A copy of the plan is maintained at the corporate headquarters.
<PAGE>
SCHEDULE 9.10 ENVIRONMENTAL MATTERS
Bison has received notification of possible violation concerning the proper
tank netting to protect migratory birds. Bison facilities are currently being
updated to comply with the regulation.
Spivey Gas Plant Issues:
1. Mercury contamination was detected at gas meters located at the
gas plant wells. Remediation was performed by outside contractors.
2. Asbestos and other hazardous materials are located at the Spivey
Gas Plant.
KCC has made inquiry concerning possible ground water contamination
caused by oil and gas operations in the area of the Warren, Fleming and
surrounding leases in Harper County, Kansas.
<PAGE>
SCHEDULE 11.10
Mr. Lett currently has working interest and overriding royalty interest in non
producing and producing oil and gas leases in several related entities and will
have additional oil and gas production interest as contemplated by this
agreement. In addition it is expected by March 31, 1997, the Prothe leases,
Griem leases and the Culver 5-9 lease will be drilled. Entities related to Mr.
Lett will own the interest in the leases to be drilled.
Mr. Lett has interest in companies that service the oil and gas business.
These businesses involve well servicing, chemical, fracturing, acidizing,
stimulation, workovers and completion services.
