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 December 17, 1996, Middle Bay Oil Company, Inc. (the "Registrant" or
"Middle Bay") entered into an Agreement and Plan of Merger with NPC Energy
Corporation ("NPC") whereby NPC will be merged with and into Middle Bay in
exchange for Middle Bay common stock and cash.
NPC is a privately-owned domestic exploration and production company with
assets located in Kansas, Michigan, Oklahoma, Texas and Wyoming. Pursuant to
the Agreement and Plan of Merger, Middle Bay will issue 562,000 shares of its
common stock and $1,226,400 in cash to NPC in exchange for the stock of NPC.
NPC's value was determined by estimating the discounted reserve value of its
properties (as determined by independent engineering data) and through
negotiation. The cash portion of the consideration for the merger was
financed through the issuance of 166,667 shares of Series A Preferred Stock to
Kaiser-Francis Oil Company ("Kaiser-Francis") for $1,000,002 ($6.00 per
preferred share) and cash on hand. The preferred shares were 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 NPC merger is expected to add an estimated 469,000 barrels of oil and
3.6 billion cubic feet of natural gas to Middle Bay's reserves. The proved
reserve value (PV10%) is estimated to be $4,500,000.
The transaction will be submitted to NPC's shareholders and is expected
to be approved by December 31, 1996. NPC's principal shareholder, who owns
approximately 56% of NPC's outstanding shares and is a party to the Agreement
and Plan of Merger, has commited to vote his shares in favor of the
transaction.
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 17, 1996 between the
Registrant and NPC Energy Corporation.
<PAGE>
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: December 30, 1996
MIDDLE BAY OIL COMPANY, INC.
By: /s/ Frank C. Turner, II
--------------------------------
Signature
Vice President
--------------------------------
Title
Frank C. Turner, II
--------------------------------
Name
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
Between
MIDDLE BAY OIL COMPANY, INC.
And
NPC ENERGY CORP.
THIS AGREEMENT AND PLAN OF MERGER (hereinafter referred to as the
"Agreement") is made and entered into this 17th day of December, 1996,
by and among MIDDLE BAY OIL COMPANY, INC., an Alabama corporation
(hereinafter referred to as "Middle Bay"); NPC ENERGY CORP., an Oklahoma
corporation (sometimes referred to herein as "NPC"); and BISON ENERGY
CORPORATION, a Kansas corporation (hereinafter referred to as "Bison")
(Middle Bay and NPC being sometimes referred to together herein as the
"Constituent Corporations").
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 1,318,917
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, none of
which is issued. 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. NPC is authorized to issue 20,000,000 shares of common stock, $.01
par value (hereinafter referred to as "NPC Common Stock"), of which 800,000
shares are issued and outstanding as of the date of this Agreement. NPC is
also authorized to issue 1,000,000 shares of preferred stock, none of which is
issued.
D. NPC desires to be merged with and into Middle Bay (contingent upon
approval by NPC's shareholders in accordance with applicable provisions of
this Agreement), and Middle Bay desires to have NPC merge into Middle Bay, in
accordance with the terms and subject to the conditions set forth in this
Agreement.
E. The oil and gas assets of NPC 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 NPC, includes within its meaning, collectively,
all of NPC'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 NPC.
F. NPC has employed Ryder Scott Company, Petroleum Engineers ("Ryder
Scott"), to determine the undiscounted reserve values and the discounted
present values of reserves, of the Properties. Such values, as determined by
Ryder Scott, are set forth in Exhibit "B" attached hereto.
G. Bison is the beneficial owner of 449,600 shares of the issued and
outstanding NPC Common Stock, constituting 56.2% of all issued and outstanding
capital stock of NPC. Bison, NPC and Bison Energy Partners, Inc. (the
"General Partners") are the general partners of ten limited partnerships (the
"Partnership Shareholders") set forth on Exhibit "C" which, along with Eugene,
Inc., constitute all the other shareholders of NPC.
H. The Boards of Directors of each of the Constituent Corporations
have determined that it is advisable and for the benefit of each of the
Constituent Corporations and their respective shareholders that NPC be merged
with and into Middle Bay on the terms and conditions hereinafter set forth
(the "Merger"), and by resolutions duly adopted have adopted the terms and
conditions of this Agreement and directed that the Merger be submitted to the
shareholders of NPC for approval in accordance with Oklahoma law.
I. The following terms are defined in the following respective
provisions of this Agreement: "Business Day," Section 13.8; "Claim Notice,"
Section 9.3; "Closing" and "Closing Date," Section 2.1; "Effective Time,"
Section 1.5; "General Partners," Paragraph G; "Merger Date," Section 1.1;
"Notice," Article XI; "Notice Period," Section 9.3, and "Surviving
Corporation," Section 1.1.
THE AGREEMENT
In consideration for the mutual agreements contained in this Agreement
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement do hereby agree
as follows:
ARTICLE I
MERGER
1.1 Merger Date. On the Merger Date, which shall be the effective
date of the Merger in accordance with applicable law, NPC shall be merged with
and into Middle Bay, and Middle Bay, shall continue in existence as the
"Surviving Corporation." The Merger shall in all respects have the effect
provided for in Section 10-2B-11.06 of the Alabama Business Corporation Act.
1.2 Separate Existence. Without limiting the foregoing, on and after
the Merger Date, the separate existence of NPC shall cease, and, in accordance
with the terms of this Agreement, the title to the Properties and the other
assets listed in the Financial Statements shall be vested in the Surviving
Corporation without reversion or impairment. The Surviving Corporation shall
assume and have all of the liabilities and obligations of NPC, and any pending
proceeding by or against NPC may be continued as if the merger did not occur
or the Surviving Corporation may be substituted in NPC's place.
1.3 Actions to Effectuate Merger. Prior to and from and after the
Merger Date, the Constituent Corporations shall take all such action as shall
be necessary or appropriate in order to fully and properly effectuate the
Merger.
1.4 Manner and Basis of Converting Shares of NPC into Shares of
Middle Bay. The manner and basis of converting shares of NPC into shares of
the Surviving Corporation shall be as follows:
(a) Each outstanding share of NPC Common Stock outstanding on the
Merger Date and all rights with respect thereto which are owned by the
Partnership Shareholders and Eugene, Inc. shall be exchanged for $3.50 in
cash, for an aggregate cash amount of $1,226,400.
(b) All of the NPC Common Stock outstanding on the Merger Date and
all rights with respect thereto which are owned beneficially by Bison as
listed on Exhibit "D" attached hereto shall on the Merger Date be exchanged at
a ratio of 1.00 share of NPC Common Stock for 1.25 shares of Middle Bay Common
Stock (totalling 562,000 shares of Middle Bay Common Stock) less a number of
Middle Bay Common Stock having a value (based on $3.50 per share) equal to the
cost to NPC for the legal and accounting costs and fees directly related to
the negotiation and closing of this Agreement on behalf of NPC and the
withdrawal of NPC's S-4 registration statement with the SEC.
(c) Each holder of shares of NPC Common Stock listed on Exhibit "D"
shall thereafter be entitled, upon presentation for surrender to Middle Bay or
its agent, of the certificate or certificates representing shares of fully
paid and nonassessable Middle Bay Common Stock to which such holder shall be
entitled on the aforesaid basis of conversion in exchange.
(d) Any shares of any class of NPC held in its treasury on the Merger
Date will be canceled.
1.5 Effective Time. The economic effect of the transactions
contemplated by this Agreement shall be effective 11:00 p.m., Central Standard
Time, on December 31, 1996 (herein referred to as the "Effective Time").
1.6 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.
1.7 Contingencies.
(a) The provisions of this Agreement (other than subsection 1.7(b))
are contingent, with respect to the obligations of NPC (and with respect to
the obligations of the General Partners as the general partner of the
respective Partnership Shareholders), upon consent or approval by the requisite
majority of the limited partners of the Partnership Shareholders in accordance
with applicable provisions of the respective partnership agreements and
applicable law and such other acknowledgments or releases which NPC, in its
reasonable discretion, shall seek from such limited partners in accordance
with a Notice of Merger and disclosure materials prepared by NPC, Bison and
its counsel.
(b) Bison shall give Notice to Middle Bay, on or before December 24,
1996, stating whether or not the contingency described in subsection 1.7(a),
with respect to the Partnership Shareholders, has been met.
(c) Middle Bay's obligations under this Agreement are contingent upon
consent or approval by the requisite number of limited partners of each of the
Partnership Shareholders (i) in accordance with applicable provisions of the
respective partnership agreements of the Partnership Shareholders and
applicable law; and (ii) acknowledgment and consent by such limited partners
in light of the disclosures set forth in the Notice of Merger.
(d) Bison shall utilize reasonable efforts in order to assure that
the contingencies described in this Section 1.7 are met; provided, however,
Middle Bay may waive such contingencies in order to effect a Closing on
December 31, 1996. In the event the Closing is effected and such
contingencies have not been satisfied by Bison in a manner acceptable to
Middle Bay, Middle Bay shall take no further action to effect the Merger under
the Alabama Business Corporation Act until Middle Bay, at it sole option,
determines and elects whether to rescind the Agreement by following the
procedures set forth in subsection 1.7(e).
(e) In the event Middle Bay elects to rescind the Merger subsequent
to Closing as contemplated in subsection 1.7(d), it shall notify Bison in
writing of such election no later than January 15, 1997. Upon receipt by
Bison of such rescission notice, Bison shall:
(i) notify its shareholders and the limited partners of the Partnership
Shareholders of the election by Middle Bay to rescind the Merger; and
(ii) cooperate with Middle Bay in taking such other reasonable actions,
with advice of the respective counsel for Bison and Middle Bay, to terminate
the Agreement, return to Middle Bay all cash paid and Middle Bay Common Stock
delivered by Middle Bay at Closing to NPC for distribution to its shareholders
and restore NPC as an independent corporate entity, with the same
shareholders, management and properties which existed immediately prior to the
Closing.
(f) In the event Middle Bay does not notify Bison of its election to
rescind this Agreement on or before January 15, 1997, Middle Bay and Bison
shall take such action as necessary and required to effect the Merger in
accordance with applicable law.
(g) Notwithstanding anything to the contrary set forth in this
Agreement, Bison may elect to rescind the Merger subsequent to Closing if
Bison is unable to reasonably comply with, or is unable to reasonably satisfy,
in Bison's sole determination, the contingencies set forth in this Section 1.7
on or before January 15, 1997. In the event Bison does not notify Middle Bay
of its election to rescind this Agreement on or before January 15, 1997, Bison
and Middle Bay shall take such action as necessary and required to effect the
Merger in accordance with applicable law. Bison's ability to rescind the
Merger shall not be impacted by, and may be implemented regardless of, any
decision by Middle Bay to waive any of the contingencies or requirements set
forth in Section 1.7.
ARTICLE II
CLOSING
2.1 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 NPC at least five Business Days before Closing, at Middle
Bay's offices at the address set forth in Article XI of this Agreement. The
date and time of Closing may be referred to herein as the "Closing Date." The
Closing Date shall be no later than December 31, 1996.
2.2 Actions of Middle Bay at Closing. At Closing, Middle Bay shall
deliver to NPC:
(a) the cash payable to certain shareholders of NPC in accordance
with Section 1.4(a) hereof, in cash or equivalent form of payment; and
(b) certificates representing the Middle Bay Common Stock issued for
distribution to Bison in accordance with Section 1.4(b) hereof, in appropriate
denominations in accordance with applicable provisions of this Agreement and
Exhibit "D".
2.3 Actions of NPC at Closing. At Closing, NPC shall deliver 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 each General Partner, in its
capacity as the sole general partner of the respective Partnership
Shareholders of NPC, to approve the Merger and the transactions contemplated
by this Agreement, and with respect to NPC, to execute and deliver this
Agreement, the instruments of transfer described in subsection 2.3(a), and all
of the other agreements, certificates, instruments and documents executed
pursuant to or as an incident to this Agreement or the Closing, and with
respect to the actions of the General Partners on behalf of the Partnership
Shareholders, such evidence to include, without limitation, appropriate
certificates of corporate resolution and incumbency and properly certified
copies of consent actions taken by the limited partners of the Partnership
Shareholders, copies of limited partnership certificates (certified by the
Secretary of State of the States of Minnesota and Kansas) and partnership
agreements (certified by the General Partners) of the Partnership Shareholders
and all amendments thereto, certificates of good standing issued by the
Secretaries of State of the States of Minnesota and Kansas with respect to the
Partnership Shareholders and Bison, and opinions of the counsel for NPC and
Bison regarding the foregoing matters; and
(c) all operational records with respect to the Properties.
2.4 Right as Operator. NPC and Middle Bay hereby agree that Bison
Production Company or its assignee will retain, and to the extent necessary be
granted, irrevocable operational authority, with the exception of gross
negligence, C. J. Lett, III ("Lett") or affiliated entity is not the majority
owner of Bison, and those Properties listed on Exhibit "I," for all of the
Properties for which Bison Production Company or its affiliated assignee is
the operator as of the date of this Agreement. Bison Production Company or
its affiliated assignee will continue receiving operating and overhead fees
and cost reimbursements at the historical operation rates for such
Properties.
ARTICLE III
MATTERS RELATIVE TO MIDDLE BAY SHARES
3.1 Securities Laws Compliance by Middle Bay and NPC.
(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 NPC and Bison full access to all such reports and
other information reasonably requested by NPC or Bison regarding Middle Bay to
enable NPC and Bison to make an informed decision regarding the value of the
Shares.
(b) Disclosure to and Solicitation of Approval of Limited Partners of
the Partnership Shareholders. As soon as practicable after execution of this
Agreement by all parties, NPC and Bison shall prepare a Notice of Merger and
disclosure documents for the purpose of soliciting consents and releases. On
or before December 23, 1996, NPC and Bison shall deliver to the limited
partners of the Partnership Shareholders such Notice of Merger and the
disclosure documents, including consent solicitation statements or other
appropriate forms for use in connection with obtaining such consents or
approvals (in such reasonable form deemed appropriate by NPC and Bison) by the
limited partners of the Partnership Shareholders.
(c) Securities Laws Compliance. Middle Bay, NPC and Bison shall use
their reasonable efforts to assure that the issuance of the Middle Bay Shares
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 Shares as contemplated hereunder.
3.2 Transfer Restrictions. Bison agrees that transfer of the Middle
Bay Shares issuable to NPC and distributed to Bison 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 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 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.
3.3 Registration Rights. Bison shall have the following rights with
respect to registration of the Middle Bay Shares 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 Bison in each case of such determination at
least thirty (30) days prior to filing the registration statement and, upon
the receipt of Bison's written request given within fifteen (15) days after
Bison'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 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 Bison in writing that,
in its opinion, the inclusion of Bison's Middle Bay Common Stock requested to
be included in such registration would materially adversely affect the
distribution of all such common stock, then (i) if such advice is given within
five (5) days of Bison's request, Bison shall not be permitted to register its
Middle Bay Common Stock as specified in such request and (ii) if such advice
is given at any time thereafter, both Middle Bay and Bison 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 Bison and the Company
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 Bison and Middle Bay.
(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 Bison 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 Bison), it will notify Bison in each case of such
determination at least thirty (30) days prior to filing the registration
statement and, upon the receipt of Bison's written request given within
fifteen (15) days after Bison'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 Bison'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 Bison will be eligible to sell the
Middle Bay Common Stock pursuant to the terms of Rule 144(k) as promulgated
under the 1933 Act. Bison's rights under this Section 3.3(b) are limited to
one effective registration of Bison's Middle Bay Common Stock.
(c) Expenses. Middle Bay shall pay all expenses incurred in
connection with any registration pursuant to this Section 3.2, except that
Bison shall pay for (I) any broker or underwriting commissions or discounts
relating to Middle Bay Common Stock sold by Bison, and (ii) fees of counsel to
Bison engaged separately from counsel to Middle Bay in connection with such
registration.
3.4 Restrictions on Voting Rights. Bison agrees that for a period of
three years following the Closing Date, voting rights with respect to the
shares of Middle Bay Common Stock issuable to Bison hereunder (or otherwise
acquired by Bison) 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, Bison shall vote only that number of shares of Middle Bay Common
Stock, regardless of any greater number of such shares owned by Bison, 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 Bison 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.
(c) For purposes of this Section 3.3, the number of shares of Middle
Bay Common Stock owned by Bison shall include any shares of Middle Bay Common
Stock owned or hereafter issued to any control person or affiliate of Bison.
ARTICLE IV
MIDDLE BAY'S REPRESENTATIONS AND WARRANTIES
Middle Bay represents and warrants to NPC and Bison that:
4.1 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.
4.2 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.
4.3 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 NPC or
Bison regarding the income tax consequences of the Merger or other
transactions contemplated by this Agreement, as to Middle Bay or NPC, Middle
Bay shall rely solely upon its tax advisors with respect to such tax
consequences. Middle Bay will be responsible for all income taxes of Middle
Bay and NPC resulting from the Merger and any income tax elections made by
Middle Bay.
4.4 Status of the Middle Bay Common Stock. The Middle Bay Common
Stock to be delivered to NPC and distributed to Bison 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.
4.5 Information Relating to Middle Bay. Middle Bay has previously
provided to NPC and Bison 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 NPC (by Notice) 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.
From the date hereof through the Closing Date, Middle Bay shall provide to NPC
and Bison 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 4.5.
4.6 Operational Matters. Middle Bay is accepting all past operations
of the Properties 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.
4.7 Spivey Gas Plant. Middle Bay acknowledges that gas, condensate
and natural gas liquids produced from the Properties which enter the Spivey
Plant shall always be considered by all parties to be "non-plant owner gas" in
accordance with the Spivey Contract and applicable law and Middle Bay further
acknowledges and agrees that all rights and payments to Middle Bay for gas,
condensate and natural gas liquids sales to the Spivey Plant shall be on the
basis of the non-plant owner gas contract subject to the individual
leaseholds. Provided, however, Middle Bay will be entitled to have gas,
condensate and natural gas liquids on production obtained from the future
development of the proven undeveloped property listed on Exhibit "E" ("PUDs")
treated as "plant owner gas" in accordance with the Spivey Contract and
applicable law. Notwithstanding the foregoing, the development by Middle Bay
of the PUDs or Middle Bay's purchase of any other leaseholds, wells or
properties, which would entitle Middle Bay to ownership in the Spivey Plant,
Middle Bay agrees that such PUD development or other purchase will not entitle
or cause any of the other Properties to qualify as plant owner gas in
accordance with the Spivey Contract and applicable law at any time.
ARTICLE V
NPC'S REPRESENTATIONS AND WARRANTIES
NPC and Bison represent and warrant to Middle Bay that, to the best of
their knowledge, except as disclosed in Exhibit "F":
5.1 Due Organization; Good Standing; Power. NPC is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Oklahoma. Each of the Partnership Shareholders is a limited
partnership duly organized, validly existing and in good standing under the
laws of their respective states of formation. NPC and Bison each has all
requisite power to enter into this Agreement and to perform its obligations
hereunder. Each General Partner is the lawful and sole general partner of
each of the respective Partnership Shareholders with authority to act as
required by this Agreement.
5.2 Authorization and Validity of Documents. The execution, delivery
and performance of this Agreement by NPC and Bison, and the consummation by
NPC and Bison of the Merger and other transactions contemplated hereby, have
been duly and validly authorized by the Boards of Directors of NPC and Bison.
This Agreement has been duly executed and delivered by NPC and Bison and is a
legal, valid and binding obligation of NPC and Bison, respectively,
enforceable against NPC and Bison 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 NPC and Bison in accordance with the
provisions hereof will be, duly executed and delivered on behalf of NPC and
Bison by duly authorized officers of each corporation.
5.3 Validity of Contemplated Transactions, Etc. The execution,
delivery and performance of this Agreement by NPC and Bison 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 to which NPC or
Bison 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 NPC, Bison or any shareholder of NPC, (c) the
articles of incorporation, bylaws, limited partnership agreement or other
charter documents of, respectively, NPC, Bison or the Partnership
Shareholders, or (d) any mortgage, indenture, agreement, contract, commitment,
lease, plan, or other instrument, document or understanding, oral or written,
to which NPC or Bison is a party, by which NPC or Bison may have rights or by
which any of the Properties 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 NPC or Bison thereunder. Except
as required in regard to the Notice of Merger as contemplated by Article III
hereof or otherwise aforesaid, 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 NPC or Bison.
5.4 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 NPC or any Properties or any right or interest therein.
5.5 Title to Properties. To the best of NPC's and Bison's knowledge,
the Properties are free and clear of all mortgages, liens, pledges, security
interests, charges, claims, restrictions and other encumbrances, except for
liens for current real or personal property taxes not yet due and payable and
except for a certain term note payable to Bank of Oklahoma, N.A. and mechanics
and materialmen liens arising in the ordinary course of NPC'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 NPC nor Bison 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.
5.6 Condition of Tangible Assets. All buildings, structures,
facilities, equipment and other material items of tangible property and assets
constituting the Properties 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 NPC'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 NPC owns any equipment
or other tangible assets or properties situated on the Properties or necessary
to the operation of the business of NPC, except for leased items disclosed in
Exhibit "A" and for items of immaterial value.
5.7 Financial Statements. Attached hereto as Exhibit "G" are NPC's
balance sheet (the "Balance Sheet") and profit and loss statement as of the
close of business on October 31, 1996 (the "Financial Statements"). NPC and
Bison represent that the Financial Statements are complete, are in accordance
with the books and records of NPC and fairly present, in all material
respects, the assets, liabilities, financial condition and results of
operations of NPC indicated thereby in accordance with generally accepted
accounting principles consistently applied and there have not been any
material adverse changes in such financial condition as of the date of this
Agreement. At October 31, 1996, NPC had no material liabilities of any
nature, direct or indirect, fixed or contingent, which were not reflected on
the Financial Statements.
5.8 Litigation. Except as disclosed in Schedule "5.8" 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 NPC or Bison pending or, to the best of NPC's and Bison'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 "5.8" in respect to NPC or Bison,
there are no actions, proceedings or investigations pending (or, to NPC's or
Bison'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 NPC or Bison of the Properties.
5.9 Employees. NPC 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 NPC, threatened by any of their
officers, agents, employees of NPC, or any other third party involved in the
operations of NPC, 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 "5.9" attached hereto. NPC is, to its knowledge, in
compliance in all material respects with the requirements of the Employee
Retirement Income Security Act of 1974, as amended.
5.10 Environmental Matters. To the best of its knowledge, NPC is not
aware of, nor has NPC 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 NPC of applicable
Environmental Laws. With the exception of the foregoing representations and
warranties as to "knowledge," neither NPC nor Bison 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 NPC 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 Exhibit
"H", 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 NPC, Bison and their current, as of the Closing Date,
respective employees, officers, directors, shareholders, representatives and
agents of the Company 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 the Properties.
5.11 Completeness of Disclosure. No representation or warranty by
NPC or Bison 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 NPC 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.
5.12 Gas Imbalances. NPC has received no deficiency payments under
any gas contracts for which any party has a right to take deficiency gas, nor
has NPC received any payments for production which are subject to refund or
recoupment out of future production.
5.13 Well Status. NPC 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 capable of
producing in commercial quantities. All wells drilled, completed, operated,
plugged or abandoned by NPC on or related to the 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 NPC has not received any
notice or other indication to the contrary.
5.14 Income Tax Consequences. Any contrary provision contained in
this Agreement (or any other agreement or communication) notwithstanding,
neither NPC nor Bison 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 NPC or as to any of the
partners of the Partnership Shareholders. The parties understand that such
transaction will result in recognition of gain or loss, for federal income tax
purposes by the limited partners of the Partnership Shareholders who are
allocated portions of the cash price. NPC and Bison shall rely solely upon
its tax advisors with respect to such tax consequences.
5.15 Reserve Report. The engineering report set forth in Exhibit "B"
was prepared by Ryder Scott an independent engineering firm. NPC provided
information which NPC believes to be true and correct to Ryder Scott. The
reserves included in the Ryder Scott 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 VI
MIDDLE BAY'S COVENANTS
Middle Bay covenants and agrees that, pending the Closing and except as
otherwise agreed to in writing by NPC:
6.1 Business in the Ordinary Course. Its business shall be conducted
solely in the ordinary course consistent with past practice.
6.2 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 VI as though such
representations and warranties were made on and as of such date. Furthermore,
Middle Bay shall cooperate with NPC and 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.
6.3 Update Disclosures. Middle Bay shall promptly disclose to Bison
and NPC 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 NPC shall have consented
thereto (by Notice).
6.4 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.
6.5 Conduct as Operator of Properties. Middle Bay agrees to retain
Bison Production Company or its assignee as operator of the Properties listed
on Exhibit "I" until April 1, 1997. During such time, Bison Production
Company or its assignee will be entitled to receive an operating fee of
$10,000.00 per month (which fee includes overhead fees) until April 1,
1997. Provided, however, if Middle Bay is not given operational authority,
the $10,000.00 per month will revert to an industry standard rate for
overhead and operating fees.
6.6 Income Tax. Middle Bay agrees to be responsible for and pay all
income taxes of NPC and Middle Bay resulting from the Merger and any income
tax elections made by Middle Bay, including any liabilities or obligations
accruing to Bison as a result of such election if such election was out of the
ordinary.
ARTICLE VII
NPC'S AND BISON'S COVENANTS
NPC and Bison each respectively covenants and agrees that, pending the
Closing and except as otherwise agreed to in writing by Middle Bay:
7.1 Business in the Ordinary Course. Its business shall be conducted
solely in the ordinary course consistent with past practice.
7.2 Maintenance of Assets. NPC 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.
7.3 Maintenance of Insurance. NPC shall maintain insurance coverage
of its insurable interests with respect to the Properties at levels currently
maintained.
7.4 Compliance With Laws, Etc. NPC shall comply with all laws,
ordinances, rules, regulations and orders applicable to its business or NPC's
operations, assets or properties in respect thereof, the noncompliance with
which might materially affect its business or the Properties.
7.5 Update Disclosures. NPC and Bison, 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 NPC for
the purposes of this Agreement, unless Middle Bay shall have consented thereto
(by Notice).
7.6 Conduct of Business. NPC shall use its best efforts to conduct
its business in such a manner that, on the Closing Date, the representations
and warranties of NPC contained in this Agreement shall be true, except as
specifically contemplated by this Article VII, as though such representations
and warranties were made on and as of such date. Furthermore, NPC and Bison
shall cooperate with Middle Bay and use their best efforts to cause all of the
conditions to the obligations NPC and Bison under this Agreement to be
satisfied on or prior to the Closing Date.
7.7 Sale of Assets; Negotiations. NPC shall not, directly or
indirectly, sell or encumber all or any part of the Properties, 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.
7.8 Access. NPC 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 its Properties and the business conducted by NPC and shall permit them to
consult with the officers, employees, accountants, counsel and agents of NPC
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 NPC's business operations. Furthermore, NPC
shall furnish to Middle Bay all such documents and copies of documents and
records and information with respect to the affairs of NPC 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.
7.9 Press Releases. Neither NPC nor Bison shall communicate to third
parties or otherwise make any public statement or releases 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.
7.10 Change of Operator. At Closing and in accordance with the
applicable joint operating agreement, NPC shall recommend to any current
working interest owners that Middle Bay or its designee replace Bison
Production Company as operator of the Properties described in Exhibit "I"
attached hereto effective April 1, 1997. NPC and Bison shall also make every
reasonable effort to obtain the consent or approval of such working interest
owners to the election of Middle Bay or its designee as successor operator of
the Properties described in Exhibit "I".
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 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 NPC and Bison contained in this Agreement or
in any schedule, certificate or document delivered by NPC or Bison 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. NPC and Bison 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 NPC and Bison 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 NPC and Bison have
obtained all consents and approvals required to consummate the transactions
contemplated by this Agreement.
(d) Opinions of Counsel for NPC. Phillips McFall McCaffrey McVay &
Murrah, P.C., counsel for NPC and Bison 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) SEC Registration Statement Withdrawn. NPC shall have withdrawn
its Registration Statement on Form S-4 (No. 33-99247) which is presently
pending with the SEC; such withdrawal shall be with the consent of the SEC
staff on terms satisfactory to Middle Bay and its counsel.
(f) 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.
(g) Material Adverse Changes. The Properties and operations of NPC
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.
(h) 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. NPC
shall also have delivered to Middle Bay such other documents, instruments,
certifications and further assurances as such counsel may reasonably require.
8.2 Conditions Precedent to the Obligations of NPC. All obligations
of NPC 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 NPC 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. NPC shall have received a certificate from
Middle Bay dated the Closing Date, certifying in such detail as NPC 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 NPC a written opinion,
dated the Closing Date, reasonably satisfactory in form and substance to NPC
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.
(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 respective counsel for NPC and Bison in
the exercise of their reasonable judgment. Middle Bay shall also have
delivered to NPC and Bison such other documents, instruments, certifications
and further assurances as such counsel may reasonably require.
ARTICLE IX
INDEMNIFICATION
9.1 General Indemnification Obligation of NPC and Bison. From and
after the Closing, NPC and Bison 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:
(i) any and all actions, suits, claims or legal, administrative,
arbitration, governmental or other proceedings or investigations against
Middle Bay in connection with the issuance of NPC Common Stock to the
Partnership Shareholders in 1994; or
(ii) 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 misrepresentation, breach of warranty or non-fulfillment of
any agreement or covenant on the part of NPC or Bison under this Agreement, or
any misrepresentation in or 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 9.1.
(c) Provided, however, if Lett, or any affiliated entity of Lett,
does not own effective control of Bison during the two-year term of this
indemnity, Lett will replace Bison and indemnify Middle Bay in accordance with
this Section 9.1. Provided, further, at the time Lett personally indemnifies
Middle Bay, Bison will be released from any and all liability under this
Agreement including, without limitation, the indemnification set forth in this
Section 9.1.
9.2 General Indemnification Obligation of Middle Bay. From and after
the Closing, Middle Bay will reimburse, indemnify and hold NPC and Bison
harmless against and in respect of:
(a) any and all damages, losses, deficiencies, liabilities, costs and
expenses incurred or suffered by NPC that result from, relate to or arise out
of any misrepresentation, breach of warranty or nonfulfillment of any
agreement or covenant on the part of Middle Bay under this Agreement, or any
misrepresentation in or omission from any certificate, statement, document or
instrument furnished to NPC or Bison 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 9.2.
9.3 Method of Asserting Claims, Etc. In the event that any claim or
demand for which NPC or Bison 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 NPC and Bison 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"). NPC and Bison shall then have ten (10) days from the effective date
of the Claim Notice (the "Notice Period") to notify Middle Bay (i) whether or
not it disputes its liability to Middle Bay hereunder with respect to such
claim or demand and (ii) notwithstanding any such dispute, whether or not it
desires, at NPC's and Bison's sole cost and expense, to defend Middle Bay
against such claim or demand.
(a) If NPC or Bison disputes its liability with respect to such claim
or demand or the amount thereof (whether or not NPC or Bison desires to defend
Middle Bay against such claim or demand as provided in subsections 9.3(b) and
9.3(c) below), such dispute shall be resolved in accordance with Section 9.5.
Pending the resolution of any dispute by NPC or Bison of its 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 NPC or Bison notifies Middle Bay within the
Notice Period that it desires to defend Middle Bay against such claim or
demand, then, except as hereinafter provided, NPC or Bison shall have the
right to defend Middle Bay by appropriate proceedings, which proceedings shall
be promptly settled or prosecuted by NPC or Bison 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, neither NPC nor Bison shall, 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 NPC and Bison hereunder; provided, however, that Middle Bay shall not
settle any such claim or demand without the prior written consent (given by
Notice) of NPC, which consent shall not be unreasonably withheld. If Middle
Bay should elect to exercise such right, NPC and Bison shall have the right to
participate in, but not control, the defense or settlement of such claim or
demand, at their sole cost and expense.
(c) If NPC and Bison elect 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 NPC or Bison 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 a joint and several liability of NPC and Bison hereunder, unless
NPC or Bison shall have disputed its liability to Middle Bay hereunder, as
provided in Section 9.5 hereof.
(d) If Middle Bay should have a claim against NPC or Bison 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 NPC and Bison. If NPC or Bison disputes its liability with respect to such
claim or demand, such dispute shall be resolved in accordance with Section 9.5
hereof; if neither NPC nor Bison notifies Middle Bay within the Notice Period
that it disputes such claim, the amount of such claim shall be conclusively
deemed the undisputed liability of NPC and Bison hereunder.
(e) All claims for indemnification by NPC or Bison under this
Agreement shall be asserted and resolved under the procedures set forth above,
substituting in the appropriate place "NPC" or "Bison" for "Middle Bay" and
"Middle Bay" for "NPC" or "Bison" (and variations thereof).
9.4 Payment. Upon determination of the liability under Section 9.3
or 9.5 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.
9.5 Arbitration.
(a) All disputes under this Article IX 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 9.5. The arbitrator shall be selected by the
joint agreement of NPC and Middle Bay and, where appropriate, Bison, 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 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 9.5 shall prevent the parties from settling any
dispute by mutual agreement at any time.
9.6 Other Rights and Remedies Not Affected. The indemnification
rights of the parties under this Article IX 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.
9.7 Limitation on Indemnification by Bison. The indemnification by
Bison and if applicable, Lett, pursuant to this Section 9 shall be limited to
(i) a term of two (2) years from the Closing Date at which time Bison's, and
if applicable, Lett's, indemnity under this Section 9 will terminate and Bison
will have no further liability thereunder; and (ii) the Middle Bay Common
Stock acquired by it pursuant to the Merger and such indemnification may be
satisfied, at Bison'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 Bison'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 Bison has sold or transferred Middle Bay Common Stock and the number of
shares of Middle Bay Common Stock owned by it at the time of indemnification
is inadequate to satisfy such indemnification, then Bison shall be liable for
the remainder of such indemnification in an amount not to exceed the lesser of
(a) the consideration received by Bison 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.
9.8 Limitation on Indemnification by Middle Bay. The indemnification
by Middle Bay pursuant to this Section 9 shall be limited to a term of two (2)
years from the Closing Date.
ARTICLE X
BROKERS AND FINDERS
Middle Bay represents and warrants to NPC and Bison, and NPC and Bison
represent and warrant to Middle Bay, that no broker, finder or consultant has
been employed in connection with this transaction or has otherwise engaged in
any conduct giving rise to any right to earn any commission or finder's fee
for introducing Middle Bay and NPC and Bison to each other, for assisting
Middle Bay and NPC 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 and NPC and
Bison each agree to indemnify and hold the other harmless in accordance with
Article IX 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 XI
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
NPC: NPC Energy Corp.
Attn: C. J. Lett, III, President
9320 East Central
Wichita, KS 67206
Fax: (316) 636-1803
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
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 XII
GOVERNING LAW
This Agreement shall be governed by Alabama law.
ARTICLE XIII
MISCELLANEOUS
13.1 Entire Agreement. This Agreement contains the entire agreement
among the parties and supersedes all prior discussion and agreements.
13.2 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.
13.3 Survival. Sections 3.1, 3.2, 3.3 and 3.4, and Articles 4, 5, 9
and thereafter shall survive the Closing of the transaction contemplated
hereby for a period of two (2) years from the Closing Date. 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.
13.4 Benefit. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
assigns.
13.5 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.
13.6 Time. Time is of the essence of this Agreement.
13.7 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.
13.8 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.
13.9 No Third-Party Beneficiaries. The provisions of this Agreement
are not intended to benefit, and may not be enforced by, any person other than
Middle Bay, NPC and Bison.
13.10 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.
13.11 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.
13.12 Further Assurances. NPC and Bison agree to execute and
deliver, after the date of this Agreement and 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.
13.13 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 NPC and Middle Bay; or
(ii) by Middle Bay (A) at any time if the representations and
warranties of NPC or Bison contained in Article V were incorrect in any
material respect when made or at any time thereafter, or (B) at any time after
December 31, 1996 if all of the conditions precedent set forth in Section 8.1
have not been met, or (C) at any time upon failure of any contingency with
respect to Middle Bay's obligations; or
(iii) by NPC and Bison acting together (A) at any time if the
representations and warranties of Middle Bay contained in Article IV were
incorrect in any material respect when made or at any time thereafter, or (B)
at any time after December 31, 1996 if any of the conditions precedent set
forth in Section 8.2 have not been met; or
(iv) by NPC upon failure of any contingency with respect to NPC's
obligations.
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 13.13, 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 13.13 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
equity (including specific performance), instead of electing to terminate this
Agreement pursuant to this Section 13.13. The provisions of this Section
13.13 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.
13.14 Signatures Required. This Agreement shall not become effective
until or unless this Agreement is signed by Middle Bay, NPC and Bison.
IN WITNESS WHEREOF, the parties to this Agreement have signed this
Agreement under seal on the day and year first above written or as otherwise
set forth below.
"MIDDLE BAY" MIDDLE BAY OIL COMPANY, INC.
Date: 12/19/96 By: /s/ John J. Bassett
------------------------------
John J. Bassett, President
"NPC" NPC ENERGY CORP.
Date: 12/18/96 By: /s/ C. J. Lett, III
------------------------------
C. J. Lett, III, President
"BISON" BISON ENERGY CORPORATION
Date: 12/18/96 By: /s/ C. J. Lett, III
------------------------------
C. J. Lett, III, President
The undersigned, C.J. Lett, hereby joins in this Agreement for the sole
purpose of being bound by the provisions of Section 9.1(c) hereof and has not
assumed, or become responsible for, any representations, warranties or other
agreements herein.
/s/ C. J. Lett, III
-----------------------------
C. J. Lett, III
<PAGE>
EXHIBITS
Exhibit A Properties
Exhibit B Ryder Scott Summary
Exhibit C Partnership Shareholders
Exhibit D Bison NPC Common Sock
Exhibit E PUDs
Exhibit F Exceptions to Representations and Warranties
Exhibit G Financial Statements
Exhibit H Environmental Exceptions
Exhibit I Properties Subject to Change of Operator
SCHEDULES
Schedule 5.8 Litigation
Schedule 5.9 Employee Benefits
<PAGE>
Exhibit "A"
<TABLE>
<CAPTION>
ID LEASE/WELL NAME SEC TWP RNG COUNTY ST NPCWI NPCONRI NPCGNRI NPCORI NPCGRI NPCOIL Rev NPCGAS Rev
- ------- ----------------- --- --- ---- ---------- --- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
95500 ADAMS 1-22 (ORI) 22 29N 16W WOODS OK 0.04101560 0.04101560 0.04101560 0.04101560
72100 BELL #1-22 22 21N 21W WOODWARD OK 0.28820000 0.20750400 0.20750400 0.20750400 0.20750400
83900 BARNES 1-A SWD 13 19N 1W PAYNE OK 1.00000000 0.00000000 0.00000000
61300 BRYAN ROYALTY 34 17N 4W LOGAN OK 0.03789060 0.03789060 0.03789060 0.03789060
(ORI)
71600 BURKHEAD #1 33 6N 2W MCCLAIN OK 0.25000000 0.19433584 0.19433584 0.19433584 0.19433584
1145187 COBERLY 1A-2 2 30S 7W KINGMAN KS 1.00000000 0.80000000 0.80000000 0.80000000 0.80000000
1137150 CRITSER 1A 16 31S 8W HARPER KS 0.58250000 0.47783203 0.47783203 0.47783203 0.47783203
1137151 CRITSER 1B 16 31S 8W HARPER KS 0.63745827 0.50996662 0.50996662 0.50996662 0.50996662
1137152 CRITSER C #1,#2 16 31S 8W HARPER KS 0.63968750 0.51175000 0.51175000 0.51175000 0.51175000
1145150 CRUMLEY #1,3,4 22 30S 7W KINGMAN KS 0.48437500 0.39733883 0.39733883 0.39733883 0.39733883
1137154 DARNES RANCH 24 31S 9W HARPER KS 0.48437500 0.42382811 0.42382811 0.42382811 0.42382811
#1,2,3,4 SWD 5
1145151 DEE #1 31 29S 8W KINGMAN KS 0.06250000 0.04718750 0.04718750 0.04718750 0.04718750
1137158 DRESSER 1 B 9 31S 8W HARPER KS 0.57718750 0.46175000 0.46175000 0.46175000 0.46175000
1137157 DRESSER 1A 9 31S 8W HARPER KS 0.58250000 0.50968750 0.50968750 0.50968750 0.50968750
1137159 DRESSER 1C 9 31S 8W HARPER KS 0.33500000 0.26800000 0.26800000 0.26800000 0.26800000
66300 DRUMMOND 1-A,2-A 28 22N 9E OSAGE OK 0.23000000 0.18476660 0.18476660 0.18476660 0.18476660
57900 FARRIS #1-30 30 25N 13W WOODS OK 0.50000000 0.41750000 0.41750000 0.41750000 0.41750000
94100 FARRIS #2-30 30 25 13W WOODS OK 0.50000000 0.41750000 0.41750000 0.41750000 0.41750000
1137161 FLEMING 1B 8 31S 8W HARPER KS 0.72377091 0.57901673 0.57901673 0.57901673 0.57901673
1137160 FLEMING A #1 8 31S 8W HARPER KS 0.58250000 0.50968747 0.50968747 0.50968747 0.50968747
50000 FMLU/KOCH TRACTS 32 22N 1W NOBLE OK 0.16661500 0.14471606 0.14471610 0.00003823 0.00003823 0.14475429 0.14475433
78000 FOUTS #1-A 5 9N 7E SEMINOL OK 0.06250000 0.06250000 0.06250000 0.06250000
75900 GENGLER #1 31 20N 1W NOBLE OK 1.00000000 0.81148221 0.80450000 0.81148221 0.80450000
93000 GENGLER #2 31 20N 1W NOBLE OK 1.00000000 0.78750000 0.78750000 0.78750000 0.78750000
59700 HARMON #4 33 18N 4W LOGAN OK 1.00000000 0.82031250 0.82031250 0.82031250 0.82031250
17700 HARMON/NW CRESEN 33 18N 4W LOGAN OK 0.05468700 0.01073949 0.05468700 0.01073949
#108 (ORI)
1145152 HARTMAN #1 16 30S 8W KINGMAN KS 0.48437500 0.38409420 0.38409420 0.38409420 0.38409420
53150 HEISTER #1 24 10N 2E POTTAWATOM OK 0.98749327 0.79388423 0.79388027 0.79388423 0.79388027
1137163 HOSTETLER #2 19 31S 6W HARPER KS 0.06250000 0.05468750 0.05468750 0.05468750 0.05468750
91500 JONES ESTATE 4 17N 4W LOGAN OK 0.01319760 0.01319760 0.01319760 0.01319760
200500 KOZIARI ROYALTY 34 6N 15E ST. CLAIR MI 0.00122628 0.00122628 0.00122628 0.00122628
TR 2
71800 KRAFT STATE #1-30 30 1N 27E CM BEAVER OK 0.19672821 0.16322995 0.16322995 0.16322995 0.16322995
90800 KRAFT STATE #2-30 30 1N 27E CM BEAVER OK 0.19672821 0.18054740 0.18054740 0.18054740 0.18054740
(UPPER & LOWER)
91700 KRAFT STATE #3-30 30 1N 27E CM BEAVER OK 0.23376664 0.18058470 0.18058470 0.18058470 0.18058470
91800 KRAFT STATE #4-30 30 1N 27E CM BEAVER OK 0.23376664 0.18058470 0.18058470 0.18058470 0.18058470
91900 KRAFT STATE #5-30 30 1N 27E CM BEAVER OK 0.23376664 0.18058474 0.18058474 0.18058474 0.18058474
95300 KRAFT STATE A#1 30 1N 27E CM BEAVER OK 0.11688330 0.09029240 0.09029240 0.09029240 0.09029240
1145155 KYLE 1A 10 30S 7W KINGMAN KS 0.44187500 0.35350000 0.35350000 0.35350000 0.35350000
1145155 KYLE HC #2,3 3 30S 7W KINGMAN KS 0.44187500 0.35350000 0.35350000 0.35350000 0.35350000
82400 LEHMKUHL SWD 31 20N 1W PAYNE OK 1.00000000 0.00000000 0.00000000
60400 LONGTON-COWSAR 22 15N 5E LINCOLN OK 0.03000000 0.03000000 0.03000000 0.03000000
ROYALTY (ORI)
82600 LOWRY 2,3,4,5,6 12 19N 1W PAYNE OK 1.00000000 0.82499800 0.82499800 0.82499800 0.82499800
1184150 MCMILLAN #3 29 22S 14W STAFFORD KS 0.53125000 0.42500000 0.42500000 0.42500000 0.42500000
93100 MEYER # 1 31 20N 1W NOBLE OK 1.00000000 0.83005980 0.83005980 0.83005980 0.83005980
75200 MOORE #1-6 6 18N 20W DEWEY OK 0.03692100 0.02842800 0.02842800 0.02842800 0.02842800
1137167 MUIR #1B,2B 10 31S 8W HARPER KS 0.30937500 0.24750000 0.24750000 0.24750000 0.24750000
1137166 MUIR AB #1 12 31S 9W HARPER KS 0.06250000 0.05468750 0.05468750 0.05468750 0.05468750
11000 MUNDELL W.F. 15 18N 8E CREEK OK 0.00961450 0.00961450 0.00961450 0.00961450
(ORI)
95000++ N.KREMLIN MISENER 4 24N 6W GARFIELD OK 0.37222732 0.29121307 0.29121307 0.29121307 0.29121307
SAND UNIT ++
96100 NELSON #12 30 20N 1W NOBLE OK 0.33333250 0.25638867 0.25638867 0.25638867 0.25638867
82300 NELSON 30 20N 1W NOBLE OK 0.22222170 0.16583330 0.16583330 0.16583330 0.16583330
7,8,9,10,11
1137168 NEWBERRY 35 31S 9W HARPER KS 0.42335036 0.34728689 0.34728689 0.34728689 0.34728689
1,2 & 3, 1 SWD
57000 NW CRESCENT 33 18N 4W LOGAN OK 0.26870000 0.21986518 0.21363299 0.21986518 0.21363299
WATER FLOOD
76600 PARKER # 1 3 18N 11E CREEK OK 0.25000000 0.20000000 0.20000000 0.20000000 0.20000000
66900 PHELPS #1 23 26 17N 17W DEWEY OK 0.35009800 0.25786650 0.25786650 0.25786650 0.25786650
89000 PHILLIPS #1 (ORI) 3 17N 4W LOGAN OK 0.04119990 0.04119990 0.04119990 0.04119990
57800 PICKETT #1 30 28N 3W GRANT OK 1.00000000 0.80000000 0.80000000 0.80000000 0.80000000
78500 RILEY JO FANCHER 25 10N 2E POTTAWATOM OK 0.00006250 0.00006250
49600 RINGWOOD-MANNING MAJOR OK 0.00006350 0.00006350 0.00006350 0.00006350
UNIT (ORI)
65800 ROUT #2 12 17N 4W LOGAN OK 0.87500000 0.76562499 0.76562499 0.76562499 0.76562499
79600 RUDD #1,2,3 30 20N 1W NOBLE OK 1.00000000 0.75000000 0.74250000 0.75000000 0.74250000
90700 RUDD #4 30 20N 1W NOBLE OK 1.00000000 0.75000000 0.75000000 0.75000000 0.75000000
1137170 SANDERS 19 31S 8W HARPER KS 0.42625000 0.34100000 0.34100000 0.34100000 0.34100000
#1-19, 2-19
55800 SAVAGE ROYALTY/ 29 22N 1E NOBLE OK 0.00607600 0.00607600 0.00607600 0.00607600
S.OTOE TR #9
90100 SHAWNEE LAKE 25 10N 2E POTTAWATOM OK 0.98024424 0.78413274 0.75446579 0.78413274 0.75446579
WATERFLOOD
58300 SHERRILL ROYALTY 5 18N 4E PAYNE OK 0.02734380 0.02734380 0.02734380 0.02734380
(ORI)
60900 SMITH WEIGAND #1 21 26N 11W ALFALFA OK 1.00000000 0.86500000 0.86500000 0.86500000 0.86500000
1137172 STEPHENS 1A 15 31S 8W HARPER KS 0.32850000 0.28743750 0.28743750 0.28743750 0.28743750
1137173 STEPHENS 1B 16 31S 8W HARPER KS 0.36406250 0.29125000 0.29125000 0.29125000 0.29125000
17900 TAUTFEST ROYALTY 32 24N 1E NOBLE OK 0.05468700 0.05468700 0.05468700 0.05468700
1137174 VALDOIS A#1 2 31S 8W HARPER KS 0.32850000 0.28743750 0.28743750 0.28743750 0.28743750
1137175 VALDOIS B#1,2 3 31S 8W HARPER KS 0.24125000 0.19300000 0.19300000 0.19300000 0.19300000
701500 WARDELL FEDERAL 9 28N 108W SUBLETTE WY 0.00697925 0.00697925 0.00697925 0.00697925
#1-4
1137102 WARREN 1A 17 31S 8W HARPER KS 0.58250000 0.50968750 0.50968750 0.50968750 0.50968750
68700 WELLS #1 14 5N 3W MCCLAIN OK 0.25000000 0.19403100 0.19403100 0.19403100 0.19403100
13300 WEWOKA NW SAND UN SEMINOLE OK 0.01078401 0.01078401 0.01078401 0.01078401
1137177 WILEY #2A-29 29 31S 8W HARPER KS 0.28562500 0.22850000 0.22850000 0.22850000 0.22850000
1137178 WILLIAMS A #1 11 31S 8W HARPER KS 0.32850000 0.28743750 0.28743750 0.28743750 0.28743750
401700 WILSON, ELRICK ROBERTS TX 0.25000000 0.20312500 0.20312500 0.20312500 0.20312500
#1 TN&O RAILROAD
1145161 WINGATE #1,#2 1 31S 9W HARPER KS 0.20000000 0.16000000 0.16000000 0.16000000 0.16000000
95800 WOODWARD 21 224N 20W WOODWARD OK 0.00140000 0.00140000 0.00140000 0.00140000
IODINE UNIT #3
1137179 YODER A #1 11 31S 8W HARPER KS 0.45312500 0.36250000 0.36250000 0.36250000 0.36250000
DOMBAUGH 2-21 21 31S 8W HARPER KS 0.19875000 0.15148400 0.15148400 0.15148400 0.15148400
DOMBAUGH 3-21 21 31S 8W HARPER KS 0.19875000 0.15148400 0.15148400 0.15148400 0.15148400
KYLE HC 4-3 3 30S 7W KINGMAN KS 1.00000000 0.80000000 0.80000000 0.80000000 0.80000000
KYLE 1A 10 30S 7W KINGMAN KS 1.00000000 0.80000000 0.80000000 0.80000000 0.80000000
MUIR 4A-10 TWIN 10 31S 8W HARPER KS 1.00000000 0.80000000 0.80000000 0.80000000 0.80000000
RAIDA 2 18 30S 6W HARPER KS 0.62500000 0.51025100 0.51025100 0.51025100 0.51025100
STEPHENS 2B-15 16 31S 8W HARPER KS 1.00000000 0.80000000 0.80000000 0.80000000 0.80000000
STEPHENS 3B-15 16 31S 8W HARPER KS 1.00000000 0.80000000 0.80000000 0.80000000 0.80000000
SWINGLE 2-14 14 30S 9W KINGMAN KS 0.50000000 0.43250000 0.43250000 0.43250000 0.43250000
VALDOIS 3B-2 3 31S 8W HARPER KS 1.00000000 0.80000000 0.80000000 0.80000000 0.80000000
WINGATE 3-1 1 31S 9W HARPER KS 1.00000000 0.80000000 0.80000000 0.80000000 0.80000000
BARNES A1 13 19N 1W PAYNE OK 1.00000000 0.82499800 0.82499800 0.82499800 0.82499800
HARMON 4 33 18N 4W LOGAN OK 1.00000000 0.82031300 0.82031300 0.82031300 0.82031300
SMITH WEIGAND 1E 21 26N 11W ALFALFA OK 1.00000000 0.86500000 0.86500000 0.86500000 0.86500000
SMITH WEIGAND 1H 21 26N 11W ALFALFA OK 1.00000000 0.86500000 0.86500000 0.86500000 0.86500000
SMITH WEIGAND 1T 21 26N 11W ALFALFA OK 1.00000000 0.86500000 0.86500000 0.86500000 0.86500000
LOWRY 6 12 19N 1W PAYNE OK 1.00000000 0.82499800 0.82499800 0.82499800 0.82499800
NELSON 10 30 20N 1W NOBLE OK 0.22222220 0.16583300 0.16583300 0.16583300 0.16583330
NELSON 11 30 20N 1W NOBLE OK 0.22222220 0.16583300 0.16583300 0.16583300 0.16583330
NELSON 12 30 20N 1W NOBLE OK 0.33333330 0.25638600 0.25638600 0.25638600 0.25638600
NELSON 8 30 20N 1W NOBLE OK 0.22222220 0.16583300 0.16583300 0.16583300 0.16583330
PARKER 1 30 20N 1W CREEK OK 0.25000000 0.20000000 0.20000000 0.20000000 0.20000000
</TABLE>
Footnotes: ++NKMSU interest is subject to 30% NPI reversion to NCRA atr 66,000
Net BO abd $750,00 net rev., limited to a maximum of $300,000
<PAGE>
Exhibit "B"
NPC ENERGY CORPORATION
ESTIMATED FUTURE RESERVES AND INCOME
SUMMARY OF GROSS AND NET RESERVE AND INCOME DATA
CONSTANT CASE
AS OF JANUARY 1, 1996
<TABLE>
<CAPTION>
ESTIMATED REMAINING RESERVES ESTIMATED FUTURE DOLLARS
------------------------------------------------- --------------------------------------------------
8/8 THS NET NET INCOME BEFORE FIT
RES. ------------------ ------------------- GROSS REV. ------------------------
TYPE OIL/COND. GAS OIL/COND. SALE GAS AFTER PROD. TOTAL DISCOUNTED
(A) BARRELS(B) MMCF BARRELS(B) MMCF TAXES DEDUCTIONS UNDISOUNTED @ 10.00%
--- --------- ---- --------- ---- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SPIVEY GRABS FIELD,
KINGMAN COUNTY, KANSAS
COBERLY 1-2 (MISS) PV-BP 25,000 150 20,000 120 626,093 159,892 466,201 321,157
SPIVEY-GRABS-BASIL FIELD,
HARPER COUNTY, KANSAS
CRITSER NO 1A (MISS) PV-PD 8,635 333 4,126 159 472,207 214,876 257,331 119,949
SPIVEY-GRABS FIELD
HARPER COUNTY, KANSAS
CRITSER NO. 1B (MISS) PV-PD 113 0 58 0 1,538 1,496 42 42
CRITSER C NO. 1 & 2
(MISS) PV-PD 13,794 34 7,059 18 163,625 129,974 33,651 27,116
SPIVEY-GRABS-BASIL FIELD,
HARPER COUNTY, KANSAS
CRUMLEY NO. 1, 3 & 4
(MISS) PV-PD 778 2 309 1 6,880 6,814 66 66
SPIVEY-GRABS-BASIL FIELD,
HARPER COUNTY, KANSAS
DARNES RANCH 1,2,3,4
(MISS) PV-PD 25,652 104 10,872 44 263,049 190,715 72,334 54,054
UNKNOWN FIELD,
KINGMAN COUNTY, KANSAS
DEE 1 (MISS) PV-PD 0 17 0 1 1,805 1,509 296 263
SPIVEY-GRABS-BASIL FIELD,
HARPER COUNTY, KANSAS
DRESSER NO 1A (MISS) PV-PD 12,373 210 6,306 107 367,855 177,231 190,624 114,486
DRESSER NO 1B (MISS) PV-PD 23,140 93 10,685 43 281,800 154,410 127,390 77,518
DRESSER NO 1C (MISS) PV-PD 0 0 0 0 0 0 0 0
FLEMING NO 1B (MISS) PV-PD 15,186 127 8,793 74 248,792 164,524 84,268 55,785
SPIVEY-GRABS-BASIL FIELD,
HARPER COUNTY, KANSAS
HARTMAN NO 1 (MISS) PV-PD 0 0 0 0 0 0 0 0
UNKNOWN FIELD,
HARPER COUNTY, KANSAS
HOSTETLER 2 (MISS) PV-PD 8,985 0 491 0 8,531 6,592 1,939 1,515
SPIVEY-GRABS-BASIL FIELD,
HARPER COUNTY, KANSAS
FLEMING A, JAMES 1 (MISS) PV-PD 12,479 154 6,361 78 217,295 130,434 86,861 55,049
KYLE NO 1A (MISS) PV-PD 0 0 0 0 0 0 0 0
SPIVEY-GRABS-BASIL FIELD,
KINGMAN COUNTY, KANSAS
KYLE HC NO. 2 & 3 (MISS) PV-PD 13,865 353 4,898 125 251,062 145,260 105,802 68,087
WOOD NW FIELD,
STAFFORD COUNTY, KANSAS
MCMILLAN NO. 3 (LKC) PV-PD 11,126 0 4,729 0 82,091 59,912 22,179 16,558
SPIVEY-GRABS-BASIL FIELD,
HARPER COUNTY, KANSAS
MUIR NO. 1B & 2B (MISS) PV-PD 29,409 162 7,279 40 220,694 135,601 85,093 56,925
UNKNOWN FIELD,
HARPER COUNTY, KANSAS
MUIR AB 1 (MISS) PV-PD 3,484 16 191 1 4,335 3,624 711 600
SPIVEY-GRABS-BASIL FIELD,
KINGMAN COUNTY, KANSAS
NEWBERRY NO. 1, 2 & 3
(MISS) PV-PD 21,438 557 7,445 194 602,953 343,615 259,338 140,214
SANDERS NO. 1-19 & 2-19 PV-PD 23,160 266 7,898 91 312,996 184,429 128,567 80,836
STEPHENS NO. 1A (MISS) PV-PD 13,188 87 3,791 25 124,995 72,736 52,259 32,448
STEPHENS NO. 1B (MISS) PV-PD 52,287 92 15,229 27 328,301 136,300 192,001 102,652
VALDOIS A NO. 1 (MISS) PV-PD 2,087 9 600 3 16,627 14,328 2,299 2,043
VALDOIS B NO. 1 & 2
(MISS) PV-PD 10,985 32 2,120 6 51,103 39,824 11,279 9,187
WARREN NO. 1 A (MISS) PV-PD 7,591 95 3,869 48 131,580 92,056 39,524 27,882
WILEY NO. 2A-29 (MISS) PV-PD 11,427 27 2,611 6 56,497 35,743 20,754 15,354
WILLIAMS A NO. 1 (MISS) PV-PD 2,098 18 603 5 22,144 19,139 3,005 2,556
WINGATE NO. 1 & 2 (MISS) PV-PD 5,152 291 824 47 101,743 60,420 41,323 29,150
YODER A NO. 1 (MISS) PV-PD 666 8 241 3 9,896 9,278 618 589
ORLANDO EAST FIELD
PAYNE COUNTY, OKLAHOMA
BARNES 1-A (CLEVELAND) PV-BP 10,000 50 8,250 41 201,197 97,443 103,754 80,191
OAKDALE FIELD,
WOOD COUNTY, OKLAHOMA
FARRIS NO. 1-30
(CHESTER) PV-PD 0 122 0 51 58,989 29,772 29,217 20,347
FARRIS NO. 2-30
(CHESTER) PV-PD 0 356 0 149 179,646 42,019 137,627 82,642
ORLANDO FIELD
NOBLE COUNTY, OKLAHOMA
GENGLER NO. 1
(CL-MSNR-MISS) PV-PD 7,029 53 5,704 43 153,802 108,900 44,902 33,909
GENGLER NO. 2
(CL-MSNR-MISS) PV-PD 164 0 129 0 2,254 2,200 54 53
CRESCENT LOVELL FIELD,
LOGAN COUNTY, OKLAHOMA
HARMON NO. 4 (AVANT) PV-PD 0 2 0 1 1,110 1,100 10 10
HARMON NO. 4 (2ND
TONKAWA) PV-BP 0 176 0 144 112,392 81,200 31,192 21,061
ORLANDO FIELD,
PAYNE COUNTY, OKLAHOMA
LOWRY 2,3,4,5,6
(MISENER) PV-PD 10,539 0 8,694 0 151,454 132,600 18,854 16,513
ORLAND FIELD,
NOBLE COUNTY, OKLAHOMA
MEYER NO. 1 (CLEVELAND) PV-PD 0 0 0 0 0 0 0 0
KREMLIN FIELD,
GARFIELD COUNTY, OKLAHOMA
N KREMLIN MISENER SAND
UT PV-PD 48,690 20 14,179 6 259,968 127,935 132,033 111,099
MAYFLOWER NW FIELD
NOBLE COUNTY, OKLAHOMA
PICKETT NO. 1 (RED FORK) PV-PD 0 0 0 0 0 0 0 0
CRESCENT LOVELL FIELD,
LOGAN COUNTY, OKLAHOMA
ROUT NO. 2 (MISSISSIPPI) PV-PD 3,248 11 2,487 8 53,421 44,100 9,321 7,760
ORLAND FIELD,
NOBLE COUNTY, OKLAHOMA
RUDD NO. 1, 2 & 3 PV-PD 0 0 0 0 0 0 0 0
RUDD NO. 4 (PERRY) PV-PD 0 0 0 0 0 0 0 0
RUDD NO. 4 (SKINNER) PV-BP 4,000 13 3,000 9 63,059 42,580 20,479 17,186
RUDD NO. 4 (MISSISSIPPI) PV-BP 13,000 13 9,750 10 181,075 93,678 87,397 71,748
SHAWNEE LAKE FIELD,
POTTAWATOMIE COUNTY,
OKLAHOMA
SHAWNEE LAKE WATERFLOOD PV-PD 0 0 0 0 0 (101,720) 101,720 101,299
CHEROKEE SW FIELD,
ALFALFA COUNTY, OKLAHOMA
SMITH WEIGAND NO. 1
(TONK) PV-PD 217 217 188 188 254,930 86,000 168,930 110,405
SMITH WEIGAND NO. 1
(ENDIC) PV-BP 0 100 0 87 115,722 52,726 62,996 7,874
HARMON NORTH FIELD,
WOODWARD COUNTY, OKLAHOMA
BELL NO. 1-22 (CG) PV-PD 3,998 10 830 2 18,481 15,216 3,265 2,882
WAYNE SW FIELD,
MCCLAIN COUNTY, OKLAHOMA
BURKHEAD NO. 1 (VIOLA) PV-PD 56 0 11 0 211 200 11 10
HOMINY SOUTH FIELD,
OSAGE COUNTY, OKLAHOMA
DRUMMOND 1A, 2A
(RED FORK) PV-PD 0 0 0 0 0 0 0 0
POLO FIELD,
NOBLE COUNTY, OKLAHOMA
FMLU/KOCH TRACTS (MISS) PV-PD 856,381 7 123,965 1 2,074,084 1,015,692 1,058,392 430,824
SHAWNEE LAKE UNIT EAST
FIELD, POTTAWATOMIE
COUNTY, OKLAHOMA
HEISTER NO. 1 PV-PD 17,130 0 12,441 0 208,057 134,984 73,073 49,925
LOGAN SOUTH FIELD,
BEAVER COUNTY, OKLAHOMA
KRAFT-STATE NO. 1-30 PV-PD 384 87 63 14 19,048 11,687 7,361 6,271
KRAFT-STATE NO. 2-30 PV-PD 6,273 369 1,024 60 93,228 50,358 42,870 32,007
KRAFT-STATE NO. 3-30 PV-PD 20,144 101 3,638 18 83,815 42,548 41,267 30,169
KRAFT-STATE NO. 4-30 PV-PD 1,891 236 341 43 59,633 31,323 28,310 20,923
KRAFT-STATE NO. 5-30 PV-PD 0 0 0 0 0 0 0 0
KRAFT-STATE A NO. 1 PV-PD 14,174 113 1,280 10 36,526 17,537 18,989 13,643
VICI SW FIELD,
DEWEY COUNTY, OKLAHOMA
MOORE B NO. 1-6 (RED FORK) PV-PD 3,453 432 98 12 21,021 8,290 12,731 8,645
ORLANDO FIELD,
NOBLE COUNTY, OKLAHOMA
NELSON NO. 8, 10 & 11
(MISENER) PV-PD 13,645 40 2,263 7 44,427 30,006 14,421 13,462
NELSON NO. 8, 10 & 11
(SKINNER) PV-BP 24,000 75 3,980 12 79,038 37,360 41,678 26,490
NELSON NO. 12 (MSNER-MISS) PV-PD 0 0 0 0 0 0 0 0
NELSON NO. 12 (SKINNER) PV-BP 8,000 25 2,051 6 40,731 18,681 22,050 18,918
CRESCENT LOVELL FIELD,
LOGAN COUNTY, OKLAHOMA
NW CRESCENT WATERFLOOD PV-PD 8,566 137 1,883 29 70,400 42,563 27,837 22,568
SAND SPRINGS FIELD,
CREEK COUNTY, OKLAHOMA
PARKER NO. 1 (RED FORK) PV-PD 0 0 0 0 0 0 0 0
PARKER NO. 1 (BARTLESVILLE) PB-BP 8,800 0 1,771 0 29,610 13,974 15,636 13,668
PUTNAM FIELD,
DEWEY COUNTY, OKLAHOMA
PHELPS NO. 1-23 (RED FORK) PV-PD 2,313 219 596 57 93,010 61,262 31,748 22,940
CHEROKEE SW FIELD,
ALFALFA COUNTY, OKLAHOMA
SMITH, HELEN NO. 1
(WILCOX) PV-SI 0 0 0 0 0 0 0 0
SMITH, HELEN NO. 1
(TONKAWA) PV-BP 0 250 0 216 289,307 137,847 151,460 94,346
SMITH, HELEN NO. 1
(ENDICOT) PB-BP 0 100 0 87 115,722 66,752 48,970 8,415
SMITH, HELEN NO. 1
(HOOVER) PV-BP 0 150 0 130 173,584 42,001 131,583 14,769
PAYNE FIELD,
MCCLAIN COUNTY, OKLAHOMA
WELLS NO. 1 (HART/RF) PV-PD 2,318 508 450 99 196,340 37,875 158,465 94,950
HODGES FIELD,
OCHILTREE COUNTY, TEXAS
WILSON, ELRICK NO. 1
(OLVD) PV-PD 4,981 61 1,012 12 35,435 28,331 7,104 5,901
FALKNER NE FIELD,
WOODS COUNTY, OKLAHOMA
ADAMS NO. 1-22 PV-PD 0 31 0 1 1,601 0 1,601 1,404
CRESCENT LOVELL FIELD,
LOGAN COUNTY, OKLAHOMA
BRYAN ROYALTY PV-PD 0 0 0 0 0 0 0 0
UNKNOWN FIELD,
SEMINOLE COUNTY, OKLAHOMA
FOUTS 1-A PV-SI 0 0 0 0 0 0 0 0
CRESCENT LOVELL FIELD,
LOGAN COUNTY, OKLAHOMA
HARMON/NW CRESENT
NO. 108 PV-PD 101 14 6 1 1,043 0 1,043 1,013
UNKNOWN FIELD,
LOGAN COUNTY, OKLAHOMA
JONES ESTATE (WILCOX) PV-SI 0 0 0 0 0 0 0 0
COLUMBUS THREE FIELD,
ST.-CLAIR COUNTY, MICHIGAN
KOZIARI ROYALTY (NIAGRAN) PV-PD 19,072 0 770 0 13,348 134 13,214 11,902
STROUD FIELD,
LINCOLN COUNTY, OKLAHOMA
LONGTON-COWSAR (SKINNER) PV-SI 0 0 0 0 0 0 0 0
OLIVE FIELD,
CREEK COUNTY, OKLAHOMA
MUNDELL W.F. (REDFORK) PV-PD 70,842 0 681 0 11,390 0 11,390 7,919
CRESCENT LOVELL FIELD,
LOGAN COUNTY, OKLAHOMA
PHILLIPS NO. 1 (WILCOX) PV-PD 6,142 55 253 2 6,259 0 6,259 4,295
UNKNOWN FIELD,
POTTAWATOMIE COUNTY,
OKLAHOMA
RILEY JO FANCHER 1-25 PV-SI 0 0 0 0 0 0 0 0
RINGWOOD FIELD,
MAJOR COUNTY, OKLAHOMA
RINGWOOD-MANNING UNIT PV-PD 164,847 0 11 0 176 0 176 119
OTOE CITY FIELD,
NOBLE COUNTY, OKLAHOMA
SAVAGE/S. OTOE TR
NO. 9 PV-SI 0 0 0 0 0 0 0 0
RIPLEY NORTH FIELD,
PAYNE COUNTY, OKLAHOMA
SHERRILL ROYALTY PV-SI 0 0 0 0 0 0 0 0
CERES SOUTH FIELD,
NOBLE COUNTY, OKLAHOMA
TAUTFEST PV-PD 0 0 0 0 0 0 0 0
JONAH FIELD,
SUBLETTE COUNTY, WYOMING
WARDELL FEDERAL NO. 1-4 PV-SI 0 0 0 0 0 0 0 0
WEWOKA NW FIELD,
SEMINOLE COUNTY, OKLAHOMA
WEWOKA NW SAND UNIT
NO. 1 PV-PD 0 0 0 0 0 0 0 0
BOILING SPRING FIELD,
WOODWARD COUNTY, OKLAHOMA
WOODWARD IODINE UNIT
NO. 3 PV-PD 0 2 0 0 3 0 3 3
SPIVEY GRABS FIELD,
HARPER COUNTY, KANSAS
DOMBAUGH 2-21 (MISS) PB-UD 25,000 60 3,787 9 86,812 53,958 32,854 16,866
DOMBAUGH 3-21 (MISS) PS-UD 25,000 60 3,787 9 86,825 53,962 32,863 16,734
SPIVEY GRABS FIELD,
KINGMAN COUNTY, KANSAS
KYLE HC 4-3 (MISS) PV-UD 25,000 205 20,000 164 727,912 287,933 439,979 259,630
KYLE 1A (KS HERTHA) PV-BP 5,000 0 4,000 0 69,442 49,450 19,992 14,542
SPIVEY GRABS FIELD,
HARPER COUNTY, KANSAS
MUIR 4A-10 TWIN (MISS) PV-UD 20,000 200 16,000 160 647,927 263,260 384,667 230,473
RAIDA 2 (MISS) PV-UD 5,010 300 2,556 153 391,636 130,598 261,038 195,470
STEPHENS 2B-15 (MISS) PV-UD 25,000 200 20,000 160 717,159 268,379 448,780 269,930
STEPHENS 3B-15 (MISS) PV-UD 25,000 200 20,000 160 718,297 268,422 449,875 261,797
SPIVEY GRABS FIELD,
KINGMAN COUNTY, KANSAS
SWINGLE 2-14 (MISS) PV-UD 2,400 300 1,038 130 317,001 133,271 183,730 115,919
SPIVEY GRABS FIELD,
HARPER COUNTY, KANSAS
VALDOIS 3B-2 (MISS) PV-UD 20,000 50 16,000 40 370,298 249,426 120,872 58,226
WINGATE 3-1 (MISS) PV-UD 20,000 100 16,000 80 463,552 272,989 190,563 99,829
ORLANDO FIELD,
PAYNE COUNTY, OKLAHOMA
LOWRY 6 (CLEVELAND) PV-UD 10,000 50 8,250 41 195,448 135,243 60,205 39,691
** GRAND SUMMARY **
PROVED PRODUCING 1,615,687 6,290 300,385 1,959 8,553,504 4,531,752 4,021,752 2,356,736
PROVED NON-PRODUCING 89,000 902 51,031 689 1,835,918 760,132 1,075,786 680,408
PROVED UNDEVELOPED 147,400 1,305 117,288 935 4,157,594 1,878,923 2,278,671 1,335,495
TOTAL PROVED 1,852,087 8,497 468,704 3,583 14,547,016 7,170,807 7,376,209 4,372,639
TOTAL PROBABLE 33,800 260 5,558 182 347,866 187,410 160,456 46,823
TOTAL POSSIBLE 30,010 360 6,343 162 478,461 184,560 293,901 212,204
</TABLE>
<PAGE>
Exhibit "C"
PARTNERSHIP SHAREHOLDERS
<TABLE>
<CAPTION>
Shares Price Per Total
Owner Name Owned Share Dollars
---------- ------ ----- -------
<S> <C> <C> <C>
Midland-PRC Petroleum Partnership 1976-A 20,208 $3.50 $70,728
Midland-PRC Petroleum Partnership 1978-I 12,128 $3.50 42,448
Midland-PRC Petroleum Partnership 1979-I 47,072 $3.50 164,752
Midland-PRC Petroleum Partnership 1979-II 17,024 $3.50 59,584
Midland-PRC Petroleum Partnership 1980-I 12,896 $3.50 45,136
Midland-PRC Petroleum Partnership 1981-I 15,408 $3.50 53,928
Midland-PRC Petroleum Partnership 1982-II 11,568 $3.50 40,488
Midland-PRC Petroleum Partnership 1983-I 12,640 $3.50 44,240
Bison Energy Partners Limited
Partnership I 198,778 $3.50 695,723
BEC 1986 Oil & Gas Income Fund 470 $3.50 1,645
Eugene, Inc. 2,208 $3.50 7,728
------- ---------
Total Shares 350,400 $1,226,400
======= =========
</TABLE>
<PAGE>
Exhibit "D"
COMMON STOCK
<TABLE>
<CAPTION>
NPC Middle Bay
Shares Conversion Shares
Owner Name Owned Rate Exchanged
---------- ----- ------ ---------
<S> <C> <C> <C>
Bison Energy Corporation 449,600 1.25 562,000
</TABLE>
<PAGE>
Exhibit "E"
<TABLE>
<CAPTION>
LEASE/WELL NAME SEC TWP RNG COUNTY ST
- --------------- --- --- --- ------ --
<S> <C> <C> <C> <C> <C>
DOMBAUGH 2-21 21 31S 8W HARPER KS
DOMBAUGH 3-21 21 31S 8W HARPER KS
KYLE HC 4-3 3 30S 7W KINGMAN KS
MUIR 4A-10 TWIN 10 31S 8W HARPER KS
RAIDA 2 18 30S 6W HARPER KS
STEPHENS 2B-15 16 31S 8W HARPER KS
STEPHENS 3B-15 16 31S 8W HARPER KS
SWINGLE 2-14 14 30S 9W KINGMAN KS
VALDOIS 3B-2 3 31S 8W HARPER KS
WINGATE 3-1 1 31S 9W HARPER KS
</TABLE>
<PAGE>
Exhibit "F"
REPRESENTATIONS AND WARRANTIES:
The Securities and Exchange Commission (the "Commission") has inquired as to
the legal support for NPC's reliance upon Section 4(2) of the Securities Act
of 1933, as amended (the "1933 Act") for the reorganization effected by NPC
in August 1994, whereby the limited partnerships exchanged certain oil and
gas properties for common stock of NPC. The Seller has provided the Buyer
with all correspondence and filings with the Commission related to that
matter.
There are no other material exceptions relating to the Representations and
Warranties made by NPC Energy Corp. and Bison Energy Corporation.
<PAGE>
Exhibit "G"
NPC ENERGY CORP.
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
As Of
10/31/96
--------
<S> <C>
CURRENT ASSETS
Cash and marketable securities $ 686,107
Accounts receivable 203,411
Prepaid expenses 0
---------
Total Current Assets 889,518
Property (At Cost)
Undeveloped leasehold 50
Producing leasehold and equipment 6,764,811
---------
6,764,861
Less: Accumulated Depletion and Depreciation (4,937,613)
---------
1,827,248
Other Assets 2,363
---------
$2,719,129
=========
CURRENT LIABILITIES
Accounts payable $ 132,643
Current portion of notes payable 331,080
Income tax payable 22,724
--------
Total Current Liabilities 486,447
Note payable to bank 109,189
Deferred income tax 432,000
--------
541,189
STOCKHOLDERS' EQUITY
Common stock 1,552,292
Retained earnings 139,201
---------
Total Stockholders' Equity 1,691,493
---------
$2,719,129
=========
</TABLE>
NPC ENERGY CORP
PROFIT AND LOSS STATEMENT
(UNAUDITED)
<TABLE>
<CAPTION>
TEN MONTHS
ENDED
10/31/96
----------
<S> <C>
Oil and gas sales $1,168,482
Marketing and tax expense 59,086
---------
Net Sales 1,109,396
Operating expense 653,273
Depr and depl 133,782
---------
322,341
Intangible drilling costs 0
---------
322,341
Other Income:
Gain on sale of assets 103,995
Other 24,661
---------
128,656
Other Expense:
Administration department 148,324
Interest expense 47,641
---------
195,965
Operating profit 255,032
---------
Pretax profit 255,032
Provision for income taxes 54,724
---------
After tax profit $ 200,308
</TABLE>
NPC ENERGY CORP.
CASH FLOW STATEMENT
(UNAUDITED)
<TABLE>
<CAPTION>
TEN MONTHS
ENDED
10/31/96
----------
<S> <C>
Cash provided by operations:
After tax profit $ 200,308
Items included in after tax profit
which do not affect cash:
Depreciation and depletion 133,782
Deferred income tax 0
Gain on sale of assets (103,995)
--------
230,095
Deduct current removals of
Changes in working capital:
Accounts receivable (5,369)
Accounts payable (105,147)
Income taxes payable 115,646
--------
5,130
Cash used for investment activities:
Change in property and equipment 9,968
Change in other assets 0
--------
9,968
--------
Cash generated before financing 245,193
Cash used for financing activities:
Change in debt (275,900)
Dividends 0
--------
(275,900)
--------
Change in cash and temporary cash
investments ($ 30,707)
========
</TABLE>
<PAGE>
Exhibit "H"
1) NPC has received notification of possible violation concerning
the proper tank netting to protect migratory birds. NPC facilities
are currently being updated to comply with regulations.
2) The NKMSU is currently pursuing compliance with Mechanical Integrity
Tests (MIT) on all injection wells in the Unit. Currently, 2 wells
have failed and are being repaired for retesting.
<PAGE>
Exhibit "I"
<TABLE>
<CAPTION>
LEASE/WELL NAME SEC TWP RNG COUNTY ST
- --------------- --- --- --- ------ --
<S> <C> <C> <C> <C> <C>
BARNES 1-A SWD 13 19N 1W PAYNE OK
FARRIS #1-30 30 25N 13W WOODS OK
FARRIS #2-30 30 25N 13W WOODS OK
GENGLER #1 31 20N 1W NOBLE OK
GENGLER #2 31 20N 1W NOBLE OK
HARMON #4 33 18N 4W LOGAN OK
HEISTER #1 (ESLU) 24 10N 2E POTTAWATOMIE OK
LEHMKUHL SWD 31 20N 1W NOBLE OK
LOWRY 2,3,4,5,6 12 19N 1W PAYNE OK
MEYER #1 31 20N 1W NOBLE OK
N.KREMLIN MISENER
SAND UNIT 4 24N 6W GARFIELD OK
PHELPS #1 23, 26 17N 17W DEWEY OK
PICKETT #1 30 28N 3W GRANT OK
ROUT #2 12 17N 4W LOGAN OK
RUDD #1,2,3 30 20N 1W NOBLE OK
RUDD #4 30 20N 1W NOBLE OK
SHAWNEE LAKE
WATERFLOOD 25 10N 2E POTTAWATOMIE OK
SMITH WEIGAND #1 21 26N 11W ALFALFA OK
</TABLE>
<PAGE>
SCHEDULE 5.8
Litigation:
None.
<PAGE>
SCHEDULE 5.9
Employee Benefits:
None.
