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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) August 27, 1999
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MIDDLE BAY OIL COMPANY, INC.
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(Exact name of registrant as specified in its charter)
ALABAMA 0-21702 63-1081013
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1221 Lamar, Suite 1020, Houston, Texas 77010
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(Address of principal executive offices)
Registrant's telephone number, including area code (713) 759-6808
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N/A
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(Former name or former address, if changed since last report)
ITEM 1 - CHANGE IN CONTROL OF REGISTRANT
On August 27, 1999 Middle Bay Oil Company, Inc. ("Middle Bay" or "Company")
closed the previously announced sale to 3TEC Energy Corporation ("3TEC") of
$21.4 million of common stock, warrants and senior subordinated convertible
debt. Pursuant to the terms of the Securities Purchase Agreement executed July
1, 1999, 3TEC purchased 4,755,556 shares of newly issued Middle Bay common stock
and five year warrants to purchase 3,600,000 shares of Company common stock for
$10.7 million (the "Warrants"). The Warrants are exercisable for $1.00 per share
and are subject to certain restrictions regarding the timing of their exercise.
Middle Bay issued 3TEC a senior subordinated convertible note for $10.7 million
(the "Note"). The Note has a five-year maturity, bears interest at 9% per annum
and is convertible into Middle Bay common stock at $3.00 per share. At closing,
3TEC became Middle Bay's largest shareholder with ownership of approximately 36%
of the outstanding common stock. If 3TEC chooses to fully exercise the Warrants
and fully convert the Note to common shares, 3TEC would control approximately
58% of the then issued and outstanding shares of common stock of Middle Bay.
Concurrent with the closing of the 3TEC/Middle Bay transaction, Floyd C.
Wilson, became Chairman, President and Chief Executive Officer of Middle Bay.
John J. Bassett, formerly Middle Bay's President and Chief Executive
Officer, became Executive Vice President. Under the terms of a certain
shareholders agreement executed at closing, 3TEC has the right to designate
three members of a new five person Middle Bay Board of Directors. The Board
members designated by 3TEC are Mr. Wilson, David B. Miller and D. Martin
Phillips. Mr. Miller and Mr. Phillips are both managing directors of EnCap
Investments L.C. Certain other major shareholders of the Company exercised
their right to designate the other two board members by designating Mr.
Bassett and Gary R. Christopher of Kaiser-Francis Oil Company.
The August 30, 1999 press release is filed herewith as Exhibit 99.1, and is
incorporated herein by reference.
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ITEM 7 - FINANCIAL STATEMENTS AND EXHIBIT
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(c) Exhibits. The following exhibit is filed herewith:
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99.1 - Press Release issued by the Registrant on
August 30, 1999
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SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Middle Bay Oil Company, Inc.
(Registrant)
Date: September __, 1999 By: /s/ Floyd C. Wilson
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Floyd C. Wilson
President, Chief Executive Officer
and Chairman of the Board
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FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT:
STEVE W. HEROD
713/759-6808, EXT. 104
MIDDLE BAY OIL COMPANY, INC. ANNOUNCES CLOSING OF
SALE OF $21.4 MILLION OF COMMON STOCK, WARRANTS AND
SENIOR SUBORDINATED CONVERTIBLE DEBT TO 3TEC ENERGY CORPORATION
HOUSTON, TEXAS, AUGUST 30, 1999 . . . Middle Bay Oil Company, Inc. ("Middle
Bay" or "Company") (NASDAQ: MBOC) announced today the closing of the
previously announced sale to 3TEC Energy Corporation ("3TEC") of $21.4
million of common stock, warrants and senior subordinated convertible debt.
Pursuant to the terms of the Securities Purchase Agreement executed July 1,
1999, 3TEC purchased 4,755,556 shares of newly issued Middle Bay common stock
and five year warrants to purchase 3,600,000 shares of Company common stock
for $10.7 million. The warrants are exercisable for $1.00 per share and are
subject to certain restrictions regarding the timing of their exercise.
Middle Bay issued 3TEC a senior subordinated convertible note for $10.7
million (the "Note"). The Note has a five-year maturity, bears interest at 9%
per annum and is convertible into Middle Bay common stock at $3.00 per share,
a total of 3,566,667 common shares. The proceeds from the transaction have
been added to working capital and will be available for the acquisition,
development and exploration of oil and gas properties.
3TEC Energy Corporation is a privately held independent exploration and
production company based in Dallas, Texas whose largest shareholder is an
affiliate of EnCap Investments L.C. ("EnCap"). With over $1 billion in funds
under management, EnCap is a Houston based institutional funds management
firm specializing in financing the upstream and midstream sectors of the
energy industry. EnCap is a wholly owned subsidiary of El Paso Energy
Corporation. Floyd C. Wilson, former President and Chief Executive Officer
of Hugoton Energy Corporation, is a major shareholder and President of 3TEC.
Concurrent with the closing of the 3TEC/Middle Bay transaction, Mr. Wilson
became Chairman, President and Chief Executive Officer of Middle Bay. John
J. Bassett, formerly Middle Bay's President and Chief Executive Officer,
became Executive Vice President.
At closing, 3TEC became Middle Bay's largest shareholder with ownership of
approximately 36% of the outstanding common stock. Under the terms of a
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shareholders agreement executed at closing, 3TEC has the right to designate
three members of a new five person Middle Bay Board of Directors. The Board
members designated by 3TEC are Mr. Wilson, David B. Miller and D. Martin
Phillips. Mr. Miller and Mr. Phillips are both managing directors of EnCap.
Certain other major shareholders of the Company have the right to designate
the other two board members, who are Mr. Bassett and Gary R. Christopher of
Kaiser-Francis Oil Company. Kaiser-Francis Oil Company is the Company's
second largest shareholder with ownership of approximately 25% of Middle
Bay's outstanding common stock.
Middle Bay Oil Company, Inc. is an independent oil and gas exploration and
production company, headquartered in Houston, Texas, with operations in the
Gulf Coast and Mid-Continent regions.
The information contained in this press release may contain projections,
estimates and other forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Although the Company believes that its expectations are based on
reasonable assumptions, it can give no assurance that its goals will be
achieved. Important factors that could cause actual results to differ
materially from those included in the forward-looking statements include the
timing and extent of changes in commodity prices for oil and gas,
environmental risks, drilling, producing and operating risks, risks related
to exploration and development, uncertainties about the estimates of
reserves, government regulation, competition and the ability of the Company
to meet its stated business goals.
