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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): January 5, 1999
BURLINGTON RESOURCES COAL SEAM GAS ROYALTY
TRUST (Exact name of registrant as specified in its charter)
Delaware 1-12058 76-6088828
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Trust Division
NationsBank, N.A.
901 Main Street, Suite 1700
Dallas, Texas 75202
(Address, including zip code, of principal executive offices)
Registrant's telephone number, including area code: (214) 508-2364
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Item 5. OTHER EVENTS.
On January 5, 1999, NationsBank, N.A. (the "Trustee"), as trustee of
Burlington Resources Coal Seam Gas Royalty Trust (the "Trust"), engaged the firm
of Albrecht & Associates, Inc. of Houston, Texas as its advisor to assist the
Trustee in the marketing and sale of the assets of the trust estate (consisting
principally of a net profits interest related to certain coalbed methane gas
producing properties in the San Juan Basin of New Mexico). Albrecht & Associates
is an oil and gas divestment firm, specializing in the representation of sellers
of significant oil and gas properties.
As previously reported by the Trust, the assets of the trust estate are
to be sold as a result of the approval by unitholders of a proposal that
included the termination of the Trust and certain related matters (the
"Termination Proposal"). The Termination Proposal was made by San Juan Partners,
L.L.C., a major unitholder of the Trust ("San Juan"), and approved by
unitholders at a meeting held December 28, 1998, in Houston, Texas (such date
the "Termination Date").
On December 31, 1998, San Juan and certain affiliated parties
(collectively, the "San Juan Group") filed an Amendment No. 27 (the "Amendment")
to the Schedule 13D filed with the Securities and Exchange Commission (the
"Commission") by the San Juan Group on January 20, 1998 with respect to the San
Juan Group's ownership of units of beneficial interest ("Units") in the Trust.
As disclosed in the Amendment, on December 31, 1998, San Juan and Burlington
Resources Oil & Gas Company ("BROG") consummated the transactions contemplated
by their purchase agreement as described in the Information Statement filed with
the Commission and mailed to unitholders on December 8, 1998 (the "Information
Statement") and in Amendment No. 26 to the San Juan Group's Schedule 13D as
filed with the Commission on October 26, 1998. As described in the Information
Statement and the Amendment, pursuant to the purchase agreement, San Juan has
purchased from BROG, among other things, BROG's interest in and to certain
properties, including certain interests in the properties burdened by the
Trust's net profits interest and the associated rights and obligations of BROG
and its affiliates under the trust agreement, including certain preferential
rights to bid on and acquire the Trust's assets in the event of a termination of
the Trust. San Juan has acquired the right, under Section 9.03(c) of the Trust
Agreement of the Trust (the "Trust Agreement"), during the 60-day period
following the Termination Date to make an initial preemptive offer for the
assets of the trust estate and the right, under Section 9.03(e) of the Trust
Agreement, to purchase such assets for 105% of the highest acceptable offer (net
of the commissions payable by the Trust) made for the assets by a third party
during a specified period following the Termination Date.
On January 4, 1999, the Trustee received written notice from San Juan
that San Juan has waived its right to make an initial preemptive offer for the
trust estate assets during the 60-day period described above. As a result of San
Juan's waiver of this preemptive bidding right, the Trustee intends to proceed
with the process of marketing the trust estate assets as soon as practicable
with the assistance of its advisor.
Burlington Resources Coal Seam Gas Royalty Trust is a Delaware business
trust formed to own a net profits interest related to BROG's interest in the
Fruitland coal formation underlying the Northeast Blanco Unit in the San Juan
Basin of New Mexico. The Trust's units of beneficial interest
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are traded on the New York Stock Exchange under the symbol "BRU." It is expected
that the Units will continue to be traded on the Exchange until the assets of
the trust estate have been liquidated and a special distribution of the net
proceeds of sale has been made to unitholders. However, it is possible that
under certain circumstances the Units may be delisted by the Exchange prior to
payment of the special distribution and the final windup of the trust.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
10.1 Exclusive Agency Agreement dated as of January 5, 1999,
between Albrecht & Associates, Inc. and the Trust.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BURLINGTON RESOURCES COAL SEAM GAS
ROYALTY TRUST
By: NationsBank, N.A., Trustee
Date: January 12, 1999 By: /s/ Ron E. Hooper
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Ron E. Hooper
Vice President and
Trust Administrator
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Item
Number Exhibit
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<S> <C>
10.1 Exclusive Agency Agreement dated as of January 5,
1999, between Albrecht & Associates, Inc. and
Burlington Resources Coal Seam Gas Royalty Trust.
</TABLE>
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Exhibit 10.1
EXCLUSIVE AGENCY AGREEMENT
This Exclusive Agency Agreement (this "Agreement") is between Albrecht
& Associates, Inc. ("Albrecht") and Burlington Resources Coal Seam Gas Royalty
Trust, a Delaware business trust (the "Trust"), acting through NationsBank,
N.A., its trustee (the "Trustee").
WHEREAS, pursuant to Section 9.02(b) of the Trust Agreement dated May
1, 1993 (the "Trust Agreement") pursuant to which the Trust was established, the
Trust has been terminated by action of its Unitholders, and, pursuant to Section
9.03 of the Trust Agreement, the Trustee, on behalf of the Trust, is required to
engage an advisor to assist the Trustee in selling the Remaining Royalty
Interests (as defined in the Trust Agreement, and referred to herein as the
"Properties"), which assistance shall include valuing the Properties, evaluating
offers to purchase the Properties, seeking buyers for the Properties and
rendering the fairness opinions required by Section 9.03 of the Trust Agreement
and otherwise as may be requested by the Trustee; and
WHEREAS, Albrecht desires to act as exclusive agent in the sale of the
Properties and to earn a performance fee from the sale thereof;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties agree as follows:
1. Albrecht has been provided a copy of, and has read and understands the
terms and provisions of, the Trust Agreement, and represents to the
Trust and the Trustee that it is willing and able to perform all the
duties of the Advisor (as defined in the Trust Agreement) described in
Section 9.03 of the Trust Agreement and in this Agreement.
2. For the period contemplated by Section 9.03 of the Trust Agreement (the
"Engagement Period"), Albrecht shall diligently solicit potential
buyers of the Properties and submit to the Trustee all offers received,
subject to and in accordance with the provisions of Section 9.03 of the
Trust Agreement. All offers shall be subject to negotiation, and
Albrecht shall not require sealed bids. Without limiting the foregoing,
Albrecht will use its best efforts to obtain acceptable written,
all-cash offers to purchase the Properties during the period beginning
on the date hereof and ending April 28, 1999, as contemplated by
subsection (e) of Section 9.03.
3. If an offer is not received and accepted by April 28, 1999, Albrecht
shall continue to use its best efforts to obtain acceptable written
offers to purchase the Properties throughout the Engagement Period as
contemplated by subsections (e) and (g) of Section 9.03 of the Trust
Agreement and, if applicable, shall organize and conduct the public
auction for the Properties contemplated by subsection (g) of Section
9.03.
4. The "Engagement Period," as used herein, shall begin on the effective
date of this Agreement, but shall not end on a date certain. Rather,
the Engagement Period shall extend for such period of time as shall be
necessary and appropriate to complete all the actions
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contemplated by Section 9.03 of the Trust Agreement, including the
closing of the sale of the Properties as contemplated therein. Without
limiting the foregoing, the Engagement Period shall include the
one-year period contemplated by subsection (g) of Section 9.03, the
30-day notice period related to the public auction contemplated by such
subsection (g) and such additional period as may be necessary to close
the sale of the Properties, all as applicable under the circumstances
in accordance with Section 9.03. In any event, the Engagement Period
shall end and this Agreement shall terminate upon the closing of the
sale of the Properties (or upon completion of the public auction, if no
offers are received therein), unless earlier terminated in accordance
herewith.
5. Immediately upon execution of this Agreement, Albrecht shall begin
compiling and evaluating all necessary engineering and other data
related to the Properties and preparing appropriate marketing materials
using such data, and shall distribute such marketing materials to
potential buyers as soon as possible. Albrecht shall establish and
maintain, at its office in Houston, Texas, a data room containing
additional data related to the Properties, and shall make appropriate
arrangements for visits to the data room by interested potential
buyers.
6. Albrecht shall provide written status reports to the Trustee not less
frequently than weekly, and shall provide additional written and oral
reports to the Trustee as Albrecht may deem advisable and appropriate,
or as the Trustee may reasonably request. Albrecht's principals, Robert
A. Albrecht and Harrison Williams, shall each be actively involved in
rendering the services required to be rendered by Albrecht under this
Agreement, and each of them shall meet with the Trustee at the offices
of the Trustee or its counsel in Dallas, Texas as often as reasonably
requested by the Trustee. At a minimum, such principals shall make an
in-person presentation to the Trustee at such offices to present and
discuss in detail each offer received, and to answer any questions the
Trustee may have with respect to such offer.
7. Albrecht shall provide such information and assistance as is necessary
to enable the Trustee to fully understand and evaluate each offer
received and to prepare an appropriate response thereto. Albrecht shall
assist the Trustee with all aspects of negotiations with persons who
have made offers to purchase the Properties.
8. Albrecht shall render, in the circumstances and at the times
contemplated by Section 9.03 of the Trust Agreement, the opinions, in
forms satisfactory to the Trustee, as to the fairness of any offers to
purchase the Properties to the Unitholders of the Trust from a
financial point of view.
9. Albrecht shall assist the Trustee in negotiating the final terms and
conditions of the sale of the Properties and in closing the
transaction.
10. Subject to the terms of Section 11 below, Albrecht shall be entitled to
and shall receive the fee described in this Section 10 if the
Properties are sold to any person, corporation,
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partnership, company or any entity whatsoever during the Engagement
Period; and the Trustee, on behalf of the Trust, agrees that the Trust
shall pay to Albrecht a fee equal to 1% of the total aggregate sales
price received by the Trust for the Properties during the Engagement
Period. Such fee shall be paid at, and contingent upon, the closing of
the sale of the Properties.
For example, if the aggregate sales price is $4,000,000 (four million
dollars), Albrecht shall receive a fee of $40,000 (forty thousand
dollars). If the aggregate sales price is $10,000,000 (ten million
dollars), Albrecht shall receive a fee of $100,000 (one hundred
thousand dollars).
11. Although Albrecht shall be the exclusive agent for this sale during the
Engagement Period, it is expressly agreed that Albrecht has no
authority to commit the Trust or the Trustee to accept any offer
whatsoever for the Properties, and Albrecht shall be entitled only to a
reduced fee if the Trustee elects to reject all offers for any reason
whatsoever and the Properties are sold at public auction as
contemplated by the final two sentences of subsection (g) of Section
9.03 of the Trust Agreement. In that event, Albrecht shall be entitled
to receive from the Trust a fee equal to 0.5% of the total aggregate
sales price received by the Trust for the Properties in the auction,
which fee shall be paid at, and contingent upon, the closing of the
sale of the Properties, and shall not be entitled to any fee under
Section 10 above with respect to such Properties.
If a portion of the Properties is sold pursuant to a negotiated bid and
a portion at public auction, then Albrecht shall be entitled to a fee
calculated in accordance with Section 10 above with respect to the
Properties sold pursuant to the negotiated bid and a fee calculated in
accordance with this Section 11 with respect to the Properties sold at
public auction.
12. Other than the fee described in Section 10 or Section 11 above, as
applicable, Albrecht shall not be entitled to and shall not receive any
compensation or expense reimbursement whatsoever from the Trust or the
Trustee.
13. In addition to the services specifically provided for herein, Albrecht
shall provide such other assistance and advisory services as are normal
and customary for similar transactions and as may be mutually agreed by
Albrecht and the Trustee, and Albrecht shall not be entitled to any
compensation for such other services other than the fee provided for in
Section 10 or Section 11 above, as applicable. All actions taken by
Albrecht in connection with this Agreement shall be subject to the
approval of the Trustee.
14. This Agreement may be terminated by the Trustee without liability or
continuing obligation of the Trust or the Trustee immediately upon any
breach of this Agreement by Albrecht or any failure by Albrecht
diligently to perform its duties hereunder. In the event of such a
termination, Albrecht shall not be entitled to the fee described in
Section 10 or Section 11 above or any other compensation or
reimbursement whatsoever.
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15. Albrecht shall indemnify and hold harmless the Trust and the Trustee
and their affiliates against any losses, costs, damages, liabilities
and claims arising out of or based upon misstatements or
misrepresentations made by Albrecht or any willful misconduct,
recklessness, gross negligence or negligence on the part of Albrecht,
and Albrecht shall reimburse the Trust and the Trustee and their
affiliates for any legal or other expenses reasonably incurred in
connection with investigating or defending such loss, cost, damage,
liability or claim.
The Trust shall indemnify and hold harmless Albrecht and its affiliates
against any losses, costs, damages, liabilities and claims arising out
of or based upon misstatements or misrepresentations made by the Trust
or the Trustee or any willful misconduct, recklessness, gross
negligence or negligence on the part of the Trust or the Trustee, and
the Trust shall reimburse Albrecht and its affiliates for any legal or
other expenses reasonably incurred in connection with investigating or
defending such loss, cost, damage, liability or claim.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas without regard to principles of
conflicts of law.
17. This Agreement shall be binding upon the parties and their respective
successors and permitted assigns. Neither party may assign its rights
or obligations under this Agreement without the prior written consent
of the other party.
18. Albrecht acknowledges that the Trustee is acting for all purposes in
connection with this Agreement solely in its capacity as trustee of the
Trust, and the Trustee shall not be obligated to take any actions
except in such capacity and shall not have any personal liability
whatsoever.
19. The effective date of this Agreement is January 5, 1999.
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AGREED
ALBRECHT & ASSOCIATES, INC.
/s/ Robert A. Albrecht January 11, 1999
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Robert A. Albrecht Date
President
BURLINGTON RESOURCES COAL SEAM GAS
ROYALTY TRUST
By: NationsBank, N.A., Trustee
By: /s/ Ron E. Hooper January 11, 1999
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Ron E. Hooper, Vice President Date
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