SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT UNDER TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): May 21, 1996
Commission File Number: 0-25386
FRONTIER OIL EXPLORATION COMPANY
(Exact Name of Registrant as Specified in its Charter)
NEVADA 87-0504461
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3006 HIGHLAND DRIVE
SUITE 206
SALT LAKE CITY, UTAH 84106
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code:
(801) 486-5555
N/A
(Former name, former address, and formal fiscal year, if changed since
last report)
ITEM 5. OTHER EVENTS
On May 21, 1996, FX Energy, the operating name of Frontier Oil Exploration
Company (the "Company") entered into an agreement with the Polish Oil and Gas
Company ("POGC") to undertake the joint study (the "Joint Study") of a 6.25
million acre area in the Carpathian Mountains of southeastern Poland (the "Area
of Interest") in order to identify drillable hydrocarbon prospects. This
agreement and the designation of the Area of Interest are the result of an
earlier joint evaluation arrangement announced January 30, 1996.
The Joint Study is to be conducted in three separate stages, expected to be
completed within a year. In the first stage, the parties will define the most
promising target area of approximately 1.35 million acres in the Carpathian
Foredeep geologic province (the "Target Area"), based primarily on geochemistry
and regional geophysics. During the second stage, the parties will conduct a
detailed analysis of existing data contributed by POGC, supplemented by limited
reprocessing, to assess the Target Area's hydrocarbon potential and to develop a
geophysical model. During the final stage of the Joint Study, the parties will
review the existing data and may acquire new data where necessary to generate
drillable oil and gas prospects within the Target Area.
The Company is obligated to pay all costs incurred by the Joint Study for
technical research and analysis, including seismic data reprocessing, third
party data purchase, and laboratory analysis. The parties estimate that these
costs will be approximately $100,000. Each party will, at its own cost,
contribute such technical personnel to participate in the study as the
respective party deems appropriate to complete the goals of the Joint Study.
By June 1, 1997, the parties plan to submit a joint application to the
Bureau of Geological Concessions for an exploration license over designated
portions of the Target Area. The Company and POGC will share equally in new
concession rights that are obtained through this arrangement, except that if one
party elects not to proceed with an application for an exploration license over
a specific area, the other party may do so alone.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired. Not applicable.
(b) Pro forma financial information. Not applicable.
(c) Exhibits. The following exhibit is included as part of this report:
SEC
Exhibit Reference
Number Number Title of Document Location
10.01 10 Joint Study Agreement dated May This
21, 1996, between FX Energy Filing
(Frontier Oil Exploration
Company) and the Polish Oil and
Gas Company, including appendix,
relating to joint study of area
of interest.
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.
Dated: May 24, 1996 FRONTIER OIL EXPLORATION COMPANY
By:----------------------------------
/s/ David N. Pierce, President
JOINT STUDY AGREEMENT
This Agreement is made in two original copies and effective as of May 21, 1996
BETWEEN:
The Polish Oil and Gas Company ("POGC') having its offices at ul. Krucza 6/14,
Warsaw,Poland 00-537, represented by Dr. Witold Weil, Director, and Mr. Marek
Hoffmann, Director, Geonafta, and
FX Energy (Frontier Oil Exploration Company or "Frontier") having its offices at
3006 Highland Drive, Suite 206, Salt Lake City, Utah, USA, represented by Mr.
David N. Pierce, Chairman and Chief Executive Officer,
hereinafter referred to individually as a "Party" or collectively as the
"Parties".
The Parties hereby agree to the following:
1.The Parties will undertake a Joint Study (the 'Joint Study') within the scope
defined in Appendix I for the purpose of researching, investigating and
ultimately defining the potential for finding and developing commercial
quantities of hydrocarbons within the Area of Interest. The details of the
Joint Study necessary to achieve the purpose will be decided by the Operating
Committee. The Parties will produce at the end of the Joint Study Term a
final report detailing all relevant technical aspects of the Joint Study (the
"Final Technical Report"). The Joint Study Term will commence with the
execution of this agreement and will end on June 1, 1997, unless otherwise
agreed by the Parties. The Parties will act in good faith and use all
reasonable efforts to prepare the Final Technical Report to a standard
acceptable to both Parties.
2.The Area of Interest will comprise as depicted on the attached map, plus any
neighbouring blocks as may be selected by the Operating Committee and
approved by POGC.
3.An Operating Committee will be established consisting of two (2)
representatives of Frontier and two (2) representatives of POGC. Approval by
the Operating Committee will require the unanimous consent of all Operating
Committee representatives. The Operating Committee will hold its first
meeting within 20 working days of the date of this Agreement, and at that
meeting the Committee will establish and agree the following:
(a) The principles and procedures governing the Operating Committee's
functions;
(b) Determination and selection of the data required for the Study, its
availability and current location;
(c) The allocation of work in accordance with Appendix 1 and in particular
which Party will take leadership of each segment of the Study
Programme.
4.POGC will contribute the following to the Joint Study:
(a) All technical data and information which are necessary for the purpose
of the Joint Study and which are owned or controlled by POGC or its
affiliates.
(b) Experienced technical personnel to participate in the Joint Study. The
selection of such personnel and the amount of their time to be
dedicated to the Joint Study will be determined solely by POGC as it
deems appropriate to achieve the purpose of the Joint Study.
5.Frontier will contribute the following to the Joint Study:
(a) Payment of all costs and expenses incurred by the Joint Study for
technical research, data gathering and analysis as approved by the
Operating Committee. Such costs and expenses are anticipated to total
U.S. $100,000 in the aggregate, more or less, and could include, but
will not be limited to, seismic data reprocessing, data purchase (from
entities other than POGC and its affiliate), and laboratory analysis.
(b) Experienced technical personnel to participate in the Joint Study.
The selection of such personnel and the amount of their time to be
dedicated to the Joint Study will be determined solely by Frontier
as it deems appropriate to achieve the purpose of the Joint Study.
6. The cost of personnel involved in this Study will be borne by the Party
employing such individuals. Frontier acknowledges POGC's right to request
(such request not to be unreasonable) that key POGC experts participating in
the Study (maximum three (3)) assist Frontier employees at the Frontier
offices during certain phases of the Joint Study. The Operating Committee
will decide on the length of the visit, which will include a field trip to
the Overthrust Belt area of southwest Wyoming. All travel costs associated
with these visits will be borne by POGC, however, Frontier will provide U.S.
travel, meals and lodging for visiting POGC employees.
7. The following provisions will apply in respect of information and data
supplied or developed in accordance with this Agreement.
(a) Any data and information ("POGC Data") contributed to the Joint Study
by POGC will remain the sole property of POGC. For the purposes of
this Agreement, POGC Data shall mean geological data, including but not
limited to, logs, cuttings and core samples, geophysical data and maps
provided by POGC. POGC warrants that it has the right and authority to
provide the POGC Data under the terms stated herein.
(b) Subject to the provisions of Clause 7(a) any data and information
(other than POGC Data) acquired by Frontier in connection with the
performance of its obligations hereunder, or developed jointly
hereunder, and the Final Technical Report, will be the joint property
of Frontier and POGC.
(c) Subject to the provisions of Clause 7(e) below, Frontier agrees not to
disclose, sell, trade, loan, transfer or otherwise make the POGC Data
available to third Parties, other than its affiliates or consultants,
without the written permission of POGC. Frontier shall have the right
to make reproductions and adaptations of the POGC Data and to
distribute them internally or to its affiliates or consultants who will
also be bound by the confidentiality provisions of this Agreement.
(d) Neither Party shall disclose, sell, trade, loan, transfer or otherwise
make available the Final Technical Report other than to affiliates and
consultants (who shall sign a confidentiality agreement on the same
terms as are set forth herein) for four (4) years from the date of
execution hereof, without the written permission of the other Party.
(e) Neither party shall be bound by the obligations of non-disclosure
under this agreement with respect to any portion of the data and
information described in Clause 7(b) above, the Final Technical Report
which:
(i) is or becomes part of the public knowledge; or
(ii) becomes available to a Party from a third party to the extent
such information is received without obligation of secrecy or
restriction on use; or
(iii) is already in a Party's possession without restriction on use or
disclosure; or
(iv) is developed by a Party independent of this study.
(f) The confidentiality provisions of this Article shall terminate four (4)
years from the date of signing hereof.
(g) Notwithstanding any other provision to the contrary, either Party may
disclose all or any portion of the data and information described in
Clause 7(b) above and the Final Technical Report (including work in
progress).
(i) as required by law or by any stock exchange on which the shares
of a Party or an Affiliate of a Party are listed, or
(ii) to a bona fide prospective purchaser or assignee, or
(iii) to banks and their consultants where and to the extent such
disclosure is necessary in connection with financing
arrangements.
Any such disclosures shall be made only under written agreement of the
party to whom disclosure is made not to disclose for the period
specified above except as required by law.
8. (a) The parties shall not raise any claims against each other pertaining to
the Final Technical Report.
(b) The Parties exempt each other from liability, i.e. agree not to raise
any regressive claims in connection with any third party claims, in
particular claims for infringement of patent rights, copyright or
trade secret, as a result of the other Party or other persons and
entities which obtained access to the Final Technical Report either
directly or indirectly from the exempting Party, using the Final
Technical Report. The Parties agree to redress any loss or damage
resulting from third party claims caused by such other Party using the
Final Technical Report, or for the other Party making the Final
Technical Report available to such third party.
9. The Operating Committee will accept and approve the Joint Study not later
than April 1, 1997. The Operating Committee shall submit the Joint Study for
final approval by the respective managements of Frontier and POGC.
10.On or before June 1, 1997, Frontier and POGC will each elect to either:
(a) Prepare and submit a joint application to the Bureau of Geological
Concessions for an exploration license or licenses over all or
designated portions of the Target Area; or
(b) Terminate the Joint Study without applying for any license rights from
the Bureau of Geological Concessions. In this instance Frontier will,
within 30 working days of receipt of POGC's written request, return
all of the obtained original Data to POGC.
11. Upon termination of the Joint Study, if there is any portion of the Area of
Interest which is not the subject of a joint application by the Parties for
an exploration license, then, notwithstanding the obligations of
confidentiality set forth in Clause 7 hereof, either Party may make an
application to the Bureau of Geological Concessions for an exploration
license or licenses over one or more specific exploration targets within
such portion of the Target Area; provided that:
(a) If such application is made within one (1) year of the termination of
the Joint Study the Party making the application must do so alone (and
not jointly with any third party). However the Party making the
application must inform the other Party thirty (30) days prior to
making such an application that it intends to do so, and, if so
requested by the other Party, make a joint application with the other
Party on the same terms as provided for under this Agreement.
(b) If such application is made after one (1) year of the termination of
the Joint Study the Party making such application may do so jointly
with a third party subject to the provisions of the confidentiality
clause set forth in this Agreement.
(c) If such application is made by Frontier, then POGC will give its
written approval of such application and will otherwise give its full
support to such application.
12. If both Frontier and POGC elect to apply for an exploration license over
common blocks within the Area of Interest, then Frontier and POGC will enter
into a Joint Agreement for a joint application for the above mentioned
licence. Such Joint Agreement will include, among other things, the
following general principles:
(a) The parties will use their best efforts to develop work programmes and
other mutually agreeable tasks necessary for the bid.
(b) Frontier and POGC will form a Joint Venture company.
(c) The equity interests of the Parties will be Frontier 50% and POGC 50%
unless otherwise agreed by the Parties.
(d) All costs and expenses incurred for the preparation of the joint
bid(s), any signature bonus included in such joint bid(s), and any
subsequent joint operations on the awarded license area will be shared
by the parties in proportion to their respective equity interests.
13. If as a result of the Joint Study the Parties indicate areas within the
Area of Interest which are currently covered by POGC's exploration license,
then Frontier may make a proposal to POGC and POGC hereby consents to
negotiate in good faith terms to allow Frontier to farm in to the acreage.
14. Operations conducted in Poland shall be subject to the laws of Poland. All
matters which are not regulated by this Agreement shall be regulated by the
applicable regulations of Polish law. In the case of any disputes arising
among the parties in relation to this Agreement, the parties shall exert
every effort to achieve an amicable agreement. Any disputes that cannot be
resolved by amicable agreement shall be submitted to the Arbitration Court
at the Intemationales Schiedsgericht der Bundeskammer der Gewerblichen
Wirtschaft at 1045 Wien, Wiedner Hauptstrasse 63, Austria and shall be
resolved according to the UNICITRAL rules of arbitration. The provisions of
this Agreement relating to arbitration shall continue in force
notwithstanding the termination of this Agreement.
15. Any injury to POGC's employees or damage to or loss of POGC's property or
equipment arising in relation to this Agreement, shall be the loss of POGC,
and POGC hereby indemnifies and holds harmless Frontier from any claim or
responsibility for such damage or loss and waives its rights of recovery, if
any, against Frontier.
16. Any injury to Frontier employees or damage to or loss of Frontier's
property or equipment arising in relation to this Agreement, shall be the
loss of Frontier and Frontier hereby indemnifies and holds harmless POGC
from any claim or responsibility for such damage or loss and waives its
rights of recovery, if any, against POGC.
17. This Agreement states all the obligations of the Parties, embodies the
entire agreement and understanding between POGC and Frontier relative to the
subject matter hereof and supersedes all prior and contemporaneous
understandings, agreements, negotiations or discussions, oral or written,
between the Parties. This Agreement may not be amended, modified, varied or
supplemented except by a written instrument signed by both POGC and
Frontier.
18. Any notices to be served hereunder shall be in writing and may be delivered
by hand or by certified mail, confirmed by facsimile to the address set
forth below. Such notice shall be effective upon receipt.
FX Energy
Polish Oil and Gas Company Frontier Oil Exploration
Company 3006 Highland Drive, Suite 206
ul. Krucza 6/14 Salt Lake City, Utah 84106 USA
Warsaw, Poland 00-537 Attn: Andy Pierce,
Attn:Dr. Witold Weil Chief Operating Officer
Director of Exploration
& Production
Telephone: 48-2-628-2769 Telephone: 801-486-5555
Facsimile: 48-22-6235862 Facsimile: 801-486-5575
IN WITNESS whereof the Parties have caused this Agreement to be executed by
their duly authorised representatives the day month and year first above
written.
FX Energy Polish Oil and Gas Company
Frontier Oil Exploration Company
By: /s/ David N. Pierce By: /s/ Witold Weil
APPENDIX 1
JOINT STUDY SCOPE OF WORK
Proposal for Hydrocarbon Prospect Exploration in Mesozoic/Paleozoic Sediments
within the Carpathian Overthrust/Foredeep Area
The purpose of the Joint Study is to generate drillable hydrocarcon prospects
quickly, effeciently and at low cost; the Joint Study is not an academic study
and is not intended to be an exhaustive evaluation of all available data or of
the Area of Interest. Accordingly, the Joint Study is designed and will be
carried out in such a way as to quickly consider and either discard or evaluate
available data and existing commercial and academic studies; new data will be
acquired where it will confirm drillable prospects.
The Joint Study will be conducted in three separate but complementary stages:
Stage I studies will define the most promising Target Area (approximately
90x60km) within the Area of Interest (approximately 250x100km) using
geochemistry and regional geophysics.
Stage II will include detailed analysis of hydrocarbon potential within the
Target Area using all existing data and some limited reprocessing of
geophysics and well log data.
Stage III will generate drillable hydrocarbon prospects, using all
available geophysical data relevant to the particular prospect and
reprocessing such data where appropriate, and supplementing this data with
new data acquisitions where necessary.
STAGE I. REGIONAL STUDIES TO DEFINE A TARGET AREA.
The goal of Stage I, which is based primarily on geochemistry and regional
geophysics, is to define the main hydrocarbon migration fairways from the deep
"kitchen" toward the edges of the basins where hydrocarbon traps may exist at
economic depths.
A. Definition of Hydrocarbon Fairways
define "kitchen" hydrocarbon shows, accumulations
overpressured systems light hydrocarbon analysis
hydrogeochemistry migration patterns
B. Tectonic Framework
basement physico/chemistry
basement fabric, structures, faults
platforms, ancient river channels
Paleo/Mesozoic horizons, depths,thickness
Miocene base map
tectonic fabric of Paleo/Mesozoic sediments
C. Depositional Environments of Paleozoic/Mesozoic Sediments
lithologic characteristics of Paleozoic/Mesozoic beds
maps of most prospective reservoir rocks
The above analysis should allow the parties to select a Target Area of
approximately 90x60km, or approximately two concession blocks, for further
evaluation.
STAGE II. EVALUATION OF TARGET AREA HYDROCARBON POTENTIAL; DEVELOPMENT OF MODEL.
The goal of Stage II is to develop a geological play model of the Target Area,
with an understanding of structure and reservoir development, and migration and
trapping mechanisms.
A. Tectonics
basement: depth, configuration, physico/chemical properties,
tectonic fabric, accomodation zones
platform sediments: thickness, depth, faults, tectonic fabric,
accomodation zones, Cm, O, S, D, C, P, Tr, J, K
Miocene base map
mapping of platform ancient river channels and river deposits
B. Depositional Environments
lithology and distribution of potential reservoir beds
depth and thickness of potential reservoir beds
seal strata
STAGE III. PROSPECT DELINEATION
The goal of Stage III is to delineate "ready to drill" prospects. During this
phase all selected promising targets will be verified with reprocessing and
reanalysis of all pertinent geophysical data. When required, field acquisition
of new data will be conducted. The final result of this stage will be a
portfolio of drillable prospects with assessment of economic values and economic
risks.
MAP ATTACHED TO JOINT STUDY AGREEMENT
Description:
Map of Southeastern Poland indicating the location of
certain geological features and outlinine the study area
referred to in the Agreement.
