<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
December 18, 1997
(as amended on March 2, 1998)
-----------------------------
Date of Report
(Date of earliest event reported)
COHO ENERGY, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Commission file number 0-22576
Texas 75-2488635
- ------------------------------ ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
14785 Preston Road, Suite 860
Dallas, Texas 75240
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 774-8300
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Public Accountants ..........................................F-1
Statements of Revenues and Direct Operating Expenses for the Years
Ended December 31, 1995, 1996 and 1997 and for the Nine Months
Ended September 30, 1997 ......................................................F-2
Notes to Statements of Revenues and Direct Operating Expenses .....................F-3
(b) Pro Forma Financial Information
Pro Forma Condensed Consolidated Financial Statements (Unaudited) .................P-1
Pro Forma Condensed Consolidated Balance Sheet as of September 30, 1997 ...........P-2
Pro Forma Condensed Consolidated Statement of Earnings for the Year Ended
December 31, 1996 .............................................................P-3
Pro Forma Condensed Consolidated Statement of Earnings for the Nine Months Ended
September 30, 1997 ............................................................P-4
Notes to Pro Forma Condensed Consolidated Financial Statements ....................P-5
</TABLE>
<PAGE> 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of
Coho Energy, Inc.:
We have audited the accompanying statements of revenues and direct
operating expenses of the Amoco Property Acquisition (see Note 1) for the years
ended December 31, 1995, 1996 and 1997 and for the nine months ended September
30, 1997. These financial statements are the responsibility of the management of
Coho Energy, Inc. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such statements present fairly, in all material
respects, the revenues and direct operating expenses of the Amoco Property
Acquisition described in Note 1 for the years ended December 31, 1995, 1996 and
1997 and for the nine months ended September 30, 1997 in conformity with
generally accepted accounting principles.
Dallas, Texas
March 2, 1998
F-1
<PAGE> 4
AMOCO PROPERTY ACQUISITION
STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES
For the Years Ended December 31, 1995, 1996 and 1997
and for the Nine Months Ended September 30, 1997
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
Year Ended December 31, September 30,
------------------------------- -----------------
1995 1996 1997 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
OPERATING REVENUES
Oil and gas production $16,636 $27,736 $43,017 $32,040
DIRECT OPERATING EXPENSES
Oil and gas operating 6,651 7,425 16,338 12,205
------- ------- ------- -------
EXCESS OF REVENUES OVER
DIRECT OPERATING EXPENSES $ 9,985 $20,311 $26,679 $19,835
======= ======= ======= =======
</TABLE>
See Notes to Statements of Revenues and Direct Operating Expenses.
F-2
<PAGE> 5
AMOCO PROPERTY ACQUISITION
NOTES TO STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES
(1) BASIS OF PRESENTATION -
On December 18, 1997, Coho Energy, Inc. (the "Company"), through its
indirect wholly owned subsidiary Coho Oil & Gas, Inc. ("Coho Oil"), acquired
from Amoco Production Company ("Amoco") interests in certain crude oil and
natural gas properties (the "Amoco Property Acquisition") located in southern
Oklahoma for cash consideration of approximately $257.5 million and warrants to
purchase one million shares of common stock of the Company at $10.425 per share
for a period of five years. The acquired properties (the "Amoco Properties") are
in more than 25,000 gross acres concentrated in southern Oklahoma, including 14
major producing oil fields. Approximately $70 million of the acquisition cost is
attributable to unproved properties.
Coho Oil is a wholly owned subsidiary of Coho Resources, Inc. ("Coho
Resources"), which is in turn a wholly owned subsidiary of Coho Energy, Inc.
Approximately $221 million of the acquisition was financed under Coho Resources'
existing bank credit facility and the remaining $36.5 million was funded from
working capital.
The accompanying statements of revenues and direct operating expenses
include revenues and direct operating expenses for the acquired properties for
the periods such properties were owned by Amoco. Certain of the properties in
the Amoco Property Acquisition were acquired by Amoco in March 1997 and
therefore only the revenues and direct operating expenses from March 1, 1997
through December 31, 1997 are included in such statements. See Note 2 for pro
forma information.
The accompanying statements of revenues and direct operating expenses
do not include general and administrative expense, interest income or expense, a
provision for depreciation, depletion and amortization or any provision for
income taxes because the property interests acquired represent only a portion of
a business and the costs incurred by the sellers of the properties are not
necessarily indicative of the costs to be incurred by the Company.
Historical financial information reflecting financial position, results
of operations and cash flows of the Amoco Property Acquisition is not presented
because all of the acquisition cost was assigned to the oil and gas property
interests. Accordingly, the historical statements of revenues and direct
operating expenses have been presented in lieu of the financial statements
required under Rule 3-05 of Securities and Exchange Commission Regulation S-X.
(2) ACQUISITION OF ADDITIONAL INTERESTS IN THE AMOCO PROPERTIES
In March 1997, Amoco acquired interests in certain southern Oklahoma
crude oil and natural gas properties which were subsequently sold to the Company
in December 1997 in the Amoco Property Acquisition transaction discussed above.
The revenues and direct operating expenses for such properties for the period
from March 1, 1997 through December 31, 1997 are included in the audited
statements of revenues and direct operating expenses for the Amoco Property
Acquisition.
F-3
<PAGE> 6
AMOCO PROPERTY ACQUISITION
NOTES TO STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES (Continued)
The following unaudited pro forma information for the years ended
December 31, 1996 and 1997 and for the nine months ended September 30, 1997 have
been prepared assuming the acquisition of such interests had consummated
immediately prior to each of the periods presented (in thousands):
<TABLE>
<CAPTION>
For the Nine
For the Year Ended Months Ended
December 31, September 30,
------------------- -------------
1996 1997 1997
------- ------- -------
<S> <C> <C> <C>
Operating revenues $44,878 $46,298 $35,321
Direct operating expenses 16,130 17,947 13,814
------- ------- -------
Excess of revenues over direct
operating expenses $28,748 $28,351 $21,507
======= ======= =======
</TABLE>
(3) SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (UNAUDITED) -
Estimated Quantities of Proved Oil and Gas Reserves
The estimates of proved oil and gas reserves utilized in the
preparation of the financial statements were estimated by independent petroleum
engineers in accordance with guidelines established by the Securities and
Exchange Commission and the Financial Accounting Standards Board, which require
that reserve reports be prepared under existing economic and operating
conditions. The Company emphasizes that reserve estimates of new discoveries or
undeveloped properties are more imprecise than those of producing oil and gas
properties. Accordingly, these estimates are expected to change as future
information becomes available.
PROVED OIL AND GAS RESERVES AS OF DECEMBER 31, 1997:
<TABLE>
<CAPTION>
Oil (MBbls) Gas (MMcf)
----------- ----------
<S> <C> <C>
Proved Reserves 53,358 32,616
====== ======
Proved Developed Reserves 27,231 21,361
====== ======
</TABLE>
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil
and Gas Reserves
The following standardized measure of discounted future net cash flows was
computed in accordance with the rules and regulations of the Securities and
Exchange Commission and Financial Accounting Standards Board Statement No. 69
using year-end prices and costs. Royalty deductions were based on laws,
regulations and contracts existing at the end of each period. No values are
given to unproved properties or to probable reserves that may be recovered from
proved properties.
The inexactness associated with estimating reserve quantities, future
production and revenue streams and future development and production
expenditures, together with the assumptions applied in valuing future
F-4
<PAGE> 7
AMOCO PROPERTY ACQUISITION
NOTES TO STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES (Continued)
production, substantially diminishes the reliability of this data. The values so
derived are not considered to be an estimate of fair market value. The Company
therefore cautions against its simplistic use.
STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS BEFORE INCOME TAXES AT
DECEMBER 31, 1997 (in thousands):
<TABLE>
<S> <C>
Future Cash Inflows $ 917,281
Future Costs:
Production (361,304)
Development (41,186)
---------
Future Net Cash Flows 514,791
10% Discount Factor (275,986)
---------
Standardized Measure of Discounted Future
Net Cash Flows before Income Taxes $ 238,805
=========
</TABLE>
Estimated December 31, 1997 average realized price:
<TABLE>
<S> <C>
$/Bbl ........................................ $ 15.88
$/Mcf ........................................ $ 2.15
</TABLE>
F-5
<PAGE> 8
COHO ENERGY, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
The accompanying Pro Forma Condensed Consolidated Financial Statements
have been prepared by recording pro forma adjustments to the historical
consolidated financial statements of Coho Energy, Inc. and subsidiaries (the
"Company"). The Pro Forma Condensed Consolidated Balance Sheet as of September
30, 1997 has been prepared as if the Amoco Property Acquisition and the
Offerings discussed in Note 1 were consummated on September 30, 1997. The Pro
Forma Condensed Consolidated Statements of Earnings for the year ended December
31, 1996 and for the nine months ended September 30, 1997 have been prepared as
if the Amoco Property Acquisition was consummated immediately prior to January
1, 1996 and January 1, 1997, respectively.
The Pro Forma Condensed Consolidated Financial Statements are not
necessarily indicative of the financial position or results of operations that
would have occurred had the transaction been effected on the assumed dates.
Additionally, future results may vary significantly from the results reflected
in the Pro Forma Condensed Consolidated Statements of Earnings due to normal
production declines, changes in oil and gas prices, future transactions and
other factors. These statements should be read in conjunction with the Company's
audited consolidated financial statements and the related notes included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996 and
the Company's condensed consolidated financial statements and the related notes
included in the Company's quarterly report on Form 10-Q for the nine months
ended September 30, 1997.
P-1
<PAGE> 9
COHO ENERGY, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
September 30, 1997
(in thousands, except share amounts)
<TABLE>
<CAPTION>
Pro Forma Adjustments
------------------------------
The Amoco Property
Historical Offerings(a) Acquisition(b) Pro Forma
---------- ------------ -------------- ---------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,245 $ 48,956 $ (38,355) $ 11,846
Accounts receivable, principally trade 8,322 8,322
Deferred income taxes and other non current assets 1,924 1,924
--------- --------- --------- ---------
11,491 48,956 (38,355) 22,092
PROPERTY AND EQUIPMENT, at cost net of
accumulated depletion and depreciation, based
on full cost accounting 251,441 267,745 519,186
OTHER ASSETS 2,193 4,383 6,576
--------- --------- --------- ---------
$ 265,125 $ 53,339 $ 229,390 $ 547,854
========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable, principally trade $ 7,705 $ 7,705
Accrued liabilities and other payables 8,121 1,300 9,421
Current portion of long-term debt 38 38
--------- --------- --------- ---------
15,864 0 1,300 17,164
LONG TERM DEBT excluding current portion 144,791 4,116 221,000 369,907
OTHER NONCURRENT LIABILITIES -- 3,700 3,700
DEFERRED INCOME TAXES 17,699 17,699
SHAREHOLDERS' EQUITY
Preferred stock, par value $0.01 per share
Authorized 10,000,000 shares, none issued -- --
Common stock, par value $0.01 per share
Authorized 50,000,000 shares, Issued and
outstanding 20,465,330 shares; Pro Forma -
25,465,330 shares 205 50 255
Additional paid-in capital 84,234 49,173 3,390 136,797
Retained earnings 2,332 2,332
--------- --------- --------- ---------
Total shareholders' equity 86,771 49,223 3,390 139,384
--------- --------- --------- ---------
$ 265,125 $ 53,339 $ 229,390 $ 547,854
========= ========= ========= =========
</TABLE>
See Notes to Pro Forma Condensed Consolidated Financial Statements.
P-2
<PAGE> 10
COHO ENERGY, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited)
For the Year Ended December 31, 1996
(in thousands, except share amounts)
<TABLE>
<CAPTION>
Pro Forma Adjustments
----------------------------
Amoco Property
Historical Acquisition (c) Other Pro Forma
---------- --------------- ----- ---------
<S> <C> <C> <C>
OPERATING REVENUES
Oil and gas production $ 54,272 $ 44,878 $ 99,150
------------ ------------ --------
OPERATING EXPENSES
Direct operating expenses 13,875 16,130 30,005
General and administrative 7,264 1,200(d) 8,464
Depletion and depreciation 16,280 10,442(e) 26,722
------------ ------------ --------
Total operating expenses 37,419 16,130 65,191
------------ ------------ --------
OPERATING INCOME 16,853 28,748 33,959
------------ ------------ --------
OTHER INCOME AND EXPENSES
Interest and other income 1,012 1,012
Interest expense (8,476) (16,686)(f) (25,162)
------------ --------
(7,464) (24,150)
------------ --------
EARNINGS FROM OPERATIONS
BEFORE INCOME TAXES 9,389 9,809
INCOME TAX PROVISION 3,483 159(g) 3,642
------------ --------
NET EARNINGS $ 5,906 $ 6,167
============ ========
EARNINGS PER COMMON
SHARE $ 0.29 $ 0.30
============ ========
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING 20,457,398 20,457,398
============ ==========
</TABLE>
See Notes to Pro Forma Condensed Consolidated Financial Statements.
P-3
<PAGE> 11
COHO ENERGY, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited)
For the Nine Months Ended September 30, 1997
(in thousands, except share amounts)
<TABLE>
<CAPTION>
Pro Forma Adjustments
-----------------------------
Amoco Property
Historical Acquisition(c) Other Pro Forma
---------- -------------- ----- ---------
<S> <C> <C> <C>
OPERATING REVENUES
Oil and gas production $ 45,506 $ 35,321 $ 80,827
------------ ------------ --------
OPERATING EXPENSES
Direct operating expenses 11,641 13,814 25,455
General and administrative 5,048 900(d) 5,948
Depletion and depreciation 14,072 8,207(e) 22,279
------------ ------------ --------
Total operating expenses 30,761 13,814 53,682
------------ ------------ --------
OPERATING INCOME 14,745 21,507 27,145
------------ ------------ --------
OTHER INCOME AND EXPENSES
Interest and other income 169 169
Interest expense (7,396) (12,116)(f) (19,512)
------------ --------
(7,227) (19,343)
------------ --------
EARNINGS FROM OPERATIONS
BEFORE INCOME TAXES 7,518 7,802
INCOME TAX PROVISION 2,932 108(g) 3,040
------------ --------
NET EARNINGS $ 4,586 $ 4,762
============ ========
EARNINGS PER COMMON
SHARE $ 0.22 $ 0.23
============ ========
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING 21,143,059 21,143,059
============ ==========
</TABLE>
See Notes to Pro Forma Condensed Consolidated Financial Statements.
P-4
<PAGE> 12
COHO ENERGY, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION -
On December 18, 1997, the Company, through its indirect wholly owned
subsidiary Coho Oil & Gas, Inc. ("Coho Oil"), acquired from Amoco Production
Company interests in certain crude oil and natural gas properties (the "Amoco
Property Acquisition") located in southern Oklahoma for cash consideration of
approximately $257.5 million and warrants to purchase one million shares of
common stock of the Company at $10.425 per share for a period of five years. The
acquired properties are in more than 25,000 gross acres concentrated in southern
Oklahoma, including 14 major producing oil fields. Approximately $70 million of
the acquisition cost is attributable to unproved properties.
On October 3, 1997, the Company issued 5 million shares of common stock
at $10.50 per share and issued $150 million of 8 7/8% senior subordinated notes
due 2007 pursuant to two public offerings (the "Offerings") with combined net
proceeds of approximately $193.7 million. The Company repaid the outstanding
borrowings of $144.8 million under its existing bank credit facility from the
net proceeds. $36.5 million of the remaining net proceeds and $221 million of
new borrowings under the existing bank credit facility were used to finance the
Amoco Property Acquisition.
The accompanying Pro Forma Condensed Consolidated Balance Sheet at
September 30, 1997, has been prepared assuming the Amoco Property Acquisition
and the Offerings had been consummated on September 30, 1997. The Pro Forma
Condensed Consolidated Statements of Earnings for the year ended December 31,
1996 and the nine months ended September 30, 1997, have been prepared assuming
the Company had consummated the Amoco Property Acquisition immediately prior to
each of the periods presented. Certain of the properties acquired in the Amoco
Property Acquisition were acquired by Amoco in March 1997. The Pro Forma
Statements of Earnings for both periods include the revenues and direct
operating expenses for the periods prior to Amoco's ownership of such
properties.
The Pro Forma Condensed Consolidated Statements of Earnings are not
necessarily indicative of the results of operations had the Amoco Property
Acquisition occurred on the assumed dates.
(2) PRO FORMA ADJUSTMENTS -
Pro forma adjustments necessary to adjust the Condensed Consolidated
Balance Sheet and Statements of Earnings are as follows:
(a) To record the increase in cash, the increase in debt issue costs in
other noncurrent assets, the net increase in long term debt and the
increase in equity related to the Offerings.
(b) To record the Amoco Property Acquisition, including approximately $1.9
million of transaction costs and $5 million of assumed liabilities.
The existing bank credit facility was used to finance $221 million of
the purchase price and the remaining purchase price of $36.5 million,
as well as transaction costs, was funded from working capital. The
estimated fair market value for the warrants was $3.4 million.
P-5
<PAGE> 13
COHO ENERGY, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) - Continued
(c) To record revenues and direct operating expenses of the Amoco Property
Acquisition, based on the statements of revenues and direct operating
expenses for the year ended December 31, 1996 and for the nine months
ended September 30, 1997, as adjusted to include the revenues and
direct operating expenses attributable to the properties acquired by
Amoco in March 1997 for periods prior to Amoco's ownership of such
properties. See Note 2 of the Statements of Revenues and Direct
Operating Expenses.
(d) To record the estimated increase in general and administrative expense
attributable to the Amoco Property Acquisition.
(e) To record estimated depreciation and depletion expense attributable to
the Amoco Property Acquisition using the unit-of-production method
applied to the net cost of the properties acquired (excluding $70
million related to unproved properties) plus future development costs
and abandonment costs associated with proved reserves.
(f) To record interest expense attributable to $221 million of bank debt
used to finance the Amoco Property Acquisition. Interest expense is
based upon the weighted average interest rate incurred by the Company
under its existing credit facility assuming the acquisition had been
funded at January 1 of each period.
(g) To record the tax effect of adjustments (c), (d), (e) and (f) above.
P-6
<PAGE> 14
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.
COHO ENERGY, INC.
(Registrant)
Date: March 2, 1998 By: s/n EDDIE M. LEBLANC, III
--------------------------------
Senior Vice President and
Chief Financial Officer
