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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 24, 1998
NEWFIELD EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-12534 72-1133047
(State or other jurisdiction (Commission file (I.R.S. employer
of incorporation or organization) number) identification number)
363 N. Sam Houston Parkway E.
Suite 2020
Houston, Texas 77060
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (281) 847-6000
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Item 5. Other Events
See the following press release by Newfield Exploration Company
announcing the acquisition of interests in nine oil and gas fields and
the increase of the Company's revolving credit facility to $225 million.
NEWFIELD COMPLETES GULF OF MEXICO ACQUISITION
FOR IMMEDIATE RELEASE
Houston, Texas (August 24, 1998) - NEWFIELD EXPLORATION COMPANY (NYSE-NFX)
today announced it has purchased interests in nine oil and gas fields,
comprised of interests in 13 offshore blocks, in the South Marsh Island, West
Cameron and High Island areas of the Gulf of Mexico, offshore Louisiana and
Texas, for approximately $60 million from an undisclosed seller. The newly
acquired fields are in proximity to Newfield's existing acreage position and
enhance the Company's operating presence in the Western Gulf of Mexico.
Newfield will operate all of the acquired properties and own working interests
ranging from 45% to 100%. Of the nine fields acquired, six are developed and
producing and three will be placed on line during the third and fourth
quarters of 1998. Because most of these fields are subject to a pre-existing
volumetric production payment, their contribution to 1998 production volumes
will not be significant. The average net daily production contribution in
1999 is, however, expected to be approximately 30 MMcfe, or in excess of 10%
of Newfield's total current net production. All of the acquired reserves are
natural gas. Newfield has hedged approximately one-third of estimated natural
gas production from the acquired properties under fixed price contracts at
average prices ranging from $2.30 to $2.35 per MMBtu for calendar years 1999
and 2000.
Newfield has identified several drilling opportunities that include proved,
probable and possible reserve targets and intends to initiate drilling on at
least two of those prospects during 1998.
The acquisition was funded with borrowings under the Company's revolving
credit facility, which has been increased to a $225 million facility. The
additional bank credit capacity may be used for general corporate and working
capital purposes including the acquisition, exploration and development of oil
and gas properties. Chase Bank of Texas, National Association, serves as
agent for the facility.
Newfield Exploration Company was founded in 1989. Its principal operations
are in the Gulf of Mexico and Gulf Coast area. In early 1998, Newfield was
the 11th leading operator of production and in 1997, it was the 9th most
active driller in the Gulf of Mexico.
Newfield Exploration Company For more information contact:
363 N. Sam Houston Parkway East, Ste. 2020 James P. Ulm, II
Houston, TX 77060 (281) 847-6000
(www.newfld.com)
Certain of the statements set forth in this press release regarding production
targets and planned capital expenditures and activities are forward looking
and are based upon assumptions and anticipated results that are subject to
numerous uncertainties. Actual results may vary significantly from those
anticipated due to many factors, including drilling results, oil and gas
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prices, industry conditions, the prices of goods and services, the
availability of drilling rigs and other support services and the availability
of capital resources. In addition, the drilling of oil and gas wells and the
production of hydrocarbons are subject to governmental regulations and
operating risks.
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Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired:
None
(b) Proforma financial information:
None
(c) Exhibits:
10.1 First Amendment to Amended and Restated Credit Agreement
dated as of August 20, 1998 among Newfield Exploration
Company as the Company, and The Chase Manhattan Bank as
Agent, and the Banks signatory thereto (without Exhibits)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Form 8-K to be signed on its behalf by the
undersigned thereunto duly authorized.
NEWFIELD EXPLORATION COMPANY
Date: August 28, 1998 By: /s/ Terry W. Rathert
Terry W. Rathert
Vice President-Planning and
Administration and Secretary
(Authorized Officer and Principal
Financial Officer)
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
------- -----------------------
<S> <C>
10.1 First Amendment to Amended and Restated Credit Agreement
dated as of August 20, 1998 among Newfield Exploration
Company as the Company, and The Chase Manhattan Bank as
Agent, and the Banks signatory thereto (without Exhibits)
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FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") dated as of August 20, 1998 is among: NEWFIELD EXPLORATION
COMPANY, a corporation formed under the laws of the State of Delaware (the
"Company"); each of the lenders that is a signatory hereto; and THE CHASE
MANHATTAN BANK (in its individual capacity, "Chase"), as agent for the Banks
(in such capacity, together with its successors in such capacity, the
"Agent").
R E C I T A L S
A. The Company, the Agent, and the Banks (as defined in the Credit
Agreement as hereafter defined) have entered into that certain Amended and
Restated Credit Agreement dated as of October 9, 1997 (the "Credit Agree-
ment"), pursuant to which the Banks have agreed to make certain loans and
extensions of credit to the Company upon the terms and conditions as provided
therein; and
B. The Company, the Agent, and the Banks now desire to make certain
amendments to the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration and the mutual benefits, covenants and agreements
herein expressed, the parties hereto now agree as follows:
1. All capitalized terms used in this Amendment and not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.
2. The definitions "Aggregate Maximum Credit Amounts," "Chase" and
"Principal Office" in Section 1.02 of the Credit Agreement are hereby amended
to read as follows:
"Aggregate Maximum Credit Amounts" at any time shall equal
$225,000,000, as the same may be reduced pursuant to Section 2.03(b) or
increased pursuant to Section 2.03(d).
"Chase" shall mean Chase Bank of Texas, National Association.
"Principal Office" shall mean the principal office of the Agent,
presently located at 712 Main Street, Houston, Texas 77002 or such
other location as designated by the Agent from time to time.
3. The table in the definition "Applicable Margin" in Section 1.02 of
the Credit Agreement is hereby amended to read as follows:
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Borrowing Base Greater than 30%
Utilization Less than or but less than or
Percentage equal to 30% equal to 60% Greater than 60%
- -------------- ------------ ---------------- ----------------
Eurodollar I II I II I II
.45% .5625% .625% .75% .975% 1.125%
Base Rate 0.00% 0.00% 0.00%
4. Section 1.02 of the Credit Agreement is hereby supplemented, where
alphabetically appropriate, with the addition of the following definitions:
"First Amendment" shall mean that certain First Amendment to
Amended and Restated Credit Agreement dated as of August 20, 1998,
among the Company, the Banks and the Agent.
5. Section 2.03(d) is hereby amended by changing $200,000,000 to
$250,000,000.
6. The table in Section 2.04(a) of the Credit Agreement is hereby
amended to read as follows:
Borrowing Base Greater than 30%
Utilization Less than or but less than or
Percentage equal to 30% equal to 60% Greater than 60%
- -------------- ------------ ---------------- ----------------
Commitment Fee 0.225% 0.275% 0.325%
Unavailable Fee 0.125% 0.125% 0.125%
7. The last sentence of Section 2.08(a) is amended to read as
follows:
"During the period from and after the date of the First Amendment
until the next Redetermination Date, the amount of the Calculated Borrowing
Base shall be $300,000,000."
8. Section 9.01 of the Credit Agreement is hereby amended by adding
the following clause (k):
"(k) Debt (as defined in clause (h) under the definition of
Debt) created by the KCS Production Payments as defined in Section
1.04 of the Purchase and Sale
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Agreement between Hall-Houston Oil Company and Newfield Exploration
Company dated August 11, 1998 covering the Property described on
Schedule 9.01(k) to the First Amendment."
9. Section 9.02 of the Credit Agreement is hereby amended by adding
the following clause (f):
"(f) Liens arising pursuant to the production payments
permitted by Section 9.01(k) and related mortgages and security
agreements covering the same Property covered by such production
payments."
10. Section 9.15 is hereby amended to read as follows:
"9.15 Sale of Oil and Gas Properties. Except for
Hydrocarbons sold in the ordinary course of business as and when
produced, the Company will not sell, assign, transfer, farm-out or
convey ("Transfer") any interest in any of its Oil and Gas
Properties in any calendar year in excess of $25,000,000 in the
aggregate as such value is determined by the most recent December
31, Reserve Report, using a 10% discount rate and giving effect to
production prior to the effective date of the Transfer, without
the prior written consent of Majority Banks, which consent will
not be unreasonably withheld."
11. Section 9.20 is hereby amended by inserting the following clause
at the end of the sentence and before the period:
", except for the documents creating the Liens permitted by
Section 9.02(f), but such restrictions shall apply only to the
Properties covered by the Liens."
12. Pursuant to Section 11.08 of the Credit Agreement, The Chase
Manhattan Bank hereby resigns as Agent and the Majority Banks hereby appoint
Chase Bank of Texas, National Association as Agent, effective as of the date
of this Amendment. In Section 11.04 all references to The Chase Manhattan Bank
shall henceforth be deemed to refer to Chase Bank of Texas, National
Association.
13. Section 12.04(a) is hereby amended by changing $200,000,000 to
$250,000,000.
14. The existing Annex 1 is hereby replaced with the Annex 1 attached
to this Amendment.
15. (a) On the terms and conditions set forth in this section,
effective on and as of the date of this Amendment ("Assignment Date"), the
Banks that are a party to the Credit Agreement before the date of this
Amendment (each an "Assignor") hereby sell, assign and transfer to the Banks
listed on Annex 1 hereto (each an "Assignee"), and the Assignees hereby
purchase and assume on a prorata basis based on the Percentage Shares set
forth on Annex 1 attached hereto from the Assignors, all of the rights and
obligations of the Assignors (each in its capacity as a "Bank") under the
Credit Agreement and the other Loan Documents in respect of the Maximum Credit
Amount of
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the Assignors, including, without limitation, any obligation to participate
pro rata in any LC Exposure, and to make Loans under the Maximum Credit Amount
and any right to receive payments for the Loans outstanding under the Maximum
Credit Amount assigned hereby ("Assigned Interest") plus the interest and fees
which will accrue from and after the Assignment Date. Such sale, assignment
and transfer is without recourse and, except as expressly provided in this
Agreement, without representation or warranty.
(b) Each Assignee agrees that such Assignee will, from and after the
Assignment Date, perform all of the obligations of the Assignor in respect of
its Percentage Share of the Assigned Interest. From and after the Assignment
Date: (a) each Assignor shall be released from its obligations in respect of
the Assigned Interest, and (b) each Assignee shall be entitled to all of the
Assignors' rights, powers and privileges under the Credit Agreement and the
other Loan Documents in respect of such Assignee's Percentage Share of the
Assigned Interest.
(c) On the Assignment Date each Assignee shall make such payments to
the Agent as the Agent directs so that the Banks listed on Annex 1 hereto
shall share in the outstanding Loans in proportion to their Percentage Shares.
(d) The Assignors and the Assignees agree that (i) each Assignor shall
be entitled to any payments of principal with respect to its share of the
Assigned Interest made prior to the Assignment Date, together with any
interest and fees with respect to its share of the Assigned Interest accrued
prior to the Assignment Date, (ii) each Assignee shall be entitled to any
payments of principal with respect to its share of the Assigned Interest
made from and after the Assignment Date, together with any and all interest
and fees with respect to its share of the Assigned Interest accruing from and
after the Assignment Date, and (iii) the Agent is authorized and instructed
to allocate payments received by it for account of each Assignor and Assignee
as provided in the foregoing clauses. Each party hereto agrees that it will
hold any interest, fees or other amounts that it may receive to which the
other party hereto shall be entitled pursuant to the preceding sentence for
account of such other party and pay, in like money and funds, any such
amounts that it may receive to such other party promptly upon receipt.
(e) Each Assignee (i) represents and warrants that it is legally
authorized to enter into this Amendment; (ii) confirms that it has received a
copy of the Credit Agreement, together with copies of the financial statements
referred to in Section 6.01, or if later, the most recent financial statements
delivered pursuant to Section 8.01 thereof, and such other documents and
information as it has deemed appropriate to make its own credit analysis;
(iii) agrees that it will, independently and without reliance upon the Agent,
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under the Credit Agreement; (iv) appoints and authorizes
the Agent to take such action as Agent on its behalf and to exercise such
powers under the Credit Agreement as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (v)
agrees that it will be bound by the provisions of the Credit Agreement and
will perform in accordance with its terms all the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Bank and
hereby makes the Bank representations set forth in Section 4.06(d) of the
Credit Agreement; and (vi) if the Assignee is organized under the laws of a
jurisdiction outside the United States, shall send to the Agent and the
Company the forms prescribed by the
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Internal Revenue Service of the United States and required pursuant to
Section 4.06(d) of the Credit Agreement certifying as to the Assignee's
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement or such other documents as
are necessary to indicate that all such payments are subject to such tax at a
rate reduced by an applicable tax treaty.
16. The Banks hereby appoint Bank of Montreal, First Union National
Bank and Societe Generale, Southwest Agency as Co-Agents. The Banks and the
Company agree that the Co-Agents shall have no duties or obligations in the
capacity of Co-Agents.
17. This Amendment shall become binding on the Banks when, and only
when, the Agent shall have received each of the following in form and
substance satisfactory to the Agent or its counsel:
(a) counterparts of this Amendment executed by the Company and
the Banks;
(b) receipt by the Agent of the fees required for this
Amendment;
(c) the Company shall have issued new Notes to the extent
necessary to reflect the Maximum Credit Amounts set forth on the new
Annex 1; and
(d) a Secretary's Certificate certifying the corporate
resolutions of the Company authorizing the increase in the Aggregate
Maximum Credit Amounts.
18. The parties hereto hereby acknowledge and agree that, except as
specifically supplemented and amended, changed or modified hereby, the Credit
Agreement shall remain in full force and effect in accordance with its terms.
19. The Company hereby reaffirms that as of the date of this
Amendment, the representations and warranties contained in Article VII of the
Credit Agreement are true and correct on the date hereof as though made on and
as of the date of this Amendment, except as such representations and
warranties are expressly limited to an earlier date.
20. THIS AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND
ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
21. This Amendment may be executed in two or more counterparts, and it
shall not be necessary that the signatures of all parties hereto be contained
on any one counterpart hereof; each counterpart shall be deemed an original,
but all of which together shall constitute one and the same instrument.
Delivery of an executed signature page of this Amendment by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof.
[SIGNATURES BEGIN NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of date first above written.
NEWFIELD EXPLORATION COMPANY
By: /s/ TERRY W. RATHERT
-------------------------
Name: Terry W. Rathert
Title: Vice President
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THE CHASE MANHATTAN BANK,
as resigning Agent
By: /s/ MARY JO WOODFORD
----------------------------------
Name: Mary Jo Woodford
Title: Vice President
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
individually and as successor Agent
By: /s/ RUSSELL A. JOHNSON
----------------------------------
Name: Russell A. Johnson
Title: Vice President
Lending Office for Base Rate and
Eurodollar Loans (Borrowing Notification,
Rate Setting Information and Relationship
Manager Information):
600 Travis, 20th Floor
Houston, Texas 77002
Telecopier No.: (713) 216-4147
Telephone No.: (713) 216-8882
Attention: Robert Mertensotto
Notices for Receipt and Payment of Funds:
Loan Syndication Services
1111 Fannin, 9th Floor MS 46
Houston, Texas 77002
Telecopier No.: (713) 750-3810
Telephone No.: (713) 750-2784
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BANK OF MONTREAL
By: /s/ MELISSA BAUMAN
--------------------------------
Name: Melissa Bauman
Title: Director
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ XAVIER RATOUIS
--------------------------------
Name: Xavier Ratouis
Title: Senior Vice President
FIRST UNION NATIONAL BANK
By: /s/ ROBERT R. WETTEROFF
--------------------------------
Name: Robert R. Wetteroff
Title: Senior Vice President
NATIONSBANK, N.A.
By: /s/ JAMES R. ALLRED
--------------------------------
Name: James R. Allred
Title: Senior Vice President
SOCIETE GENERALE
SOUTHWEST AGENCY
By: /s/ MARK A. COX
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Name: Mark A. Cox
Title: Director
Head of Houston Office
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BANKBOSTON, N.A.
By: /s/ TERRENCE RONAN
----------------------------------
Name: Terrence Ronan
Title: Director
FIRST NATIONAL BANK OF COMMERCE
By: /s/ DAVID R. REID
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Name: David R. Reid
Title: Senior Vice President
HIBERNIA NATIONAL BANK
By: /s/ TRUDY W. NELSON
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Name: Trudy W. Nelson
Title: Vice President
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