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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 23, 1997
SOUTHERN MINERAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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<S> <C> <C>
NEVADA 0-8043 36-2068676
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
500 Dallas, Suite 2800
Houston, Texas 77002-4708
(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code: (713) 658-9444
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 23, 1997, Southern Mineral Corporation (the "Company")
purchased a 22.5% working interest in two producing wells in Lake Raccourci
Field in LaFourche Parish, Louisiana from GPI Energy, Inc. for $5,400,000.
This summary is qualified in its entirety by the Company's November
24, 1997 press release concerning the above mentioned acquisition attached
hereto as an exhibit and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Acquired Business. Not applicable.
(b) Pro Forma Financial Information. Not applicable.
(c) Exhibits.
2.1 Letter Agreement, dated November 12, 1997, between Southern Mineral
Corporation and GPI Energy, Inc.
99.1 Press Release, dated November 24, 1997, announcing the acquisition of
oil and gas properties in Lake Raccourci Field, LaFourche Parish,
Louisiana.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SOUTHERN MINERAL CORPORATION
Date: December 5, 1997 By: /s/ JAMES H. PRICE
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James H. Price
Vice President-Finance
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INDEX TO EXHIBITS
EXHIBIT
NUMBER
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2.1 Letter Agreement, dated November 12, 1997, between Southern Mineral
Corporation and GPI Energy, Inc.
99.1 Press Release, dated November 24, 1997, announcing the acquisition of
oil and gas properties in Lake Raccourci Field, LaFourche Parish,
Louisiana.
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EXHIBIT 2.1
SOUTHERN MINERAL CORPORATION
500 DALLAS, SUITE 2800
HOUSTON, TEXAS 77002-4708
(713) 658-9444
November 11, 1997
Mr. Gary D. Purcell
GPI Energy, Inc.
2601 Augusta, Suite 12
Houston, Texas 77057
Re: Acquisition of Oil and Gas Properties
Lake Raccourci Field, LaFourche Parish, Louisiana
Dear Mr. Purcell:
Southern Mineral Corporation ("Buyer"), hereby agrees to buy the oil and gas
properties described in Exhibit A attached hereto (the "Properties"), from GPI
Energy, Inc. ("Seller"), who agrees to sell and assign the Properties subject
to the following term and conditions:
1. Purchase Price. The purchase price shall be $5,400,000.00.
2. Effective Date: The effective date shall be November 1, 1997.
3. Closing. Unless otherwise agreed, closing of this sale shall take
place at Buyer's offices on or before November 24, 1997. At closing the
following shall occur:
(a) Seller shall deliver to Buyer an assignment and shall further
deliver to Buyer such other state and federal assignments as are necessary to
accomplish the intent of this agreement;
(b) Seller shall deliver to Buyer a settlement statement at
closing that shall set forth the parties' best estimate of the adjustments
described in Section 5 hereafter;
(c) Seller shall deliver letters in lieu of transfer orders in
form satisfactory to Buyer;
(d) Buyer shall deliver to Seller, by cashier's check or wire
transfer an amount equal to the purchase price, as adjusted in accordance with
the settlement statement described in Section 3.(b) above;
(e) Buyer and Seller agree to deliver, each to the other, any
other documents, instruments or writings necessary to accomplish the intent of
this agreement.
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Mr. Gary D. Purcell
November 11, 1997
Page 2
4. Seller's Representations and Buyer Due Diligence. Seller represents
that the working interests and net revenue interests for the Properties are as
set forth on Exhibit A. After execution hereof, Seller shall make available to
Buyer all of its files and records relating to the Properties. Buyer may
conduct such title and due diligence with respect to the Properties as it deems
necessary. On or before the closing of business on the third business day
prior to closing, Buyer shall submit to Seller a list of title defects, if any.
In the event that Buyer submits such a list or in the event any of the above
representations are false, then Seller and Buyer shall meet and in good faith
attempt to cure such defects or misrepresentations. If Seller determines that
it is unable to cure any of such defects, then Seller and Buyer shall meet and
in good faith attempt to agree on a reasonable purchase price adjustment. If
Buyer and Seller cannot reach such agreement, then either Buyer or Seller may
elect to terminate this agreement, in which event this agreement shall be of no
further force or effect. The representations set forth above shall not survive
closing.
5. Purchase Price Adjustments. All monies received from production sold
prior to the effective date will belong to Seller and all monies received from
production sold after the effective date will belong to Buyer. All expenses,
excise, severance, ad valorem and production taxes incurred prior to the
effective date will be the responsibility of Seller. Buyer will be responsible
for such items incurred after the effective date. If necessary, Seller shall
prepare and deliver to Buyer as soon as possible following closing, but in any
event before ninety (90) days after the closing, a statement setting forth the
adjustments described.
6. Buyer and Seller agree that there are no gas or condensate imbalances
as of the Effective Date, and should any be found, the Purchase Price shall be
adjusted accordingly.
7. Miscellaneous.
(a) Investment Knowledge. Buyer is an experienced and
knowledgeable investor in the oil and gas business. Buyer acknowledges that
Buyer was provided opportunity to review Seller's records and information and
conduct visits to the Properties prior to offering to purchase the Properties.
Buyer is purchasing the Properties solely on Buyer's own independent
evaluation, investigation, analysis, verification and judgment, without relying
on statements of Seller, its employees, agents, officers, directors or
representatives.
(b) Confidentiality. Seller acknowledges that Buyer is a publicly
held company and has certain responsibilities and duties as to disclosure.
However, Buyer agrees to keep terms of this agreement confidential and not to
disclose the Purchase Price or the name of Seller if Buyer chooses to announce
that it has acquired an interest in the Properties. Furthermore, Buyer agrees
not to disclose the terms of this agreement to any other working interest
owners in the Properties or to anyone else which Buyer is not obligated to do
so by nature of being a public company. Seller agrees to keep the terms of
this agreement confidential and not to disclose to anyone, including, but not
limited to, any working interest owners in the Properties, the terms of this
agreement.
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Mr. Gary D. Purcell
November 11, 1997
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(c) Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
its principles of conflicts of laws.
(d) Entire agreement. This agreement supersedes all prior
agreements between the parties (written and oral) and is intended as a complete
and exclusive statement of the terms of the agreement between the parties.
This agreement may be amended only by a written instrument duly executed by the
parties.
If this letter sets forth our understanding, please execute below no later than
5:00 p.m. CST on Wednesday, November 12, 1997, whereupon this letter shall
become a binding contract between us.
Very truly yours,
Southern Mineral Corporation
By: Steven H. Mikel
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Title: President
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ACCEPTED AND AGREED TO this
12th day of November 1997.
GPI Energy, Inc.
By: Gary Purcell
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Name: Gary Purcell
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Title: President
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EXHIBIT A
LAKE RACCOURCI FIELD
LAFOURCHE PARISH, LOUISIANA
Expense and Net Revenue Interest
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Expense Int. Net Revenue Int.
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State Lease 14284 Well No. 1 22.5% 15.430875%
State Lease 14589 Well No. 1 22.5% 15.750000%
Area of Mutual Interest 16.0323%
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EXHIBIT 99.1
CONTACT:
James H. Price
Vice President-Finance
(713) 658-9444
November 24, 1997
SOUTHERN MINERAL BUYS INTEREST IN LAKE RACCOURCI FIELD
AND ADDITIONAL INTEREST IN BIG ESCAMBIA CREEK FIELD
HOUSTON - Southern Mineral Corporation (NASDAQ/NM:SMIN) today announced that it
has purchased a 22.5% working interest in two producing wells in Lake Raccourci
Field in Lafourche Parish, Louisiana. Current gross production from the two
wells is 8.6 Mmcf per day. The Company anticipates the drilling of one
development well and one to two additional exploratory wells in 1998. The
wells are operated by Xplor Energy, Inc. located in The Woodlands, Texas.
The Company has also recently acquired additional working interest in eleven
producing wells in which it currently owns a working interest in the Big
Escambia Creek Field in Big Escambia County, Alabama. The Big Escambia Creek
Field is operated by Exxon Company, U.S.A.
The purchase price for both acquisitions combined was $8.0 million. Total
proved reserves of the Lake Raccourci and the Big Escambia acquisitions are
estimated to be 9.1 Bcfe net to the Company.
Southern Mineral Corporation is an oil and gas acquisition, exploration and
production company that owns interests in oil and gas properties located along
the Gulf Coast, Canada and Ecuador. The Company is listed on the NASDAQ
National Market under the symbol SMIN.
