UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT 1934
For the quarterly period ended September 30, 1997
-----------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT 1934
For the transition period from to
--------------------- ----------------------
Commission File Number: 1-7940
-------------------------------------------------------
Goodrich Petroleum Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 76-0466913
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer ID. No.)
incorporation or organization)
5847 San Felipe, Suite 700, Houston, Texas 77057
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(713) 780-9494
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
None
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [ X ] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common shares outstanding as of November 3, 1997: 41,859,222
1
<PAGE>
GOODRICH PETROLEUM CORPORATION
FORM 10-Q
September 30, 1997
INDEX
Page No.
--------
PART 1 - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS.
Consolidated Balance Sheets
September 30, 1997 (Unaudited) and December 31, 1996............... 3-4
Consolidated Statements of Operations (Unaudited)
Nine Months Ended September 30, 1997 and 1996...................... 5
Three Months Ended September 30, 1997 and 1996..................... 6
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 1997 and 1996...................... 7
Consolidated Statements of Stockholders' Equity (Unaudited)
Nine Months Ended September 30, 1997 and 1996...................... 8
Notes to Consolidated Financial Statements............................ 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS. 11
PART II - OTHER INFORMATION 16
Item 1. LEGAL PROCEEDINGS.
Item 2. CHANGES IN SECURITIES.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Item 5. OTHER INFORMATION.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
2
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents ........................ $ 522,247 $ 344,551
Marketable equity securities ..................... 717,400 569,700
Accounts receivable
Trade and other, net of allowance .............. 1,329,057 744,221
Accrued oil and gas revenue .................... 1,824,452 1,482,503
Accrued pipeline joint venture ................. 258,000 532,000
Prepaid insurance ................................ 149,484 235,578
Other ............................................ 25,500 4,888
---------- ----------
Total current assets ..................... 4,826,140 3,913,441
---------- ----------
PROPERTY AND EQUIPMENT
Oil and gas properties (successful efforts method) 39,898,104 19,129,512
Furniture, fixtures and equipment ................ 173,276 107,056
---------- -----------
40,071,380 19,236,568
Less accumulated depletion, depreciation
and amortization ............................... (7,792,865) (4,918,856)
---------- -----------
Net property and equipment ................. 32,278,515 14,317,712
---------- -----------
OTHER ASSETS
Investment in pipeline joint venture, net......... 2,875,714 3,616,360
Deferred charges and other investments............ 264,241 551,471
---------- ----------
3,139,955 4,167,831
---------- ----------
TOTAL ASSETS......................... $40,244,610 $22,398,984
========== ==========
See notes to consolidated financial statements.
</TABLE>
3
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable................................ $ 3,032,827 $ 1,108,534
Accrued liabilities............................. 1,785,564 1,994,730
--------- ----------
Total current liabilities................. 4,818,391 3,103,264
--------- ----------
LONG TERM DEBT ................................... 19,000,000 10,000,000
OTHER LIABILITIES ................................... --- 160,520
STOCKHOLDERS' EQUITY
Series A convertible preferred stock, par value
$1.00 per share; authorized 10,000,000
shares; issued and outstanding 796,318 and
801,149 shares (liquidation preference $10
per share, aggregating to $7,963,180 and
$8,011,490).................................... 796,318 801,149
Series B convertible preferred stock, par value
$1.00 per share; authorized 10,000,000
shares; issued and outstanding 750,000
shares (liquidation preference $10 per
share, aggregating to $7,500,000).............. 750,000 ---
Common stock, par value - $0.20 per share;
authorized 100,000,000 shares; issued and
outstanding 41,859,222 and 41,804,510 shares... 8,371,845 8,360,902
Additional paid-in capital........................ 7,820,731 1,059,493
Accumulated deficit............................... (1,270,475) (896,444)
Unrealized loss on marketable equity securities... (42,200) (189,900)
---------- ----------
Total stockholders' equity................ 16,426,219 9,135,200
---------- ----------
TOTAL LIABILITIES AND STOCK-
HOLDERS' EQUITY.................... $40,244,610 $22,398,984
========== ==========
See notes to consolidated financial statements.
</TABLE>
4
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GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------
1997 1996
---- ----
<S> <C> <C>
REVENUES
Oil and gas sales............................. $ 8,342,881 5,454,441
Pipeline joint venture........................ 1,085,167 1,093,297
Other......................................... 408,389 459,218
---------- ----------
Total revenues.......................... 9,836,437 7,006,956
---------- ----------
EXPENSES
Lease operating expense and production taxes.. 1,644,768 1,145,016
Depletion, depreciation and amortization...... 3,850,957 2,681,208
Exploration................................... 1,055,160 953,095
Interest expense.............................. 1,065,148 611,447
General and administrative.................... 1,703,127 1,511,268
---------- ----------
Total costs and expenses................ 9,319,160 6,902,034
---------- ----------
INCOME BEFORE INCOME TAXES......................... 517,277 104,922
Income taxes ................................. --- ---
---------- ----------
NET INCOME ........................................ 517,277 104,922
Preferred stock dividends..................... 891,308 484,610
---------- ----------
LOSS APPLICABLE TO COMMON STOCK.................... $ (374,031) (379,688)
========== ==========
LOSS PER AVERAGE COMMON SHARE...................... (.01) (.01)
========== ==========
AVERAGE COMMON SHARES
OUTSTANDING................................... 41,825,983 41,804,510
========== ==========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
--------------------
1997 1996
--------------------
<S> <C> <C>
REVENUES
Oil and gas sales............................. $ 2,746,693 1,671,302
Pipeline joint venture........................ 266,166 267,396
Other......................................... 157,704 254,751
---------- ----------
Total revenues.......................... 3,170,563 2,193,449
---------- ----------
EXPENSES
Lease operating expense and production taxes.. 559,487 440,183
Depletion, depreciation and amortization...... 1,201,028 817,144
Exploration................................... 656,122 188,316
Interest expense.............................. 378,952 198,914
General and administrative.................... 613,730 437,856
---------- ----------
Total costs and expenses................ 3,409,319 2,082,413
---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES.................. (238,756) 111,036
Income taxes ................................. --- ---
---------- ----------
NET INCOME (LOSS).................................. (238,756) 111,036
Preferred stock dividends..................... 313,891 160,190
---------- ----------
LOSS APPLICABLE TO COMMON STOCK.................... $ (552,647) (49,154)
========== ==========
LOSS PER AVERAGE COMMON SHARE...................... $ (.01) ---
========== ==========
AVERAGE COMMON SHARES
OUTSTANDING ................................. 41,859,222 41,804,510
========== ==========
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
--------------------
1997 1996
--------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income....................................... $ 517,277 104,922
Adjustments to reconcile net income to
net cash provided by operating activities:
Depletion, depreciation and amortization....... 3,850,957 2,681,208
Amortization of leasehold costs................ 192,345 143,882
Amortization of deferred debt financing costs.. 27,694 55,713
Gain on sale of oil and gas properties......... (18) (95,252)
Capital expenditures charged to income......... 486,667 510,637
Payment of contingent liability................ (82,751) (11,713)
Payment of other liabilities................... (240,779) (295,552)
----------- ----------
4,751,392 3,093,845
Changes in current assets and liabilities
(exclusive of acquisition):
Accounts receivable............................ 375,373 239,529
Prepaid insurance and other.................... 77,150 118,691
Accounts payable............................... 1,924,293 (273,091)
Accrued liabilities............................ (151,618) (36,613)
----------- -----------
Net cash provided by operating activities... 6,976,590 3,142,361
----------- ----------
INVESTING ACTIVITIES
Proceeds from sales of oil and gas properties..... 370,000 325,629
Capital expenditures.............................. (6,019,396) (3,127,952)
Cash paid in connection with business combination. (9,250,540) (45,372)
----------- -----------
Net cash used in investing activities........ (14,899,936) (2,847,695)
----------- -----------
FINANCING ACTIVITIES
Proceeds from bank borrowings..................... 10,000,000 800,000
Principal payments of bank borrowings............. (1,000,000) (750,000)
Payment of debt financing costs................... --- (10,256)
Retirement of preferred stock..................... (7,650) (74,362)
Preferred stock dividends......................... (891,308) (484,610)
----------- -----------
Net cash provided by
(used in) financing activities.......... 8,101,042 (519,228)
----------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS.................................. 177,696 (224,562)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD............................... 344,551 613,450
----------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD.....................................$ 522,247 388,888
=========== ==========
</TABLE>
See notes to consolidated financial statements.
7
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Nine Months Ended September 30 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Series A Series B
Preferred Stock Preferred Stock Common Stock
-------------------- ------------------- ---------------------
Number Number Number
of Shares Par Value of Shares Par Value of Shares Par Value
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995. 734,859 $ 734,859 --- $ --- 41,804,510 $ 8,360,902
Net income................... --- --- --- --- --- ---
Unrealized appreciation of
marketable securities
available for sale......... --- --- --- --- --- ---
Preferred stock dividends.... --- --- --- --- --- ---
Retirement of preferred stock (10,000) (10,000) --- --- --- ---
Reinstatement of preferred
stock under appraisal
rights..................... 76,290 76,290 --- --- --- ---
-------- -------- ------- -------- ---------- ----------
Balance at September 30, 1996 801,149 $ 801,149 --- $ --- 41,804,510 $ 8,360,902
======== ======== ======= ======== ========== ==========
Balance at December 31, 1996. 801,149 $ 801,149 --- $ --- 41,804,510 $ 8,360,902
Net income................... --- --- --- --- --- ---
Unrealized appreciation of
marketable securities
available for sale......... --- --- --- --- --- ---
Issuance of Series B
Preferred Stock............ --- --- 750,000 750,000 --- ---
Preferred stock dividends.... --- --- --- --- --- ---
Conversion of preferred stock
to common stock........... (3,831) (3,831) --- --- 23,944 4,789
Employee stock grants........ --- --- --- --- 30,768 6,154
Retirement of preferred stock (1,000) (1,000) --- --- --- ---
-------- -------- ------- -------- ---------- ----------
Balance at September 30, 1997 796,318 $ 796,318 750,000 $ 750,000 41,859,222 $ 8,371,845
======== ======== ======= ======== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Unrealized
Gain(Loss)on
Additional Marketable Total
Paid-In Accumulated Equity Stockholders'
Capital Deficit Securities Equity
---------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Balance at December 31, 1995 $1,200,140 $ (633,089) $ --- $ 9,662,812
Net income................... --- 104,922 --- 104,922
Unrealized appreciation of
marketable securities
available for sale......... --- --- 42,200 42,200
Preferred stock dividends.... --- (484,610) --- (484,610)
Retirement of preferred stock (64,362) --- --- (74,362)
Reinstatement of preferred
stock under appraisal
rights..................... (76,290) --- --- ---
---------- -------- --------- ----------
Balance at September 30, 1996 $1,059,488 $(1,012,777) $ 42,200 $ 9,250,962
========= ========== ========= ==========
Balance at December 31, 1996. $1,059,493 $ (896,444) $ (189,900) $ 9,135,200
Net income................... --- 517,277 --- 517,277
Unrealized appreciation of
marketable securities
available for sale......... --- --- 147,700 147,700
Issuance of Series B
Preferred Stock............ 6,750,000 --- --- 7,500,000
Preferred stock dividends.... --- (891,308) --- (891,308)
Conversion of preferred stock
to common stock........... (958) --- --- ---
Employee stock grants........ 18,846 --- --- 25,000
Retirement of preferred stock (6,650) --- --- (7,650)
--------- -------- --------- ----------
Balance at September 30, 1997 $7,820,731 $(1,270,475) $ (42,200) $ 16,426,219
========= ========== ========= ==========
</TABLE>
See notes to consolidated financial statements.
8
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997 and 1996
(Unaudited)
NOTE A - BASIS OF PRESENTATION
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to rules and regulations of the
Securities and Exchange Commission; however, the Company believes the
disclosures which are made are adequate to make the information presented not
misleading. The financial statements and footnotes included in this Form 10-Q
should be read in conjunction with the financial statements and notes thereto
included in the Company's annual report on Form 10-K for the year ended December
31, 1996.
In the opinion of the Company, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position of the Company as
of September 30, 1997 and the results of its operations for the nine and three
months ended September 30, 1997 and 1996.
The results of operations for the nine and three month periods ended September
30, 1997 are not necessarily indicative of the results to be expected for the
full year.
NOTE B - ACQUISITION OF OIL AND GAS PROPERTIES
On January 31, 1997, the Company acquired the oil and gas properties of La/Cal
Energy Partners II ("La/Cal II") and certain working interest owners for a
purchase price of $16.5 million ("La/Cal II Acquisition"). The purchase price
was comprised of $1.5 million cash, the assumption of $7.5 million of La/Cal II
long-term debt and the issuance of 750,000 shares of Series B convertible
preferred stock of the Company ("Series B Preferred Stock") with an aggregate
liquidation value of $7.5 million. In connection with the La/Cal II Acquisition,
the Company borrowed an additional $9 million under its bank credit facility,
which was used to repay $7.5 million of La/Cal II debt and to pay the $1.5
million cash portion of the purchase price. The Series B Preferred Stock has a
dividend rate of 8.25% per annum and each share of Series B Preferred Stock is
convertible into 8.92 shares of common stock. Such shares are redeemable by the
Company after January 31, 2001 at $10.00 per share.
NOTE C - COMMITMENTS AND CONTINGENCIES
The U.S. Environmental Protection Agency ("EPA") has identified the Company as a
potentially responsible party ("PRP") for the cost of clean-up of "hazardous
substances" at an oil field waste disposal site in Vermilion Parish, Louisiana.
The PRPs have estimated that the remaining cost of long-term clean-up of the
site will be approximately $3.5 million with the Company's percentage of
9
<PAGE>
responsibility to be approximately 3.05%. As of September 30, 1997, the Company
has paid approximately $211,000 in costs related to this matter and accrued an
additional $199,000 for the remaining liability. The EPA and PRPs will continue
to evaluate the site and revise estimates for the long-term clean-up of the
site. These costs have not been discounted to their present value. There can be
no assurance that the cost of clean-up and the Company's percentage
responsibility will not be higher than currently estimated. In addition, under
the federal environmental laws, the liability for costs related to the clean-up
of the site is borne jointly and severally among all PRPs. Therefore, the
ultimate cost of the clean-up to the Company could be significantly higher than
the amount presently accrued for this liability.
Additionally, the Company is party to a number of lawsuits arising in the normal
course of business. The Company has defended and intends to continue to defend
these actions vigorously and believes, based on currently available information,
that adverse results or settlements, if any, in excess of insurance coverage or
amounts already provided, will not be material to its financial position or
results of operations.
NOTE D - INCOME TAXES
No provision for income taxes has been recorded for the Company due to its
ability to utilize net operating loss carryforwards to offset financial taxable
income.
NOTE E - PRO FORMA FINANCIAL RESULTS OF OPERATIONS
Selected results of operations on a pro forma basis as if the acquisition
transactions had occurred on January 1, 1997 for the nine months ended September
30, 1997 and January 1, 1996 for the nine months ended September 30, 1996
follow:
For the nine months For the nine months
ended ended
September 30, 1997 September 30, 1996
------------------- -------------------
Revenues................... $ 10,357,543 10,144,544
Net income................. 751,761 749,405
Loss applicable to
common stock......... (191,110) (199,268)
Loss per average
common share........ $ --- ---
NOTE F - SUBSEQUENT EVENT
On October 16, 1997, the Company sold its 20% interest in an natural gas
pipeline joint venture. The adjusted sales price was $3,564,000 and the Company
expects to recognize a gain on the sale (both pre-tax and after-tax) in the
fourth quarter of approximately $700,000.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
1997 ACQUISITION
On January 31, 1997, the Company acquired the oil and gas properties of La/Cal
Energy Partners II ("La/Cal II") and certain working interest owners (the
"La/Cal II Properties") for a purchase price of $16.5 million ("La/Cal II
Acquisition"). The purchase price was comprised of $1.5 million cash, the
assumption of $7.5 million of La/Cal II long-term debt and the issuance of
750,000 shares of Series B convertible preferred stock of the Company ("Series B
Preferred Stock") with an aggregate liquidation value of $7.5 million. In
connection with the La/Cal II Acquisition, the Company borrowed an additional $9
million under its bank credit facility, which was used to repay $7.5 million of
La/Cal II debt and to pay the $1.5 million cash portion of the purchase price.
The Series B Preferred Stock has a dividend rate of 8.25% per annum and each
share of Series B Preferred Stock is convertible into 8.92 shares of common
stock. Such shares are redeemable by the Company after January 31, 2001 at
$10.00 per share.
CHANGES IN RESULTS OF OPERATIONS
Nine Months Ended September 30, 1997 Versus Nine Months Ended September 30,1996
Total revenues for the nine months ended September 30, 1997 amounted to
$9,836,000 and were $2,829,000 higher than the $7,007,000 for the nine months
ended September 30, 1996. Oil and gas sales were $2,888,000 higher due
substantially to increased revenues as a result of the La/Cal II Acquisition
(effective January 31, 1997) along with increased gas volumes on the
pre-acquisition properties.
The following table reflects the production volumes and pricing information for
the periods presented.
Nine months Nine months
ended September 30, 1997 ended September 30, 1996
---------------------------- ---------------------------
Production Average Price Production Average Price
---------- ------------- ---------- -------------
Gas (Mcf)......... 1,878,128 $ 2.41 1,194,704 $ 2.44
Oil (Bbls)........ 208,707 18.33 126,139 20.14
Lease operating expense and production taxes were $1,645,000 for the nine months
ended September 30, 1997, versus $1,145,000 for the nine months ended September
30, 1996, or $500,000 higher due primarily to the addition of the La/Cal II
Properties. Depletion, deprecation and amortization was $3,851,000 for the nine
11
<PAGE>
months ended September 30, 1997, versus $2,681,000 for the nine months ended
September 30, 1996, or $1,170,000 higher than the nine months ended 1996 due
substantially to the addition of the La/Cal II Properties. Included in
depletion, depreciation and amortization is depletion of oil and gas properties
of $3,071,000 and $1,908,000, respectively. The 1997 amount includes $113,000
related to accelerated depletion on a well to be plugged and abandoned. The
Company incurred $1,055,000 of exploration expense in the nine months ended
September 30 1997, versus $953,000 in 1996, or $102,000 lower, such amounts
included dry hole costs of $487,000 in the first nine months of 1997 versus
$511,000 in 1996.
Interest expense was $1,065,000 in the nine months ended September 30, 1997
compared to $611,000 in the nine months of 1996 due to borrowings by the Company
of $9,000,000 on January 31, 1997 in connection with the La/Cal II Acquisition,
resulting in higher average debt outstanding.
General and administrative expenses amounted to $1,703,000 in the nine months
ended September 30, 1997 versus $1,511,000 in 1996.
The Company's preferred stock dividends amounted to $891,000 for the nine months
ended September 30, 1997 compared to $485,000 in 1996. The increase was due to
dividends paid on the Company's Series B Convertible Preferred Stock issued on
January 31, 1997 in connection with the La/Cal II Acquisition.
Three Months Ended September 30, 1997 Versus Three Months
Ended September 30,1996
Total revenues for the three months ended September 30, 1997 amounted to
$3,171,000 and were $978,000 higher than the $2,193,000 for the three months
ended September 30, 1996. Oil and gas sales were $1,075,000 higher due primarily
to increased oil and gas revenues as a result of the La/Cal II Acquisition along
with increased gas volumes on the pre-acquisition properties offset, somewhat by
lower oil prices received.
The following table reflects the production volumes and pricing information for
the periods presented.
Three months Three months
ended September 30, 1997 ended September 30, 1996
--------------------------- ----------------------------
Production Average Price Production Average Price
---------- ------------- ---------- -------------
Gas (Mcf).......... 608,521 $ 2.55 381,139 $ 2.26
Oil (Bbls)......... 70,620 16.89 39,093 20.75
Lease operating expense and production taxes were $559,000 for the three months
ended September 30, 1997, versus $440,000 for the three months ended September
30, 1996, or $119,000 higher due substantially to the addition of the La/Cal II
Properties. Depletion, deprecation and amortization was $1,201,000 for the three
months ended September 30, 1997, versus $817,000 for the three months ended
12
<PAGE>
September 30, 1996, or $384,000 higher than the third quarter of 1996 due
primarily to the addition of the La/Cal II Properties. Included in depletion,
depreciation and amortization is depletion of oil and gas properties of
$1,013,000 and $619,000, respectively. The Company incurred $656,000 of
exploration expense in the third quarter of 1997, versus $188,000 in the third
quarter of 1996, or $468,000 higher primarily due to dry hole costs of $473,000
in the third quarter of 1997 versus $0 in 1996.
Interest expense was $379,000 in the three months ended September 30, 1997
compared to $199,000 in the third quarter of 1996 due to the Company carrying an
additional $9,000,000 in debt during the 1997 quarter as the result of
additional borrowings in connection with the La/Cal II Acquisition, resulting in
higher average debt outstanding.
General and administrative expenses amounted to $613,000 in the three months
ended September 30, 1997 versus $438,000 in the third quarter of 1996.
The Company's preferred stock dividends amounted to $314,000 for the three
months ended September 30, 1997 compared to $160,000 for the prior year. The
increase is due to dividends paid on the Company's Series B Preferred Stock
issued on January 31, 1997 in connection with the La/Cal II Acquisition.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $6,977,000 in the nine months
ended September 30, 1997 compared to $3,142,000 in the nine months ended
September 30, 1996. The Company's accompanying consolidated statements of cash
flows identify major differences between net income and net cash provided by
operating activities for each of the periods presented.
Net cash used in investing activities totaled $14,900,000 for the first nine
months of 1997 compared to $2,848,000 in 1996. The nine months ended September
30, 1997 reflects $9,251,000 cash paid in connection with the La/Cal II
Acquisition and $6,019,000 in capital expenditures offset by $370,000 in
proceeds from the sale of certain oil and gas properties located in Montana. The
nine months ended September 30, 1996 reflects $3,128,000 in capital expenditures
offset by $326,000 in proceeds from the sale of certain oil and gas properties
in Montana and North Dakota.
Net cash provided by financing activities was $8,101,000 for the current period
as compared to net cash used in financing activities of $519,000 in the prior
year period. The 1997 amount included the borrowing of $9,000,000 by the Company
under its line of credit which was used to payoff the debt assumed in the La/Cal
II Acquisition and to pay the cash portion of the purchase price. The current
period also includes preferred dividends of $891,000 (Series A and Series B),
whereas the prior year period consists primarily of preferred stock dividends of
$485,000 (Series A only).
13
<PAGE>
The Company has a credit facility with a bank which provides for a total
borrowing base determined by the bank every six months based in part, on the
Company's oil and gas reserve information. Such borrowing base was $21,000,000
at September 30, 1997. The maturity date for all amounts drawn under the bank
credit facility is June 1, 2000. Interest is based on either of two methods at
the option of the Company: the bank's prime lending rate or LIBOR plus 2%.
Interest rates are set on specific draws for one, two, three or six month
periods, also at the option of the Company. The Company's credit facility
requires that minimum net worth and debt service ratios be maintained by the
Company. Accordingly, the Company had $1,548,000 available for the payment of
dividends at September 30, 1997. The amount outstanding under this facility as
of September 30, 1997 was $19,000,000.
The Company had $6,019,000 in capital expenditures in the nine months ended
September 30, 1997. The Company plans to incur capital expenditures in the
amount of approximately $1,500,000 in the remainder of 1997. The Company expects
to fund such expenditures from operating cash flows and additional borrowings
under its line of credit.
SUBSEQUENT EVENT
On October 16, 1997, the Company sold its 20% interest in a natural gas pipeline
joint venture. The adjusted sales price was $3,564,000 and the Company expects
to recognize a gain on the sale (both pre-tax and after-tax) in the fourth
quarter of approximately $700,000. The majority of the proceeds were used to pay
down the Company's line of credit by $2,500,000. Upon the completion of the
sale, the Company's borrowing base under its line of credit was reduced to
$19,000,000.
RECENTLY ISSUED ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 128 "Earnings per Share." The
purpose of SFAS No. 128 is to simplify computation of earnings per share ("EPS")
and to make the U.S. standard for computing EPS compatible with the EPS
standards of other countries and with that of the International Accounting
Standards Committee. The effective date for the application of SFAS No. 128 is
for both interim and annual periods after December 15, 1997. Earlier application
is not permitted. The Company does not expect the application of SFAS No. 128 to
have a material impact on its EPS calculation.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this news release regarding future expectations and plans
for future activities may be regarded as "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. They are
subject to various risks, such as financial market conditions, operating
hazards, drilling risks, and the inherent uncertainties in interpreting
14
<PAGE>
engineering data relating to underground accumulations of oil and gas, as well
as other risks discussed in detail in the Company's Annual Report or Form 10-K
and other filings with the Securities and Exchange Commission. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to be correct.
15
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
4.1 Fourth Amendment to Credit Agreement between Goodrich
Petroleum Company of Louisiana, GPC, Inc. of Louisiana
and Compass Bank dated January 31, 1997.
4.2 Fifth Amendment to Credit Agreement between Goodrich
Petroleum Company of Louisiana, GPC, Inc. of Louisiana
and Compass Bank dated January 31, 1997.
27 Financial Data Schedule
(b) Reports on Form 8-K
None
16
<PAGE>
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 thereunto duly authorized.
GOODRICH PETROLEUM CORPORATION
(registrant)
November 4, 1997 /s/ Walter G. Goodrich
- -------------------------------- ---------------------------------
Date Walter G. Goodrich, President and
Chief Executive Officer
November 4, 1997 /s/ Roland L. Frautschi
- -------------------------------- ---------------------------------
Date Roland L. Frautschi, Senior Vice
President, Chief Financial Officer
and Treasurer
17
Exhibit 4.1
FOURTH AMENDMENT TO
CREDIT AGREEMENT
between
GOODRICH PETROLEUM COMPANY OF LOUISIANA
GPC, INC. OF LOUISIANA
NATIONAL MARKETING COMPANY
PECOS PIPELINE AND PRODUCING COMPANY
and
COMPASS BANK
Effective as of
June 1, 1997
<PAGE>
FOURTH AMENDMENT TO CREDIT AGREEMENT
------------------------------------
This FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment")
is made and entered into effective as of June 1, 1997, by and between GOODRICH
PETROLEUM COMPANY OF LOUISIANA ("GPCL"), a Nevada corporation, formerly known as
American National Petroleum Company, successor by merger to Patrick Petroleum
Corporation of Michigan, a Michigan corporation, GPC, INC. OF LOUISIANA ("GPC"),
a Nevada corporation, NATIONAL MARKETING COMPANY, a Delaware corporation and
PECOS PIPELINE AND PRODUCING COMPANY, a Texas Corporation, (collectively, the
"Borrower"), GOODRICH PETROLEUM CORPORATION, a Delaware corporation,
("Goodrich"), and COMPASS BANK, a Texas state chartered banking corporation (the
"Lender").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, GPCL, the Lender, and Goodrich are parties to the
Credit Agreement dated August 16, 1995, as amended by First Amendment to Credit
Agreement dated as of December 15, 1995, and Letter Amendment dated March 26,
1996, and Second Amendment to Credit Agreement dated as of June 1, 1996, and
Letter Amendment dated November 12, 1996, and as further amended by Third
Amendment to Credit Agreement dated as of January 31, 1997 (as amended, the
"Agreement"), pursuant to which the Lender has extended credit to GPCL and
Goodrich has guaranteed the payment and performance of certain indebtedness and
other obligations of GPCL to the Lender; and
WHEREAS, the parties hereto desire to amend the Agreement as
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in the Agreement and this Amendment, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
------------------------------
1.1 Terms Defined Above. As used herein, each of the terms
"Agreement," "Amendment," "Borrower," "GPC", "GPCL," "Goodrich," and "Lender"
shall have the meaning assigned to such term hereinabove.
1.2 Terms Defined in Agreement. As used herein, each term
defined in the Agreement shall have the meaning assigned thereto in the
Agreement, unless expressly provided herein to the contrary.
1.3 References. References in this Amendment to Article or
Section numbers shall be to Articles and Sections of this Amendment, unless
1
<PAGE>
expressly stated to the contrary. References in this Amendment to "hereby,"
"herein," "hereinafter," "hereinabove," "hereinbelow," "hereof," and "hereunder"
shall be to this Amendment in its entirety and not only to the particular
Article or Section in which such reference appears.
1.4 Articles and Sections. This Amendment, for convenience
only, has been divided into Articles and Sections and it is understood that the
rights, powers, privileges, duties, and other legal relations of the parties
hereto shall be determined from this Amendment as an entirety and without regard
to such division into Articles and Sections and without regard to headings
prefixed to such Articles and Sections.
1.5 Number and Gender. Whenever the context requires,
reference herein made to the single number shall be understood to include the
plural and likewise the plural shall be understood to include the singular.
Words denoting sex shall be construed to include the masculine, feminine, and
neuter, when such construction is appropriate, and specific enumeration shall
not exclude the general, but shall be construed as cumulative. Definitions of
terms defined in the singular and plural shall be equally applicable to the
plural or singular, as the case may be.
ARTICLE II
AMENDMENTS TO AGREEMENT
-----------------------
The Agreement is hereby amended as follows:
2.1 Amendment of Section 1.2. Section 1.2 of the Agreement
------------------------
is hereby amended as follows:
The following definition is amended to read as
follows:
"Commitment Termination Date" shall mean June 1, 2000."
----------------------------------------------------
2.2 Amendment of Section 2.7(a). The first sentence of
----------------------------
Section 2.7(a) of the Agreement is hereby amended to read as follows:
(a) "Effective June 1, 1997, the Borrowing Base shall be
$21,000,000 until the next Borrowing Base review.
2.3 Amendment of Section 8.3. The address of National
---------------------------
Marketing Company and Pecos Pipeline and Producing Company is as follows:
333 Texas Street, Suite 1375
Shreveport, Louisiana 71101
Attention: Roland L. Frautschi
Telecopy: (318) 429-2296
2
<PAGE>
ARTICLE III
CONDITIONS
----------
The obligation of the Lender to amend the Agreement as
provided herein is subject to the fulfillment of the following conditions
precedent:
3.1 Receipt of Documents and Other Items. The Lender shall
---------------------------------------
have received, reviewed, and approved the following documents and other items,
appropriately executed when necessary and in form and substance satisfactory to
the Lender:
(a) multiple counterparts of this Amendment executed
by the Borrower and Goodrich, as requested by the
Lender;
(b) Security Agreement, Stock Pledge, of Goodrich Petroleum
Company of Louisiana, pledging the stock of Pecos
Pipeline & Producing Company and National Marketing
Company;
(c) Assignment of Interest in Joint Venture Agreement dated
September 1, 1993, by and between National Marketing
Company and Mitchell Marketing Company; and
(d) Assignment of Interest in Joint Venture Agreement
dated January 1, 1990, by and between Pecos Pipeline
and Producing Company and Ferguson Crossing Pipe Line
Company, as amended by Amendment dated as of
September 1, 1993, by and between Pecos Pipeline and
Producing Company and Southwestern Gas Pipeline, Inc.
3.2 Accuracy of Representations and Warranties. The
-------------------------------------------------
representations and warranties contained in Article IV of the Agreement and in
any other Loan Document shall be true and correct, except as affected by the
transactions contemplated in the Agreement and this Amendment.
3.3 Matters Satisfactory to Lender. All matters incident
--------------------------------
to the consummation of the transactions contemplated hereby shall be
satisfactory to the Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
Each of the Borrower and Goodrich hereby expressly re-makes,
in favor of the Lender, all of the representations and warranties set forth in
Article IV of the Agreement and set forth in any other Loan Document to which it
is a party, and represents and warrants that all such
3
<PAGE>
representations and warranties remain true and unbreached, except as affected by
the transactions contemplated in the Agreement and this Amendment.
ARTICLE V
RATIFICATION
------------
Each of the parties hereto does hereby adopt, ratify, and
confirm the Agreement and the other Loan Documents to which it is a party, in
all things in accordance with the terms and provisions thereof, as amended by
this Amendment and the documents executed in connection herewith.
ARTICLE VI
MISCELLANEOUS
-------------
6.1 Scope of Amendment. The scope of this Amendment is
expressly limited to the matters addressed herein and this Amendment shall not
operate as a waiver of any past, present, or future breach, Default, or Event of
Default under the Agreement, except to the extent, if any, that any such breach,
Default, or Event of Default is remedied by the effect of this Amendment.
6.2 Agreement as Amended. All references to the Agreement in
any document heretofore or hereafter executed in connection with the
transactions contemplated in the Agreement shall be deemed to refer to the
Agreement as amended by this Amendment.
6.3 Parties in Interest. All provisions of this Amendment
shall be binding upon and shall inure to the benefit of the Borrower, the
Lender, Goodrich, and their respective successors and permitted assigns.
6.4 Rights of Third Parties. All provisions herein are imposed
solely and exclusively for the benefit of the parties hereto and their
respective successors and permitted assigns. No other Person shall have standing
to require satisfaction of such provisions in accordance with their terms and
any or all of such provisions may be freely waived in whole or in part by the
Lender at any time if in its sole discretion it deems it advisable to do so.
6.5 Entire Agreement. THIS AMENDMENT CONSTITUTES THE ENTIRE
AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND
SUPERSEDES ANY PRIOR AGREEMENT, WHETHER WRITTEN OR ORAL, AMONG SUCH PARTIES
REGARDING THE SUBJECT HEREOF. FURTHERMORE IN THIS REGARD, THIS AMENDMENT, THE
AGREEMENT, AND THE OTHER PARTIES LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE
FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF SUCH
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.
4
<PAGE>
6.6 Governing Law. THIS AMENDMENT AND ALL ISSUES ARISING IN
CONNECTION HEREWITH AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.
6.7 Jurisdiction and Venue. ALL ACTIONS OR PROCEEDINGS WITH
RESPECT TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED
TO OR FROM THIS AMENDMENT, THE AGREEMENT, OR ANY OTHER LOAN DOCUMENT MAY BE
LITIGATED, AT THE SOLE DISCRETION AND ELECTION OF THE LENDER, IN COURTS HAVING
SITUS IN HOUSTON, HARRIS COUNTY, TEXAS. EACH OF THE BORROWER AND GOODRICH HEREBY
SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED IN
HOUSTON, HARRIS COUNTY, TEXAS, AND HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO
TRANSFER OR CHANGE THE JURISDICTION OR VENUE OF ANY LITIGATION BROUGHT AGAINST
IT BY THE LENDER IN ACCORDANCE WITH THIS SECTION.
6.8 Waiver of Rights to Jury Trial. EACH OF THE BORROWER,
GOODRICH, AND THE LENDER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY,
IRREVOCABLY, AND UNCONDITIONALLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION THAT RELATES TO OR
ARISES OUT OF THIS AMENDMENT, THE AGREEMENT, OR ANY OTHER LOAN DOCUMENT OR THE
ACTS OR OMISSIONS OF THE LENDER IN THE ENFORCEMENT OF ANY OF THE TERMS OR
PROVISIONS OF THIS AMENDMENT, THE AGREEMENT, OR ANY OTHER LOAN DOCUMENT OR
OTHERWISE WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION ARE A MATERIAL
INDUCEMENT FOR THE LENDER ENTERING INTO THIS AMENDMENT.
IN WITNESS WHEREOF, this Amendment is executed effective
as of the date first hereinabove written.
BORROWER:
GOODRICH PETROLEUM COMPANY OF LOUISIANA
By: /s/ Walter G. Goodrich
----------------------------------
Walter G. Goodrich
President
GPC, INC. OF LOUISIANA
By: /s/Walter G. Goodrich
----------------------------------
Walter G. Goodrich
President
5
<PAGE>
NATIONAL MARKETING COMPANY
By: /s/ Walter G. Goodrich
----------------------------------
Walter G. Goodrich
President
PECOS PIPELINE AND
PRODUCING COMPANY
By: /s/ Walter G. Goodrich
----------------------------------
Walter G. Goodrich
President
GUARANTOR:
GOODRICH PETROLEUM CORPORATION
By: /s/ Walter G. Goodrich
----------------------------------
Walter G. Goodrich
President
LENDER:
COMPASS BANK
By: /s/ Allison Hammer
----------------------------------
Allison Hammer
Vice President
6
Exhibit 4.2
FIFTH AMENDMENT TO
CREDIT AGREEMENT
between
GOODRICH PETROLEUM COMPANY OF LOUISIANA
GPC, INC. OF LOUISIANA
and
COMPASS BANK
Effective as of
October 16, 1997
<PAGE>
FIFTH AMENDMENT TO CREDIT AGREEMENT
-----------------------------------
This FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment")
is made and entered into effective as of October 16, 1997, by and between
GOODRICH PETROLEUM COMPANY OF LOUISIANA ("GPCL"), a Nevada corporation, formerly
known as American National Petroleum Company, successor by merger to Patrick
Petroleum Corporation of Michigan, a Michigan corporation, GPC, INC. OF
LOUISIANA ("GPC"), a Nevada corporation, (collectively, the "Borrower"),
GOODRICH PETROLEUM CORPORATION, a Delaware corporation, ("Goodrich"), and
COMPASS BANK, a Texas state chartered banking corporation (the "Lender").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, GPCL, GPC, the Lender, and Goodrich are parties to
the Credit Agreement dated August 16, 1995, as amended by First Amendment to
Credit Agreement dated as of December 15, 1995, and Letter Amendment dated March
26, 1996, and Second Amendment to Credit Agreement dated as of June 1, 1996, and
Letter Amendment dated November 12, 1996, and as further amended by Third
Amendment to Credit Agreement dated as of January 31, 1997, and as further
amended by Fourth Amendment to Credit Agreement dated as of June 1, 1997, (as
amended, the "Agreement"), pursuant to which the Lender has extended credit to
GPCL and Goodrich has guaranteed the payment and performance of certain
indebtedness and other obligations of GPCL and GPC to the Lender; and
WHEREAS, the parties hereto desire to amend the Agreement
as hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in the Agreement and this Amendment, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
------------------------------
1.1 Terms Defined Above. As used herein, each of the terms
"Agreement," "Amendment," "Borrower," "GPC", "GPCL," "Goodrich," and "Lender"
shall have the meaning assigned to such term hereinabove.
1.2 Terms Defined in Agreement. As used herein, each term
defined in the Agreement shall have the meaning assigned thereto in the
Agreement, unless expressly provided herein to the contrary.
1.3 References. References in this Amendment to Article or
Section numbers shall be to Articles and Sections of this Amendment, unless
expressly stated to the contrary. References in this Amendment to "hereby,"
"herein," "hereinafter," "hereinabove," "hereinbelow," "hereof," and "hereunder"
1
<PAGE>
shall be to this Amendment in its entirety and not only to the particular
Article or Section in which such reference appears.
1.4 Articles and Sections. This Amendment, for convenience
only, has been divided into Articles and Sections and it is understood that the
rights, powers, privileges, duties, and other legal relations of the parties
hereto shall be determined from this Amendment as an entirety and without regard
to such division into Articles and Sections and without regard to headings
prefixed to such Articles and Sections.
1.5 Number and Gender. Whenever the context requires,
reference herein made to the single number shall be understood to include the
plural and likewise the plural shall be understood to include the singular.
Words denoting sex shall be construed to include the masculine, feminine, and
neuter, when such construction is appropriate, and specific enumeration shall
not exclude the general, but shall be construed as cumulative. Definitions of
terms defined in the singular and plural shall be equally applicable to the
plural or singular, as the case may be.
ARTICLE II
AMENDMENTS TO AGREEMENT
-----------------------
The Agreement is hereby amended as follows:
2.1 Amendment of Section 1.2. Section 1.2 of the
-------------------------
Agreement is hereby amended as follows:
The following definition is amended to read as
follows:
"Applicable Margin" shall mean as to each Floating
-------------------
Rate Loan, zero percent (0%), and as to each LIBO
Rate Loan, the following:
Borrowing Base LIBO Rate Loan
Utilization Applicable Margin
-------------- -----------------
1) greater than 75% two percent (2%)
of Borrowing Base
2) less than or equal to 75% one and three-fourths
and greater than 50% of percent (1 3/4%)
Borrowing Base
3) less than or equal to one and one-half
50% of Borrowing Base percent (1 1/2%)
2
<PAGE>
The Borrowing Base Utilization and the corresponding
LIBO Rate shall be set at each quarter end for the next
quarter. Borrower will furnish to Lender a Form of Borrowing
Base Utilization, which is attached as Exhibit VII to this
Amendment, which shall stipulate the Borrowing Base level at
the end of such quarter. Such form shall be furnished to
Lender within five (5) days of the end of such quarter."
"Borrowing Base Utilization" shall mean the aggregate
---------------------------
principal amount of Loans outstanding hereunder as a
percentage of the Borrowing Base."
2.2 Amendment of Section 2.7(a). The first sentence of
----------------------------
Section 2.7(a) of the Agreement is hereby amended to read as follows:
(a) "Effective October 16, 1997, the Borrowing Base shall be
$19,000,000 until the next Borrowing Base review.
2.3 Amendment of Section 2.12. Section 2.12 of the
---------------------------
Agreement is amended by amending the first sentence to read as follows:
"To compensate the Lender for maintaining funds available, the
Borrower shall pay to the Lender a commitment fee calculated
on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed (including the first day but excluding
the last day), on the average daily amount of the Available
Commitment as follows:
Borrowing Base
Utilization Commitment Fee
-------------- --------------
1) greater than 75% one-half percent(1/2%)
of Borrowing Base
2) less than or equal to three-eighths percent(3/8%)
50% of Borrowing Base
The Borrowing Base Utilization and the corresponding Commitment Fee
shall be set at each quarter end for the next quarter.
3
<PAGE>
ARTICLE III
CONDITIONS
----------
The obligation of the Lender to amend the Agreement as
provided herein is subject to the fulfillment of the following conditions
precedent:
3.1 Receipt of Documents and Other Items. The Lender shall
---------------------------------------
have received, reviewed, and approved the following documents and other items,
appropriately executed when necessary and in form and substance satisfactory to
the Lender:
(a) multiple counterparts of this Amendment executed by
the Borrower and Goodrich, as requested by the Lender; and
(b) such other agreements, documents, items, instruments,
opinions, certificates, waivers, consents and evidence as the Lender
may reasonably request.
3.2 Accuracy of Representations and Warranties. The
-------------------------------------------------
representations and warranties contained in Article IV of the Agreement and in
any other Loan Document shall be true and correct, except as affected by the
transactions contemplated in the Agreement and this Amendment.
3.3 Matters Satisfactory to Lender. All matters incident
---------------------------------
to the consummation of the transactions contemplated hereby shall be
satisfactory to the Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
Each of the Borrower and Goodrich hereby expressly re-makes,
in favor of the Lender, all of the representations and warranties set forth in
Article IV of the Agreement and set forth in any other Loan Document to which it
is a party, and represents and warrants that all such representations and
warranties remain true and unbreached, except as affected by the transactions
contemplated in the Agreement and this Amendment.
ARTICLE V
RATIFICATION
------------
Each of the parties hereto does hereby adopt, ratify, and
confirm the Agreement and the other Loan Documents to which it is a party, in
all things in accordance with the terms and provisions thereof, as amended by
this Amendment and the documents executed in connection herewith.
4
<PAGE>
ARTICLE VI
MISCELLANEOUS
-------------
6.1 Scope of Amendment. The scope of this Amendment is
expressly limited to the matters addressed herein and this Amendment shall not
operate as a waiver of any past, present, or future breach, Default, or Event of
Default under the Agreement, except to the extent, if any, that any such breach,
Default, or Event of Default is remedied by the effect of this Amendment.
6.2 Agreement as Amended. All references to the Agreement in
any document heretofore or hereafter executed in connection with the
transactions contemplated in the Agreement shall be deemed to refer to the
Agreement as amended by this Amendment.
6.3 Parties in Interest. All provisions of this Amendment
shall be binding upon and shall inure to the benefit of the Borrower, the
Lender, Goodrich, and their respective successors and permitted assigns.
6.4 Rights of Third Parties. All provisions herein are imposed
solely and exclusively for the benefit of the parties hereto and their
respective successors and permitted assigns. No other Person shall have standing
to require satisfaction of such provisions in accordance with their terms and
any or all of such provisions may be freely waived in whole or in part by the
Lender at any time if in its sole discretion it deems it advisable to do so.
6.5 Entire Agreement. THIS AMENDMENT CONSTITUTES THE ENTIRE
AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND
SUPERSEDES ANY PRIOR AGREEMENT, WHETHER WRITTEN OR ORAL, AMONG SUCH PARTIES
REGARDING THE SUBJECT HEREOF. FURTHERMORE IN THIS REGARD, THIS AMENDMENT, THE
AGREEMENT, AND THE OTHER PARTIES LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE
FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF SUCH
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.
6.6 Governing Law. THIS AMENDMENT AND ALL ISSUES ARISING IN
CONNECTION HEREWITH AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.
6.7 Jurisdiction and Venue. ALL ACTIONS OR PROCEEDINGS WITH
RESPECT TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED
TO OR FROM THIS AMENDMENT, THE AGREEMENT, OR ANY OTHER LOAN DOCUMENT MAY BE
LITIGATED, AT THE SOLE DISCRETION AND ELECTION OF THE LENDER, IN COURTS HAVING
SITUS IN HOUSTON, HARRIS COUNTY, TEXAS. EACH OF THE BORROWER AND GOODRICH HEREBY
SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED IN
5
<PAGE>
HOUSTON, HARRIS COUNTY, TEXAS, AND HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO
TRANSFER OR CHANGE THE JURISDICTION OR VENUE OF ANY LITIGATION BROUGHT AGAINST
IT BY THE LENDER IN ACCORDANCE WITH THIS SECTION.
6.8 Waiver of Rights to Jury Trial. EACH OF THE BORROWER,
GOODRICH, AND THE LENDER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY,
IRREVOCABLY, AND UNCONDITIONALLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION THAT RELATES TO OR
ARISES OUT OF THIS AMENDMENT, THE AGREEMENT, OR ANY OTHER LOAN DOCUMENT OR THE
ACTS OR OMISSIONS OF THE LENDER IN THE ENFORCEMENT OF ANY OF THE TERMS OR
PROVISIONS OF THIS AMENDMENT, THE AGREEMENT, OR ANY OTHER LOAN DOCUMENT OR
OTHERWISE WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION ARE A MATERIAL
INDUCEMENT FOR THE LENDER ENTERING INTO THIS AMENDMENT.
IN WITNESS WHEREOF, this Amendment is executed effective
as of the date first hereinabove written.
BORROWER:
GOODRICH PETROLEUM COMPANY OF LOUISIANA
By: /s/ Walter G. Goodrich
-------------------------------
Walter G. Goodrich
President
GPC, INC. OF LOUISIANA
By: /s/ Walter G. Goodrich
-------------------------------
Walter G. Goodrich
President
6
<PAGE>
GUARANTOR:
GOODRICH PETROLEUM CORPORATION
By: /s/ Walter G. Goodrich
-------------------------------
Walter G. Goodrich
President
LENDER:
COMPASS BANK
By: /s/ Allison Hammer
-------------------------------
Allison Hammer
Vice-President
7
<PAGE>
EXHIBIT VII
[FORM OF BORROWING BASE UTILIZATION]
Compass Bank
24 Greenway Plaza, 14th Floor
Houston, Texas 77046
Attention: Energy Lending
Re: Credit Agreement dated as of August 16, 1995, as
Amended by and between the parties as set forth in the
Fifth Amendment to Credit Agreement
-----------------------------------
Ladies and Gentlemen:
Pursuant to applicable requirements of the Credit Agreement, the
undersigned, as Responsible Officers of the Borrowers and the Guarantors, hereby
certify to you the following information as true and correct as of the date
hereof or for the period indicated, as the case may be:
To the best knowledge of the undersigned, the Borrowing Base
Utilization as described in the definition of the Applicable Margin for the
quarter ending _________________, 19__, was as follows, and the LIBO Rate Loan
Applicable Margin for the following quarter is as follows:
Borrowing Base LIBO Rate
Utilization Margin Loan Applicable
------------------ ---------------
[1) greater than 75% two percent (2%)
of Borrowing Base]
[2) less than or equal to 75% one and three-fourths
and greater than 50% of percent (1 3/4%)
Borrowing Base]
[3) less than or equal to one and one-half
50% of Borrowing Base percent (1 1/2%)]
To the best knowledge of the undersigned, the Borrowing Base
Utilization as described in Section 2.12 for the quarter ending
_________________, 19__, was as follows and the Commitment Fee as described in
Section 2.12 for the following quarter is as follows:
I-i
8
<PAGE>
Borrowing Base
Utilization Margin Commitment Fee
------------------ --------------
[1) greater than 50% one-half percent (1/2%)
of Borrowing Base]
[2) less than or equal to three-eighths percent(3/8%)
50% of Borrowing Base]
Each capitalized term used but not defined herein shall have the
meaning assigned to such term in the Credit Agreement.
GOODRICH PETROLEUM COMPANY OF LOUISIANA
By: _____________________________________
Printed Name: ___________________________
Title: __________________________________
GPC, INC. OF LOUISIANA
By: _____________________________________
Printed Name: ___________________________
Title: __________________________________
I-ii
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 522,247
<SECURITIES> 717,400
<RECEIVABLES> 3,436,498
<ALLOWANCES> 24,989
<INVENTORY> 0
<CURRENT-ASSETS> 4,826,140
<PP&E> 40,071,380
<DEPRECIATION> 7,792,865
<TOTAL-ASSETS> 40,244,610
<CURRENT-LIABILITIES> 4,818,391
<BONDS> 19,000,000
0
1,546,318
<COMMON> 8,371,845
<OTHER-SE> 6,508,056
<TOTAL-LIABILITY-AND-EQUITY> 40,244,610
<SALES> 9,428,048
<TOTAL-REVENUES> 9,836,437
<CGS> 0
<TOTAL-COSTS> 8,254,012
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 1,065,148
<INCOME-PRETAX> 517,277
<INCOME-TAX> 0
<INCOME-CONTINUING> 517,277
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 517,277
<EPS-PRIMARY> (.009)
<EPS-DILUTED> 0
</TABLE>
