<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 26, 1998
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
FORCENERGY INC
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 1311 65-0429338
(state or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
2730 S.W. 3RD AVENUE, SUITE 800
MIAMI, FLORIDA 33129-2237
(305) 856-8500
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
E. JOSEPH GRADY
VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER
2730 S.W. 3RD AVENUE, SUITE 800
MIAMI, FLORIDA 33129-2237
(305) 856-8500
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
----------------------
Copy to:
DAVID C. BUCK
ANDREWS & KURTH L.L.P.
4200 CHASE TOWER
HOUSTON, TEXAS 77002
(713) 220-4301
(713) 220-4285 (FAX)
----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE
SECURITIES TO THE PUBLIC:
As soon as practicable following the effectiveness
of this Registration Statement.
----------------------
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to rule 462(b) under the Securities Act, please check the following cox
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
----------------------
<TABLE>
<CAPTION>
REGISTRATION FEE
===================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE AGGREGATE OFFERING REGISTRATION FEE
PER SHARE (1) PRICE (1)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,046,009 $24.15625 $25,267,655 $7,454
===================================================================================================
</TABLE>
(1) Calculated in accordance with Rule 457(c) under the Securities Act of
1933, based on the average of the high and low prices of the Common
Stock on the New York Stock Exchange on March 20, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- -------------------------------------------------------------------------------
<PAGE> 2
*******************************************************************************
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
*******************************************************************************
SUBJECT TO COMPLETION, DATED MARCH 26, 1998
1,046,009 SHARES
FORCENERGY INC
COMMON STOCK
----------------------
This Prospectus relates to 1,046,009 shares (the "Offered Shares") of
common stock, par value $0.01 per share (the "Common Stock"), of Forcenergy Inc
("Forcenergy" or the "Company") which are being sold by the selling stockholders
named herein (the "Selling Stockholders"). The Company will not receive any of
the proceeds from the sale of the Offered Shares by the Selling Stockholders,
but will incur certain expenses in connection with the offering. See "Selling
Stockholders."
The Selling Stockholders may from time to time sell all or a portion of
the Offered Shares directly or through one or more broker-dealers, in one or
more transactions on the New York Stock Exchange ("NYSE"), in the
over-the-counter market, in negotiated transactions or otherwise, or through a
combination of such methods, at fixed prices, which may be changed, at prices
and terms then prevailing or at prices related to the then-current market price,
or at negotiated prices. See "Plan of Distribution." The Selling Stockholders
and any "broker-dealer" participating in the distribution of the Offered Shares
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"). Any commissions paid or concessions
allowed to any broker-dealer, and, if any broker-dealer purchases such shares as
principal, any profits received on the resale of such shares, may be deemed to
be underwriting discounts and commissions under the Securities Act.
As of March 13, 1998 the Company had 25,513,102 shares of its Common
Stock outstanding, of which 16,478,361 are registered and available for
unrestricted trading on the NYSE. The shares of Common Stock offered hereby have
been approved for trading on the New York Stock Exchange. On March 24, 1998, the
closing price of the Common Stock on the New York Stock Exchange was $25-15/16
per share as published in The Wall Street Journal on March 25, 1998.
----------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED CAREFULLY BY PROSPECTIVE INVESTORS BEFORE
PURCHASING THE COMMON STOCK OFFERED HEREBY.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder and, in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549-1004, and at the following
Regional Offices of the Commission: Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and New York Regional Office, 7
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material may also be obtained at the prescribed rates from the Public Reference
Section of the Commission at its principal office at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549-1004. The Company's Common Stock is
traded on the NYSE and, as a result, the Company also files reports, proxy
statements and other information with the NYSE, and such reports, proxy
statements and other information are available for inspection at the offices of
the NYSE at 20 Broad Street, New York, New York 10005. The Registration
Statement and other information filed by the Company with the Commission are
also available at the web site of the Commission at http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments, supplements and exhibits thereto, the
"Registration Statement") under the Securities Act, with respect to the Common
Stock offered by this Prospectus. This Prospectus, which constitutes part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement or the exhibits and schedules thereto. For further
information pertaining to the Common Stock offered by this Prospectus and the
Company, reference is made to the Registration Statement and the exhibits and
schedules thereto. Statements made in this Prospectus as to the contents of any
agreement or other document are not necessarily complete, and in each instance
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference. The Registration Statement, including the exhibits and schedules
thereto, may be inspected, without charge, at the public reference facilities
maintained by the Commission in Washington, D.C. and copies of such material may
be obtained from the Commission upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by Forcenergy with the
Commission pursuant to the Exchange Act, are incorporated herein by reference:
(i) Annual Report on Form 10-K for the fiscal year ended December
31, 1997; and
(ii) The description of Forcenergy Common Stock and associated
preferred share purchase rights contained in Forcenergy's Registration
Statements on Form 8-A filed initially with the Commission on July 17,
1995 and December 4, 1997, respectively, and any amendment or report
filed for the purpose of updating such descriptions.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the Offered
Shares shall be deemed to be incorporated herein by reference and to be a part
hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of the documents, including exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
made to: Forcenergy Inc, 2730 S.W. 3rd Avenue, Suite 800, Miami, Florida 33129,
Attention: Corporate Secretary; telephone (305) 856-8500.
2
<PAGE> 4
RISK FACTORS
In addition to the other information set forth or incorporated by
reference in this Prospectus, the following factors should be considered
carefully by prospective investors before purchasing the Common Stock offered
hereby.
VOLATILITY OF NATURAL GAS AND OIL PRICES AND HEDGING RISK
Revenues generated from Forcenergy's operations are highly dependent
upon the price of, and demand for, oil and natural gas. Historically, the
markets for oil and natural gas have been volatile and are likely to continue to
be volatile in the future. Prices for oil and natural gas are subject to wide
fluctuations in response to relatively minor changes in the supply of and demand
for oil and natural gas, market uncertainty and a variety of additional factors
that are beyond the control of Forcenergy. These factors include the level of
consumer product demand, weather conditions, domestic and foreign governmental
regulations, the price and availability of alternative fuels, political
conditions in the Middle East, the foreign supply of oil and natural gas, the
price of foreign imports and overall economic conditions. It is impossible to
predict future oil and natural gas price movements with any certainty. Declines
in oil and natural gas prices may materially adversely affect Forcenergy's
financial condition, liquidity and results of operations. Lower oil and natural
gas prices also may reduce the amount of Forcenergy's oil and natural gas that
can be produced economically. In order to reduce its exposure to price risks in
the sale of its oil and natural gas, Forcenergy enters into hedging arrangements
from time to time. Forcenergy's hedging arrangements apply to only a portion of
its production and provide only limited price protection against fluctuations in
the oil and natural gas markets. While the use of hedging arrangements limits
the downside risk of adverse price movements, they may also limit future
revenues from favorable price movements.
IMPAIRMENT OF OIL AND GAS PROPERTIES
Forcenergy uses the full cost method of accounting for its investment in
oil and natural gas properties. Under the full cost method of accounting, all
costs of acquisition, exploration and development of oil and natural gas
reserves are capitalized into a "full cost pool" as incurred, and properties in
the pool are depleted and charged to operations using the unit-of-production
method based on the ratio of current production to total proved oil and natural
gas reserves. To the extent that such capitalized costs (net of accumulated
depreciation, depletion and amortization) less deferred taxes exceed the present
value (using a 10% discount rate) of estimated future net cash flows from proved
oil and natural gas reserves, and the lower of cost or fair value of unproved
properties after income tax effects, such excess costs are charged to
operations. Once incurred, a write-down of oil and natural gas properties is not
reversible at a later date even if oil or natural gas prices increase.
Significant downward revisions of reserve estimates or declines in oil and gas
prices which are not offset by other factors could result in a write-down for
impairment of oil and gas properties. For example, during the fourth-quarter of
1997, the Company recognized a non-cash impairment of oil and gas assets
amounting to $200 million before tax ($162.8 million after tax) pursuant to the
"ceiling test" provisions under the Securities and Exchange Commission's full
cost accounting rules. During the first quarter of 1998, oil and gas prices
declined from those being received as of the year-end reserve valuation date. As
prices decline further from average prices being received as of March 1, 1998
the Company's capitalized costs could exceed the present values of estimated
future net reserves.
REPLACEMENT OF RESERVES
In general, the volume of production from oil and gas properties
declines as reserves are depleted. The rate of decline depends on reservoir
characteristics, and varies from the steep decline rate characteristic of Gulf
of Mexico reservoirs, where Forcenergy has a significant portion of its
production, to the relatively slow decline rate characteristic of the long-lived
fields in the Rocky Mountain, Gulf Coast, Southwest and Appalachian regions.
Except to the extent Forcenergy acquires properties containing proved reserves
or conducts successful development and exploration activities, or both, the
proved reserves of Forcenergy will decline as reserves are produced.
Forcenergy's future oil and natural gas production is, therefore, highly
dependent upon its level of success in finding or acquiring additional reserves.
The business of exploring for, developing or acquiring reserves is capital
intensive. To the extent cash flows from operations is reduced and external
sources of capital become limited or unavailable, Forcenergy's ability to make
the necessary capital investment to maintain or expand its asset base of oil and
natural gas reserves would be impaired. In addition, there can be no assurance
that Forcenergy's future development, acquisition and exploration activities
will result in additional proved reserves or that Forcenergy will be able to
drill productive wells at acceptable costs.
3
<PAGE> 5
TITLE TO PROPERTIES
Substantially all of Forcenergy's oil and gas properties are and will
continue to be mortgaged to secure borrowings under its bank loan agreement (the
"Senior Credit Facility"). In the event of Forcenergy's default under certain
provisions of the Senior Credit Facility, Forcenergy's ownership interest in
these properties may be subject to foreclosure by the lender.
UNCERTAINTY OF RESERVE INFORMATION AND FUTURE NET REVENUE ESTIMATES
There are numerous uncertainties inherent in estimating oil and natural
gas reserves and their estimated values, including many factors beyond the
control of the producer. The reserve data set forth in Forcenergy's Annual
Report represents only estimates. Reservoir engineering is a subjective process
of estimating underground accumulations of oil and natural gas that cannot be
measured in an exact manner. Estimates of economically recoverable oil and gas
reserves and of future net cash flows necessarily depend upon a number of
variable factors and assumptions, such as historical production from the area
compared with production from other producing areas, the assumed effects of
regulations by governmental agencies and assumptions concerning future oil and
gas prices, future operating costs, severance and excise taxes, development
costs and workover and remedial costs, all of which may in fact vary
considerably from actual results. For these reasons, estimates of the
economically recoverable quantities of oil and natural gas attributable to any
particular group of properties, classifications of such reserves based on risk
of recovery, and estimates of the future net cash flows expected therefrom
prepared by different engineers or by the same engineers at different times may
vary substantially and such reserve estimates may be subject to downward or
upward adjustment based upon such factors. Actual production, revenues and
expenditures with respect to Forcenergy's reserves will likely vary from
estimates, and such variances may be material.
The present values of estimated future net cash flows referred to in
Forcenergy's Annual Report should not be construed as the current market value
of the estimated oil and natural gas reserves attributable to Forcenergy's
properties. In accordance with applicable requirements of the Commission, the
estimated discounted future net cash flows from proved reserves are generally
based on prices and costs as of the date of the estimate, whereas actual future
prices and costs may be materially higher or lower. In fact, prices received for
production have declined since the date on which such values were calculated.
Actual future net cash flows also will be affected by factors such as the amount
and timing of actual production, supply and demand for oil and natural gas,
curtailments or increases in consumption by gas purchasers and changes in
governmental regulations or taxation. The timing of actual future net cash flows
from proved reserves, and their actual present value, will be affected by the
timing of both the production and the incurrence of expenses in connection with
development and production of oil and gas properties. In addition, the
calculation of the present value of the future net revenues using a 10% discount
as required by the Commission, is not necessarily the most appropriate discount
factor based on interest rates in effect from time to time and risks associated
with Forcenergy's reserves or the oil and gas industry in general.
SUBSTANTIAL CAPITAL REQUIREMENTS
Forcenergy makes, and will continue to make, substantial capital
expenditures for the development, exploration, acquisition and production of oil
and natural gas reserves. Historically, Forcenergy has financed these
expenditures primarily with proceeds from bank borrowings, private placements
and public offerings of debt and equity securities and cash generated by
operations. Forcenergy made capital expenditures (including expenditures for
acquisitions) of approximately $144.7 million during 1995, $284.0 million during
1996 and $496.9 million during 1997. Forcenergy's 1998 capital expenditure
budget, not including expenditures for acquisitions, is estimated to be
approximately $195 million. If revenues decrease as a result of lower oil and
gas prices or operating difficulties, Forcenergy may be limited in its ability
to expend the capital necessary to undertake or complete its drilling program in
future years. There can be no assurance that additional debt or equity financing
or cash generated by operations will be available to meet these requirements.
DRILLING RISKS
Drilling involves numerous risks, including the risk that no
commercially productive natural gas or oil reservoirs will be encountered. The
cost of drilling, completing and operating wells is often uncertain, and
drilling operations may be curtailed, delayed or canceled as a result of a
variety of factors, including unexpected drilling conditions, pressure or
irregularities in formations, equipment failures or accidents, adverse weather
conditions and shortages or delays in the delivery of equipment. Forcenergy's
future drilling activities may not be successful and, if
4
<PAGE> 6
unsuccessful, such failure will have an adverse effect on Forcenergy's future
results of operations and financial condition.
ACQUISITION RISKS
Forcenergy's rapid growth in recent years has been largely the result of
acquisitions of producing properties. Forcenergy expects to continue to evaluate
and pursue acquisition opportunities which are available on terms management
considers favorable to Forcenergy. The successful acquisition of producing
properties requires an assessment of recoverable reserves, future oil and gas
prices, operating costs, potential environmental and other liabilities and other
factors beyond Forcenergy's control. Such assessments are necessarily inexact
and their accuracy inherently uncertain. In connection with such an assessment,
Forcenergy performs a review of the subject properties that it believes to be
generally consistent with industry practices. Such a review, however, will not
reveal all existing or potential problems nor will it permit a buyer to become
sufficiently familiar with the properties to fully assess their deficiencies and
capabilities. Inspections may not always be performed on every platform or well,
and structural and environmental problems are not necessarily observable even
when an inspection is undertaken. Forcenergy is generally not entitled to
contractual indemnification for pre-closing liabilities, including environmental
liabilities, and generally acquires interests in the properties on an "as is"
basis.
DEPENDENCE ON KEY PERSONNEL
Forcenergy depends to a large extent on the services of its founder,
Stig Wennerstrom, and certain other senior management personnel. The loss of the
services of Mr. Wennerstrom and other senior management personnel could have a
material adverse effect on Forcenergy's operations. Forcenergy has entered into
employment agreements with Messrs. Wennerstrom, J. Russell Porter, E. Joseph
Grady and Thomas F. Getten. Forcenergy does not maintain any key-man insurance
on its senior management. Forcenergy believes that its success is also dependent
upon its ability to continue to employ and retain skilled technical personnel.
GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS
Forcenergy's business is regulated by certain local, state and federal
laws and regulations relating to the exploration for, and the development,
production, marketing, pricing, transportation and storage of, oil and natural
gas. Forcenergy's business is also subject to extensive and changing
environmental and safety laws and regulations governing plugging and
abandonment, the discharge of materials into the environment or otherwise
relating to environmental protection. As with any owner of property, Forcenergy
is also subject to cleanup costs and liability for hazardous materials, asbestos
or any other toxic or hazardous substance that may exist on or under any of its
properties. In addition, Forcenergy is subject to changing and extensive tax
laws, and the effect of newly enacted tax laws cannot be predicted. The
implementation of new, or the modification of existing, laws or regulations,
including amendments to the Oil Pollution Act of 1990 or regulations which may
be promulgated thereunder, could have a material adverse effect on Forcenergy.
COMPETITION
The oil and gas industry is highly competitive. Forcenergy encounters
competition from other oil and gas companies in all areas of its operations,
including the acquisition of producing properties. Forcenergy's competitors
include major integrated oil and natural gas companies and numerous independent
oil and gas companies, individuals and drilling and income programs. Many of its
competitors are large, well-established companies with substantially larger
operating staffs and greater capital resources than Forcenergy and which, in
many instances, have been engaged in the energy business for a much longer time
than Forcenergy. Such companies may be able to pay more for productive oil and
natural gas properties and exploratory prospects and to define, evaluate, bid
for and purchase a greater number of properties and prospects than Forcenergy's
financial or human resources permit. Forcenergy's ability to acquire additional
properties and to discover reserves in the future will be dependent upon its
ability to evaluate and select suitable properties and to consummate
transactions in a highly competitive environment.
OPERATING RISKS OF OIL AND GAS OPERATIONS
The oil and gas business involves certain operating hazards such as well
blowouts, cratering, explosions, uncontrollable flows of oil, natural gas or
well fluids, fires, formations with abnormal pressures, pollution, releases of
toxic gas and other environmental hazards and risks, any of which could result
in substantial losses to Forcenergy. Forcenergy's offshore operations also are
subject to the additional hazards of marine operations, such as severe weather,
5
<PAGE> 7
capsizing and collision. The availability of a ready market for Forcenergy's oil
and natural gas production also depends on the proximity of reserves to, and the
capacity of, oil and gas gathering systems, pipelines and trucking or terminal
facilities. In addition, Forcenergy may be liable for environmental damages
caused by previous owners of property purchased and leased by Forcenergy. As a
result, substantial liabilities to third parties or governmental entities may be
incurred, the payment of which could reduce or eliminate the funds available for
development, acquisitions or exploration, or result in the loss of Forcenergy's
properties. In accordance with customary industry practices, Forcenergy
maintains insurance against some, but not all, of such risks and losses.
Forcenergy does not carry business interruption insurance. The occurrence of an
event not fully covered by insurance could have a material adverse effect on the
financial condition and results of operations of Forcenergy.
6
<PAGE> 8
THE COMPANY
Forcenergy is an independent oil and gas company engaged in the
exploration, acquisition, development, exploitation and production of oil and
natural gas. Forcenergy has experienced significant growth in the last six
years, primarily through the exploitation, enhancement and development of
acquired working interests in producing properties in the Gulf of Mexico and the
acquisition of producing properties in the Cook Inlet, Alaska. At December 31,
1997, Forcenergy had net proved reserves of 121.5 MMBOE, 59% of which were
located in the Gulf of Mexico and 19% of which were located in Alaska.
Approximately 48% of Forcenergy's net proved reserves on such date were oil and
approximately 75% of proved reserves were classified as proved developed.
Forcenergy currently operates approximately 74% of its Gulf of Mexico
production. Although Forcenergy's primary focus is its Gulf of Mexico and Alaska
activities, Forcenergy has also acquired interests in certain undeveloped
international leasehold acreage, primarily in Gabon, Africa and Australia. See
"Information Regarding Forcenergy," elsewhere in this Proxy
Statement/Prospectus. Additional information concerning Forcenergy and its
subsidiaries is included in the Forcenergy documents filed with the Commission,
which are incorporated by reference herein. See "Incorporation of Certain
Documents by Reference."
USE OF PROCEEDS
The Company will not receive any of the proceeds from sales of the
Offered Shares by the Selling Stockholders.
7
<PAGE> 9
SELLING STOCKHOLDERS
This Prospectus relates to the sale by the Selling Stockholders from
time to time of up to 1,046,009 shares of Common Stock. The Selling Stockholders
and the Company are parties to a shareholder agreement that was entered into in
connection with the Company's acquisition of Edisto Resources Corporation. The
Selling Stockholders acquired the shares of Common Stock in connection with the
Company's acquisition of Edisto Resources Corporation. The shares of Common
Stock offered by the Selling Stockholders are included in the Registration
Statement of which this Prospectus is a part pursuant to registration rights
granted under such shareholder agreement. The following table sets forth as of
March 13, 1998 certain information with respect to the Selling Stockholders.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED BEFORE NUMBER OF
OFFERING NUMBER OF SHARES BENEFICIALLY
---------- SHARES OWNED AFTER
SELLING STOCKHOLDER NUMBER PERCENT BEING OFFERED OFFERING (1)
------------------- ------ ------- ------------- -----------------
<S> <C> <C> <C> <C>
TCW Special Credits,
as investment manager for The Board
of Trustees of the Delaware State
Employees Retirement Fund.......... 32,252 * 32,252 -0-
TCW Special Credits,
as general partner of TCW Special
Credits Fund III................... 292,477 1.1% 292,477 -0-
TCW Special Credits,
as general partner of TCW Special
Credits Fund IIIb.................. 241,608 1.0% 241,608 -0-
TCW Special Credits,
as investment manager for The
Common Fund for Bond Investments 16,248 * 16,248 -0-
TCW Special Credits,
as investment manager for the
Weyerhaeuser Company Master
Retirement Trust................... 143,626 * 143,626 -0-
TCW Special Credits,
as investment manager for the TCW
Special Credits Trust.............. 128,846 * 128,846 -0-
TCW Special Credits,
as investment manager for the TCW
Special Credits Trust IIIb......... 172,530 * 172,530 -0-
---------- ----------
Total..................... 1,027,587 4.0% 1,027,587 -0-
========== ==========
Oaktree Capital Management, LLC,
as investment manager for the OCM
High Yield Trust................... 10,424 * 10,424 -0-
Oaktree Capital Management, LLC,
as general partner of the OCM High
Yield Limited Partnership.......... 5,518 * 5,518 -0-
Oaktree Capital Management, LLC,
as investment manager for Hughes
Aircraft Company Master Retirement
Trust ............................. 1,665 * 1,665 -0-
Oaktree Capital Management, LLC,
as investment manager for the San
Diego County Employees'
Retirement Association............. 815 * 815 -0-
---------- ----------
Total..................... 18,422 * 18,422 -0-
========== ==========
1,046,009 -0-
==========
</TABLE>
- -----------------
* Less than 1%.
(1) Assumes all Offered Shares are sold in this offering. There is no
assurance that the Selling Stockholders will sell any or all of the
Offered Shares.
8
<PAGE> 10
The Company will pay all costs and expenses incurred in connection with
the registration under the Securities Act of the Offered Shares including, but
not limited to, all registration and filing fees, the New York Stock Exchange
listing fee, printing expenses and fees and disbursements of counsel and
accountants for the Company. The Selling Stockholders will pay all brokerage
fees and commissions, if any, incurred in connection with the sale of the
Offered Shares.
9
<PAGE> 11
PLAN OF DISTRIBUTION
The shares of Common Stock registered hereunder and owned by the Selling
Stockholders may be offered and sold by means of this Prospectus from time to
time as market conditions permit in one or more transactions on the NYSE, in the
over-the-counter market, in negotiated transactions or otherwise, or through a
combination of such methods, at fixed prices, which may be changed, at prices
and terms then prevailing or at prices related to the then-current market price,
or at negotiated prices. These shares may be sold by one or more of the
following methods, without limitation: (a) a block trade in which a broker or
dealer so engaged will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction; (b)
purchases by a broker or dealer as principal and resale by such broker or dealer
for its account pursuant to this Prospectus; (c) ordinary brokerage transactions
and transactions in which the broker solicits purchasers; and (d) face-to-face
transactions between sellers and purchasers without a broker-dealer. In
effecting sales, brokers or dealers engaged by the Selling Stockholders may
arrange for other brokers or dealers to participate. Such brokers or dealers may
receive commissions or discounts from Selling Stockholders in amounts to be
negotiated.
The Selling Stockholders and any broker-dealers who act in connection
with the sale of the Offered Shares hereunder may be deemed to be "underwriters"
within the meaning of 2(11) of the Securities Act, and any commissions received
by them and profit on any resale of the Offered Shares as principal might be
deemed to be underwriting discounts and commissions under the Securities Act.
The Company has advised the Selling Stockholders that they and any
securities broker-dealers or others who may be deemed to be statutory
underwriters will be subject to the Prospectus delivery requirements under the
Securities Act. The Company also has advised each Selling Stockholder that in
the event of a "distribution" of the shares owned by the Selling Stockholder,
such Selling Stockholder, any "affiliated purchasers", and any broker-dealer or
other person who participates in such distribution may be subject to Rule 10b-6
under the Exchange Act until their participation in that distribution is
completed. A "distribution" is defined in Rule 10b-6 as an offering of
securities "that is distinguished from ordinary trading transactions by the
magnitude of the offering and the presence of special selling efforts and
selling methods". The Company has also advised the Selling Stockholders that
Rule 10b-7 under the Exchange Act prohibits any "stabilizing bid" or
"stabilizing purchase" for the purpose of pegging, fixing or stabilizing the
price of the Common Stock in connection with this offering.
Rule 10b-6 makes it unlawful for any person who is participating in a
distribution to bid for or purchase stock of the same class as is the subject of
the distribution. If Rule 10b-6 applies to the offer and sale of any of the
Offered Shares, then participating broker-dealers will be obligated to cease
market-making activities nine business days prior to their participation in the
offer and sale of the Offered Shares and may not recommence market-making
activities until their participation in the distribution has been completed. If
Rule 10b-6 applies to one or more of the principle market-makers in the
Company's Common Stock, the market price of such stock could be adversely
affected.
LEGAL MATTERS
The validity of the Offered Shares will be passed upon by Andrews &
Kurth L.L.P., Houston, Texas.
10
<PAGE> 12
========================================== ==================================
NO DEALER, SALESMAN OR ANY OTHER
PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS
PROSPECTUS IN CONNECTION WITH THE
OFFERING HEREIN, AND, IF GIVEN OR MADE, 1,046,009 SHARES
SUCH INFORMA TION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PRO
SPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO
BUY, ANY SECURITIES OTHER THAN THOSE FORCENERGY INC
SPECIFICALLY OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS COMMON STOCK
UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION ----------------------
THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO ITS DATE.
PROSPECTUS
---------------------- ----------------------
TABLE OF CONTENTS
PAGE
----
Available Information................ 2
Incorporation of Certain Documents
by Reference...................... 2
Risk Factors......................... 3
The Company.......................... 7
Use of Proceeds...................... 7
Selling Stockholders................. 8
Plan of Distribution................. 10
Legal Matters........................ 10 , 1998
========================================== ==================================
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
All capitalized terms used and not defined in Part II of this
Registration Statement shall have the meanings assigned to them in the
Prospectus which forms a part of this Registration Statement.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Company in connection with this
offering are as follows:
Securities and Exchange Commission registration fee....... $ 7,454
Accounting fees and expenses.............................. 1,000
Legal fees and expenses................................... 2,000
Miscellaneous............................................. 1,066
-------
Total............................................. $11,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the General Corporation of the State of Delaware
(the "DGCL"), a Delaware corporation has the power, under specified
circumstances, to indemnify its directors, officers, employees and agents in
connection with threatened, pending or completed actions, suits or proceedings,
whether civil, criminal, administrative or investigative (other than an action
by or in right of the corporation), brought against them by reason of the fact
that they were or are such directors, officers, employees or agents, against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in any such action, suit or proceeding. Article XII of
Forcenergy's Amended and Restated Certificate of Incorporation together with
Article VII of its bylaws provide for indemnification of each person who is or
was made a party to any actual or threatened civil, criminal, administrative or
investigative action, suit or proceeding because such person is or was an
officer or director of Forcenergy or is a person who is or was serving at the
request of Forcenergy as a director, officer, employee or trustee of another
corporation or of a partnership, joint venture trust or other enterprise,
including service relating to employee benefit plans, to the fullest extent
permitted by the DGCL as it existed at the time the indemnification provisions
of Forcenergy's Certificate of Incorporation and by the Bylaws were adopted or
as may be thereafter amended. Article VII of Forcenergy's Bylaws expressly
provides that it is not the exclusive method of indemnification.
Article VII of the Bylaws provides that Forcenergy may maintain
insurance, at its own expense, to protect itself and any director, officer,
employee or agent of Forcenergy or of another entity against any expense,
liability or loss, regardless of whether Forcenergy would have the power to
indemnify such person against such expense, liability or loss under the DGCL.
Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL (relating to
liability for unauthorized acquisitions or redemptions of, or dividends on,
capital stock) or (iv) for any transaction for which the director derived an
improper personal benefit. Article XII of Forcenergy's Amended and Restated
Certificate of Incorporation contains such a provision.
ITEM 16. LIST OF EXHIBITS.
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1)
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Netherland, Sewell & Associates, Inc.
II-1
<PAGE> 14
23.4 Consent of Collarini Engineering, Inc.
24.1 Powers of attorney (included on the signature page contained in
Part II of this Registration Statement)
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to
include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment of the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Miami, State of Florida, on the 25th day of March,
1998.
FORCENERGY INC
By: /s/ E. Joseph Grady
--------------------------------------
E. Joseph Grady
Vice President -- Chief Financial Officer
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Thomas F. Getten, E. Joseph Grady and
Everett Burrell, or either of them, his true and lawful attorney-in-fact and
agent, with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all amendments) to this Registration statement, and to file the same with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on March 25, 1998.
Signature Title
--------- -----
/s/ Stig Wennerstrom President and Chief Executive Officer
- ---------------------------- (Principal Executive Officer)
Stig Wennerstrom
/s/ E. Joseph Grady Vice President - Chief Financial Officer
- ---------------------------- (Principal Financial and Accounting Officer)
E. Joseph Grady
/s/ Bruce L. Burnham Director
- ----------------------------
Bruce L. Burnham
/s/ Eric Forss Director
- ----------------------------
Eric Forss
/s/ Robert Issal Chairman of the Board of Directors
- ----------------------------
Robert Issal
/s/ William F. Wallace Director
- ----------------------------
William F. Wallace
II-3
<PAGE> 16
INDEX TO EXHIBITS
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1)
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Netherland, Sewell & Associates, Inc.
23.4 Consent of Collarini Engineering, Inc.
24.1 Powers of attorney (included on the signature page contained in
Part II of this Registration Statement)
<PAGE> 1
EXHIBIT 5.1
[ANDREWS & KURTH L.L.P. LETTERHEAD]
March 25, 1998
Board of Directors
Forcenergy Inc
2730 S.W. 3rd Ave., Suite 800
Miami, Florida 33129-2237
Gentlemen:
We have acted as counsel to Forcenergy Inc, a Delaware corporation (the
"Company"), in connection with the Company's Registration Statement on Form S-3
(the "Registration Statement") relating to the registration under the Securities
Act of 1933, as amended (the "Act"), of the offering by the selling stockholders
named in the Registration Statement of up to 1,046,009 shares of the Company's
common stock, $.01 par value (the "Shares").
In connection herewith, we have examined copies of such statutes,
regulations, corporate records and documents, certificates of public and
corporate officials and other agreements, contracts, documents and instruments
as we have deemed necessary as a basis for the opinion hereafter expressed. In
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of all documents submitted to us as copies.
Based on the foregoing and having due regard for such legal considerations
as we deem relevant, we are of the opinion that the Shares have been duly
authorized and are validly issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Registration Statement. By giving such consent, we do not admit
that we are included within the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations thereunder.
Very truly yours,
/s/ Andrews & Kurth L.L.P.
1173/1210
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-3 of our report dated February 17, 1998, on our audits of
the consolidated financial statements of Forcenergy Inc as of December 31, 1997
and 1996 and for each of the three years in the period ended December 31, 1997,
which report is included in the annual report on Form 10-K for the year ended
December 31, 1997 filed with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934.
/s/ COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P.
Miami, Florida
March 25, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF NETHERLAND, SEWELL & ASSOCIATES, INC.
To the Board of Directors of Forcenergy Inc:
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 and the Prospectus included therein of our reports dated
March 4, 1998, March 3, 1997 and March 1, 1996, of the estimates of net proved
oil and natural gas reserves of Forcenergy Inc, and their present values, as of
January 1, 1998, 1997 and 1996, included in the Company's Annual Report on Form
10-K for the year ended December 31, 1997.
NETHERLAND, SEWELL & ASSOCIATES, INC.
By: /s/ DANNY D. SIMMONS
-----------------------------------
Danny D. Simmons
Senior Vice President
Houston, Texas
March 25, 1998
<PAGE> 1
EXHIBIT 23.4
March 25, 1998
To the Board of Directors of Forcenergy Inc:
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our audit letter dated February 16, 1998, our reports
dated February 7, 1997 and February 9, 1996, and our estimates of the net proved
natural gas and oil reserves of Forcenergy Inc (the "Company") as of January 1,
1997 and 1996, our audit of such reserves as of January 1, 1998, and to all
references to our estimates of the net proved natural gas and oil reserves of
the Company as of those dates included in the Company's Annual Report on Form
10-K for the year ended December 31, 1997.
COLLARINI ENGINEERING INC.
/s/ DENNIS JORDAN, P.E.
---------------------------
Dennis Jordan, P.E.
Senior Vice President
