SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: May 20, 1997
TIPPERARY CORPORATION
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(Exact name of registrant as specified in its charter)
Texas 1-7796 75-1236955
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(State or other jurisdiction (Commission file number) (I.R.S. employer
of incorporation) identification no.)
633 Seventeenth Street, Suite 1550
Denver, Colorado 80202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 293-9379
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(Former name or former address if changed since last report)
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ITEM 5. Other Events
On May 20, 1997, the Registrant announced the results of an
independent engineering evaluation of its share of proved gas reserves
in the Comet Ridge Coalbed Methane Project in Queensland, Australia.
The results are set forth in the press release filed herewith as an
exhibit.
ITEM 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
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Not applicable.
(b) Pro forma financial information.
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Not applicable.
(c) Exhibits
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1. Press release May 20, 1997, of the Registrant.
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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.
TIPPERARY CORPORATION
(Registrant)
By: /s/ David L. Bradshaw
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David L. Bradshaw
President, Chief Executive Officer
Dated: May 22, 1997
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EXHIBIT 1
<PAGE>
FOR IMMEDIATE RELEASE: NEWS
May 20, 1997 AMEX-TPY
TIPPERARY CORPORATION ANNOUNCES
RESULTS OF INDEPENDENT STUDY OF AUSTRALIA RESERVES
DENVER, Colorado -- Tipperary Corporation (AMEX-TPY) today announced it has
received an independent engineering evaluation of its share of proved gas
reserves in the Comet Ridge Coalbed Methane project in Queensland, Australia.
Tipperary previously announced that it had engaged Rothschild Australia Ltd.,
and Rothschild Denver Inc., to assist the Company in seeking financing for
further development of the project. In conjunction with this effort, Rothschild
Denver Inc., commissioned the third-party study by S. A. Holditch & Associates,
Inc., a Texas-based independent engineering firm. Following is a summary of the
firm's estimate of Tipperary's share of proved reserves, which include proved
developed nonproducing and proved undeveloped gas reserves, as well as present
value of the Company's estimated share of future net income discounted at 10%.
The values presented are as of August 1997 since the discounted future net
income does not include a capital investment for the initial gathering and
compression system of approximately $750,000 to Tipperary's interest. This cost
will be incurred prior to initial gas sales. The Company does not intend to
report the reserves in its financial statements until a gas contract and working
facilities are substantially in place.
<TABLE>
<CAPTION>
Proved Proved
Nonproducing Undeveloped
Reserves Reserves
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<S> <C> <C>
No. Wells 18 32
Gas - Bcf 41.9 59.7
Future Net Revenue (millions) $ 67.1 $ 95.6
Operating Expenses (16.9) (28.1)
Investment (.3) (8.1)
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Future Net Income $ 49.9 $ 59.4
======== ========
Future Net Income Discounted
@ 10% (millions) $ 22.8 $ 20.4
======== ========
</TABLE>
These estimates are applicable only to Tipperary's interest in the project,
which is 50.75% of capital costs, 47.58% of operating expenses, and a net
revenue of interest of 42.35% prior to payout. After project payout, the
Company's interest is 40.6% of capital and operating expenses, with a net
revenue interest of 36.14%.
<PAGE>
For purposes of calculating future net revenue, Holditch assumed a non-escalated
gas price of US $1.60 per Mcf. This price does not represent any actual
contract price, as no gas contracts have been signed by the Company to date. It
is, however, believed by management to be a reasonable estimate of gas prices
that may be received based upon market surveys. A spacing unit of 2 square
kilometers per well was assumed for future drilling.
In addition, the engineering report indicated probable undeveloped reserves and
possible undeveloped reserves to Tipperary's interest. However, the categories
of probable and possible reserves are not recognized as meeting the financial
accounting and reporting standards for Securities and Exchange Commission
reporting companies, such as Tipperary.
David Bradshaw, Tipperary's CEO, stated, "We are of course pleased with the
independent reserve evaluation, and believe it provides further validation of
our long-term strategy to establish gas reserves in Queensland. We believe
future drilling will allow us to move substantial additional quantities of gas
from probable and possible classifications into proved reserves. We continue to
receive strong indications of interest from gas purchasers, and have been
informed by the pipeline company, PGT Australia, that we should expect to have a
pipeline connection within the next four months."
Tipperary is a Denver-based independent oil and gas company with its other
producing properties located primarily in the Rocky Mountain region and in west
Texas and southeast New Mexico.
Information herein contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, which can be identified by
words such as "may," "will," "expect," "anticipate," "estimate" or "continue,"
or comparable words. In addition, all statements other than statements of
historical facts that address activities that Tipperary expects or anticipates
will or may occur in the future are forward-looking statements. Readers are
encouraged to read the SEC reports of Tipperary, particularly its Form 10-K for
the Fiscal Year Ended September 30, 1996, for meaningful cautionary language
disclosing why actual results may vary materially from those anticipated by
management.
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CONTACTS:
Tipperary Corporation Pfeiffer Public Relations, Inc.
David L. Bradshaw, President and CEO Geoff High
303/293-9379 303/393-7044
