UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date Of Report (Date Of Earliest Event Reported): August 22, 2005
PRIMEENERGY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-7406 84-0637348
(Commission File Number) (IRS Employer Identification No.)
One Landmark Square
Stamford, Connecticut 06901
(Address of Principal Executive Offices, Including Zip Code)
(203) 358-5700
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
INFORMATION TO BE INCLUDED IN THIS REPORT
This Amendment No. 1 is being filed as an amendment to the Current Report
on Form 8-K of PrimeEnergy Corporation filed with the Securities and Exchange
Commission on August 26, 2005. Item 2.01 is herein amended as set forth below.
The required financial information is filed herewith as set forth in Item
9.01(b) below.
ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On August 22, 2005, F-W Oil Exploration L.L.C. ("FWOE"), a subsidiary of the
Registrant, contributed and assigned certain oil and gas properties and
pipelines, equipment, facilities and fixtures appurtenant thereto, in off-shore
Gulf of Mexico (the "Properties") to FWOE Partners L.P. ("Partners"). In
exchange for the Properties FWOE received an initial 20% General Partnership
interest in Partners and a cash distribution from Partners of $42.9 million, of
which $25.2 million was used to repay outstanding bank debt and extinguish liens
against the contributed properties.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
PAGE
----
(b) Pro Forma Consolidated Financial Statements (Unaudited)
Introduction F-1
Pro Forma Consolidated Balance Sheet (Unaudited) June 30, 2005 F-2
Pro Forma Consolidated Income Statement (Unaudited) for the Year Ended December 31, 2004 F-3
Pro Forma Consolidated Income Statement (Unaudited) for the Six Months Ended June 30, 2005 F-4
Notes to Pro Forma Consolidated Financial Statements (Unaudited) F-5
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 hereunto duly authorized.
PrimeEnergy Corporation
Date: November 4, 2005 By: /s/ Charles E. Drimal, Jr.
-------------------------------------
Charles E. Drimal, Jr.
Chief Executive Officer and President
PRIMEENERGY CORPORATION
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The accompanying pro forma consolidated financial statements have been prepared
by recording pro forma adjustments to the historical consolidated financial
statements of PrimeEnergy Corporation. The pro forma consolidated balance sheet
as of June 30, 2005, has been prepared as if the disposition of assets occurred
on June 30, 2005. The pro forma consolidated income statement for the year ended
December 31, 2004, has been prepared as if the disposition of assets occurred on
January 1, 2004. The pro forma consolidated income statement for the six months
ended June 30, 2005, has been prepared as if the disposition of assets occurred
on January 1, 2005.
These pro forma consolidated financial statements are not necessarily indicative
of the financial position or results of operations that would have occurred had
the transactions been effected on the assumed dates. Additionally, future
results may vary significantly from the results reflected in the pro forma
consolidated income statements due to normal production declines, changes in
prices, future transactions and other factors. These statements should be read
in conjunction with our audited consolidated financial statements and the
related notes for the year ended December 31, 2004, included in our 2004 Form
10-K, and our unaudited consolidated financial statements and related notes for
the six months ended June 30, 2005, included in our Form 10-Q for the quarter
ended June 30, 2005.
F-1
PRIMEENERGY CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
JUNE 30, 2005
PRO FORMA
ADJUSTMENTS
DISPOSITION OF
HISTORICAL PROPERTIES PRO FORMA
-------------- ---------------- -------------
ASSETS
Total current assets $ 21,605,000 42,900,000 (a) $ 32,033,000
(32,472,000) (b)
Property and Equipment
Oil and gas properties (successful efforts method), net 65,788,000 (23,764,000) (a) 42,024,000
Field service equipment and other, net 3,263,000 3,263,000
-------------- ---------------- -------------
Net property and equipment 69,051,000 (23,764,000) 45,287,000
Other assets 367,000 367,000
-------------- ---------------- -------------
TOTAL ASSETS $ 91,023,000 (13,336,000) $ 77,687,000
============== ================ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 14,394,000 $ 14,394,000
Other current liabilities 5,104,000 5,104,000
-------------- -------------
Total current liabilities 19,498,000 19,498,000
Long-term bank debt 38,800,000 (25,200,000) (b) 13,600,000
Asset retirement obligation 1,847,000 (260,000) (c) 1,587,000
Deferred income taxes 10,420,000 10,420,000
-------------- ---------------- -------------
Total liabilities 70,565,000 (25,460,000) 45,105,000
-------------- ---------------- -------------
Stockholders' equity:
Preferred stock, $.10 par value,
authorized 5,000,000 shares, none issued -- --
Common stock, $.10 par value, authorized
10,000,000 shares; issued 7,694,970 in 2005 and 2004 769,000 769,000
Paid in capital 11,024,000 11,024,000
Retained earnings 27,227,000 12,124,000 39,351,000
-------------- ---------------- -------------
39,020,000 51,144,000
Treasury stock, at cost, 4,320,354 common shares
at 2005 and 4,202,745 common shares at 2004 (18,562,000) (18,562,000)
-------------- ---------------- -------------
Total stockholders' equity 20,458,000 12,124,000 32,582,000
-------------- ================ -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 91,023,000 (13,336,000) $ 77,687,000
============== ================ =============
See accompanying notes to pro forma consolidated financial statements.
F-2
PRIMEENERGY CORPORATION
PRO FORMA CONSOLIDATED INCOME STATEMENT (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 2004
PRO FORMA
ADJUSTMENTS
DISPOSITION OF
HISTORICAL PROPERTIES PRO FORMA
-------------- ---------------- ---------------
REVENUE:
Oil and gas sales $ 43,967,000 (6,552,000) (d) $ 37,415,000
Field service income 11,965,000 11,965,000
Administrative overhead fees 6,317,000 6,317,000
Interest and other income 179,000 179,000
-------------- ---------------- ---------------
Total revenue 62,428,000 (6,552,000) 55,876,000
COSTS AND EXPENSES:
Lease operating expense 14,939,000 (707,000) (d) 14,232,000
Field service expense 10,939,000 10,939,000
Depreciation, depletion and amortization 12,156,000 (3,490,000) (e) 8,666,000
General and administrative expense 7,536,000 7,536,000
Exploration costs 5,499,000 5,499,000
-------------- ---------------- ---------------
Total costs and expenses 51,069,000 (4,197,000) 46,872,000
INCOME FROM OPERATIONS 11,359,000 (2,355,000) 9,004,000
Interest expense 1,136,000 (193,000) (f) 943,000
Gain on sale and exchange of assets 75,000 75,000
-------------- ---------------- ---------------
NET INCOME BEFORE INCOME TAXES 10,223,000 (2,162,000) 8,136,000
Provision for income taxes 3,023,000 821,000 (g) 2,202,000
-------------- ---------------- ---------------
NET INCOME $ 7,275,000 (1,341,000) $ 5,934,000
============== ================ ===============
Basic income per common share $ 2.04 (.38) $ 1.66
Diluted income per common share $ 1.70 (.31) $ 1.39
See accompanying notes to pro forma consolidated financial statements.
F-3
PRIMEENERGY CORPORATION
PRO FORMA CONSOLIDATED INCOME STATEMENT (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2005
PRO FORMA
ADJUSTMENTS
DISPOSITION OF
HISTORICAL PROPERTIES PRO FORMA
---------------- ---------------- ----------------
REVENUE:
Oil and gas sales $ 23,381,000 (4,333,000) (d) $ 19,048,000
Field service income 7,004,000 7,004,000
Administrative overhead fees 3,554,000 3,554,000
Loss on derivative instruments, net (285,000) (285,000)
Interest and other income 32,000 32,000
---------------- ---------------- ----------------
Total revenue 33,686,000 (4,333,000) 29,353,000
---------------- ---------------- ----------------
COSTS AND EXPENSES:
Lease operating expense 8,771,000 (308,000) (d) 8,463,000
Field service expense 5,949,000 5,949,000
Depreciation, depletion and amortization 6,133,000 (850,000) (e) 5,283,000
General and administrative expense 4,181,000 4,181,000
Exploration costs 271,000 271,000
---------------- ---------------- ----------------
Total costs and expenses 25,305,000 (1,158,000) 24,147,000
---------------- ---------------- ----------------
INCOME FROM OPERATIONS 8,381,000 (3,175,000) 5,206,000
Interest expense 827,000 (239,000) (f) 588,000
Gain on sale and exchange of assets 70,000 70,000
---------------- ---------------- ----------------
NET INCOME BEFORE INCOME TAXES 7,624,000 (2,936,000) 4,688,000
Provision for income taxes 3,050,000 (1,116,000) (g) 1,934,000
---------------- ---------------- ----------------
NET INCOME $4,574,000 (1,820,000) $ 2,754,000
================ ================ ================
Basic income per common share $ 1.33 (.53) $ .80
Diluted income per common share $ 1.10 (.44) $ .66
See accompanying notes to pro forma consolidated financial statements.
F-4
PRIMEENERGY CORPORATION
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation
On August 22, 2005, F-W Oil Exploration L.L.C. ("FWOE"), a subsidiary of
PrimeEnergy Corporation, contributed and assigned certain oil and gas properties
and pipelines, equipment, facilities and fixtures appurtenant thereto, in
off-shore Gulf of Mexico (the "Properties") to FWOE Partners L.P. ("Partners").
In exchange for the Properties, FWOE received an initial 20% General Partnership
interest in Partners and a cash distribution from Partners of $42.9 million, of
which $25.2 million was used to repay outstanding bank debt and extinguish liens
against the contributed properties. The cash distribution includes adjustments
for estimated net revenues from the effective date of April 1, 2005, estimated
capital expenditures and other typical closing adjustments. Post closing
adjustments including final net revenues and capital expenditures will be made
within 90 days.
The accompanying pro forma consolidated financial statements have been prepared
by recording pro forma adjustments to the historical consolidated financial
statements of PrimeEnergy Corporation. The pro forma consolidated balance sheet
as of June 30, 2005, has been prepared as if the transaction occurred on June
30, 2005. The pro forma consolidated income statement for the year ended
December 31, 2004, has been prepared as if the transaction occurred on January
1, 2004. The pro forma consolidated income statement for the six months ended
June 30, 2005 has been prepared as if the transaction occurred on January 1,
2005.
2. Pro Forma Adjustments
Pro forma adjustments necessary to adjust the consolidated balance sheet
for the disposition of the Properties are as follows:
(a) To adjust for the net change in oil and gas properties and the receipt
of the cash distribution from Partners.
(b) To adjust for an estimated tax payment at statutory rates and the
repayment of long-term bank debt.
(c) To adjust the estimated asset retirement obligation related to the
Properties.
Pro forma adjustments necessary to adjust the consolidated income
statements for the disposition of the Properties are as follows:
(d) To adjust for the historical revenue and direct operating expenses
related to the Properties.
(e) To adjust for the estimated depreciation and depletion expense related
to the Properties.
(f) To adjust for the interest expense related to the repayment of
long-term debt.
(g) To adjust for income tax expense related to the Properties' operations.
3. Pro Forma Supplemental Oil and Gas Reserve Information
Estimated Quantities of Pro Forma Proved Oil and Gas Reserves
Pro forma reserve estimates at December 31, 2004, are based on reports
prepared by independent petroleum engineers for proved reserves of PrimeEnergy
Corporation using December 31, 2004, prices and costs.
Proved reserves are estimated quantities of crude oil, natural gas and
natural gas liquids which, based on geologic and engineering data, are estimated
to be reasonably recoverable in future years from known reservoirs under
existing economic and operating conditions. Proved developed reserves are those
which are expected to be recovered through existing wells with existing
equipment and operating methods. Because of inherent uncertainties and the
limited nature of reservoir data, such estimates are subject to change as
additional information becomes available.
F-5
Pro Forma Proved Oil and Gas Reserves at December 31, 2004
Reserve Category
---------------------------------------------------------------------------
Proved Developed Proved Undeveloped Total
------------------------------------- ------------------------------------- ---------------------------------
As of Oil Gas Oil Gas Oil Gas
12-31 (bbls) (Mcf) (bbls) (Mcf) (bbls) (Mcf)
--------- ------------------ ------------------ ------------------ ------------------ ------------------ --------------
2004 2,840,000 34,681,000 -- 257,000 2,840,000 34,424,000
Standardized Measure of Discounted Future Net Cash Flows Relating to Pro Forma
Proved Oil and Gas Reserves
The standardized measure of discounted future net cash flows ("standardized
measure") is prepared using assumptions required by the Financial Accounting
Standards Board. Such assumptions include the use of year-end prices for oil and
gas and year-end costs for estimated future development and production
expenditures to produce year-end estimated proved reserves. Discounted future
net cash flows are calculated using a 10% rate.
The standardized measure does not represent our estimate of future net cash
flows or the value of proved oil and gas reserves. Probable and possible
reserves, which may become proved in the future, are excluded from the
calculations. Furthermore, year-end prices, used to determine the standardized
measure of discounted cash flows, are influenced by seasonal demand and other
factors and may not be the most representative in estimating future revenues or
reserve data.
Pro Forma Standardized Measure of Discounted Future Net Cash Flows at
December 31, 2004
2004
-----------------
Future cash inflows $ 311,981,000
Future production and development costs (155,107,000)
Future income tax expenses (44,252,000)
-----------------
Future net cash flows 112,622,000
10% annual discount for estimated timing of cash flow (48,468,000)
-----------------
Standardized measure of discounted future net cash flows $ 64,154,000
=================
Pro Forma Changes in Standardized Measure of Discounted Future Net Cash
Flows
Sales of oil and gas produced, net of production costs $ (23,183,000)
Net changes in prices and production costs 10,192,000
Extensions, discoveries and improved recovery 7,857,000
Revisions of previous quantity estimates (92,000)
Reserves purchased, net of development costs 2,238,000
Net change in development costs (4,080,000)
Reserves sold (13,299,000)
Accretion of discount 6,459,000
Net change in income taxes 5,118,000
Other (308,000)
Net change (9,098,000)
Standardized measure of discounted future net cash flow:
Beginning of year 73,252,000
----------
End of year $ 64,154,000
=================
F-6