8-K 1 h83593e8-k.txt BARGO ENERGY COMPANY - DATED JANUARY 12, 2001 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 JANUARY 12, 2001 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) BARGO ENERGY COMPANY (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER) TEXAS 0-8609 87-0239185 (STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 700 LOUISIANA, SUITE 3700 HOUSTON, TEXAS 77002 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE) (713) 236-9792 (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE) NOT APPLICABLE (FORMER NAME AND FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) 2 ITEM 1. CHANGES IN CONTROL OF REGISTRANT NOT APPLICABLE ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS ON JANUARY 12, 2001, WE COMPLETED THE SALE OF OUR CALIFORNIA PROPERTIES LOCATED IN KERN COUNTY, CALIFORNIA FOR $39.45 MILLION BEFORE FINAL CLOSING ADJUSTMENTS. THE EFFECTIVE DATE OF THE SALE IS DECEMBER 1, 2000. AGGREGATE CURRENT NET PRODUCTION FROM THE CALIFORNIA PROPERTIES TOTALS APPROXIMATELY 550 BARRELS OF OIL AND 4.9 MILLION CUBIC FEET OF GAS PER DAY. ITEM 3. BANKRUPTCY OR RECEIVERSHIP NOT APPLICABLE ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT NOT APPLICABLE ITEM 5. OTHER EVENTS NOT APPLICABLE. ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS NOT APPLICABLE ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. (b) PRO FORMA FINANCIAL INFORMATION. 2 3 BARGO ENERGY COMPANY UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS The following unaudited pro forma combined statements of operations for the nine months ended September 30, 2000 and the year ended December 31, 1999 reflect the disposition of the California Properties by Bargo Energy Company (Bargo) that occurred in January 2001 as if the disposition occurred January 1, 1999. The pro forma statements of operations adjust the operating results of Bargo for the nine months ended September 30, 2000 and the year ended December 31, 1999 to exclude the historical revenues and direct operating expenses of the California Properties for the same periods. The pro forma statements of operations also reflect the following transactions: (1) the acquisition of the East Texas properties in September 1999 and (2) the Texaco acquisition on March 31, 2000. These items are reflected in the pro forma statements of operations as if they had occurred January 1, 1999. The accompanying unaudited pro forma combined balance sheet as of September 30, 2000 includes the disposition of the California Properties as if such disposition had occurred on September 30, 2000. These unaudited pro forma financial statements should be read in conjunction with the historical financial statements of Bargo as filed in its periodic reports with the Securities and Exchange Commission. These unaudited pro forma financial statements should not be construed to be indicative of future results or results that actually would have occurred if the transactions had occurred at the dates presented. 3 4

~~EXHIBIT~~UNAUDITED ~~NUMBER~~COMBINED ~~DESCRIPTION~~BALANCE SHEET (IN THOUSANDS) Bargo Actual California Pro forma September 30, 2000 Properties September 30, 2000 ------------------ ---------- ------------------ *Assets Current assets: Cash $ 2.1,175 ~~Agreement~~$ 2,175 Accounts receivable $ 23,385 $ 23,385 Other current asset $ -- $ -- -------- -------- -------- Total current assets $ 25,560 $ -- $ 5,560 -------- -------- -------- Property and ~~Plan~~equipment, ofat ~~Merger~~cost: Oil and gas properties (full cost method) $193,679 ~~dated~~$(39,450)(f) as$154,229 ofOther ~~January~~property 24and equipment $ 832 $ 832 -------- -------- -------- $194,511 ~~2001~~$(39,450) by$155,061 Less - accum depreciation, depletion and ~~between~~amortization ~~Bargo~~$(18,515) ~~Energy~~$(18,515) ~~Company~~-------- -------- -------- Total property and ~~Bellwether~~equipment ~~Exploration~~$175,996 ~~Company~~$(39,450) *$136,546 -------- -------- -------- Goodwill $ 1,642 $ -- $ 1,642 Other noncurrent assets $ 9,662 $ -- $ 9,662 TOTAL ASSETS $212,860 $(39,450) $173,410 ======== ======== ======== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 13,538 $ 13,538 Current portion of notes Payable $ -- $ -- Accrued income taxes payable $ 7,582 $ 7,582 -------- -------- -------- Total current liabilities $ 21,120 $ -- $ 21,120 -------- -------- -------- Long Term Notes payable - senior $118,750 $(39,450)(f) $ 79,300 Deferred Tax Liability $ 3,317 $ -- $ 3,317 Redeemable Preferred Stock $ 56,021 $ -- $ 56,021 Stockholders' Equity Common Stock $ 921 $ 921 Additional paid-in capital $ 6,878 $ 6,878 Treasury stock $ (2.,041) $ (2,041) ~~Form~~Retained ofearnings ~~Voting~~(deficit) ~~Agreement~~$ *99.17,894 ~~Press~~$ ~~Release~~7,894 ~~dated~~-------- ~~January~~-------- 25-------- Total Stockholders Equity $ 13,652 ~~2001~~$ -- $ 13,652 -------- -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $212,860 $(39,450) $173,410 ======== ======== ========

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS. 4 5

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS. 5 6

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS. 6 7 BARGO ENERGY COMPANY NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS The pro forma adjustments are described as follows: (a) Reflects the recognition of revenues and direct operating expenses for the respective periods. (b) Adjustment to depletion and depreciation resulting from the effects of transactions as if such transactions occurred January 1, 1999. Adjustments were calculated based on historical depletion and depreciation rates per BOE. (c) Adjustment to general and administrative expense directly attributable to the properties acquired / disposed of in the transactions. (d) Adjustment to record interest expense that would have been incurred if the Company had additional borrowings to fund the acquisitions. In addition, adjustments to reflect a reduction in interest expense based on reduced borrowings due to the disposition. The applicable interest rate was 9% at September 30, 2000. A 1/8 percent increase in the accrued interest rate would increase net pro forma interest expense by approximately $212,000 and $40,000 for the year ended December 31, 1999 and the nine months ending September 30, 2000, respectively. (e) Reflects pro forma income tax provision, assuming a 38% rate based upon the pro forma change in pre-tax income. (f) Reflects proceeds of $39.45 million as a reduction of the oil and gas properties full cost pool and a corresponding reduction of debt at September 30, 2000. The consideration to be received has not been reduced by the net cash flows from the properties for the period from December 1, 2000 to January 12, 2001 which will be treated as a reduction in the purchase price. (C) EXHIBITS EXHIBIT NUMBER TITLE OF DOCUMENTS 2. PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OF SUCCESSION 2.1 PURCHASE AND SALE AGREEMENT DATED NOVEMBER 10, 2000 BETWEEN FUTURE CAL-TEX CORPORATION AND MERIT PARTNERS, L.P. AND MERIT ENERGY PARTNERS III, L.P. ITEM 8. CHANGE IN FISCAL YEAR NOT APPLICABLE 7 8 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED HEREUNTO DULY AUTHORIZED. BARGO ENERGY COMPANY BY: /s/ JONATHAN M. CLARKSON ------------------------------- JONATHAN M. CLARKSON, PRESIDENT DATED: JANUARY 26, 2001 9 INDEX TO EXHIBITS

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