Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE - ASSET PURCHASE AGREEMENT - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex9901.htm |
| EX-99.4 - UNAUDITED PRO FORMA FINANCIAL DATA - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex9904.htm |
| EX-23.2 - CONSENT - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex2302.htm |
| EX-99.2 - PRESS RELEASE - COMMITMENT LETTER FOR BMO CAPITAL MARKETS - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex9902.htm |
| EX-23.1 - CONSENT - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex2301.htm |
| EX-99.3 - AUDITED FINANCIAL STATEMENTS - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex9903.htm |
| EX-2.1 - ASSET PURCHASE AGREEMENT - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex0201.htm |
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
___________
Date of
Report (Date of earliest event reported): October 23, 2009
___________
MAGNUM
HUNTER RESOURCES CORPORATION
(Exact
Name of Registrant as Specified in its Charter)
|
Delaware
(State
or Other Jurisdiction of Incorporation)
|
001-32997
(Commission
File Number)
|
86-0879278
(I.R.S.
Employer Identification Number)
|
777
Post Oak Boulevard, Suite 910
Houston,
Texas 77056
(Address
of principal executive offices, including zip code)
(832) 369-6986
(Registrant’s
telephone number, including area code)
Not
applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations 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))
Item
1.01. Entry
into a Material Definitive Agreement.
On
October 28, 2009,
Magnum Hunter Resources Corporation, a Delaware corporation (the “Company”),
announced that it has signed an Asset Purchase Agreement (the "Agreement"), dated October
28, 2009, to acquire
substantially all of the assets of Triad Energy Corporation, a West Virginia
corporation (“Triad”),
and certain of its affiliated entities. The assets being acquired
primarily consist of oil and gas property interests in Kentucky, Ohio and West
Virginia.
Pursuant
to the terms of the Agreement, Triad Hunter, LLC, a wholly-owned subsidiary of
the Company formed for purposes of the acquisition, will acquire the assets for
aggregate consideration of approximately $81 million, consisting of $8 million
in cash paid to Triad, $15 million of redeemable convertible preferred stock
that will be issued by the Company to Triad or its designees, and the Company’s
assumption or refinancing of approximately $58 million of bank debt of Triad and
its affiliated entities. In addition, the Company will assume certain
liabilities associated with the acquired assets. As Triad and certain of its
affiliated entities have been operating under Chapter 11 protection since
December 2008, the Agreement does not include customary indemnification
provisions, but does contain closing conditions and representations and
warranties that are customary for a transaction of this
nature.
Following
the signing of the Agreement, Triad and certain of its affiliated entities will
file the applicable petitions, motions and other documents to approve the
Agreement with the United States Bankruptcy Court for the Southern District of
Ohio, Eastern Division (the “Bankruptcy
Court”), where Triad and certain of its affiliated entities filed a
voluntary petition for relief under Chapter 11 of the United States Bankruptcy
Code on December 31, 2008. The
Bankruptcy Court will conduct a court-supervised auction process in which Triad
will seek competing bids to achieve the highest price possible for the
assets. The Agreement is also subject to certain other
closing conditions. Accordingly, there can be no assurance that the
transaction will close. Subject to such approvals and conditions, it
is anticipated that the transaction will close in January
2010.
In
addition, the Agreement further contemplates that the parties or their
affiliates will enter into a number of ancillary agreements and arrangements
related to the transaction, including, without limitation, (i) the Company will
deliver to Triad a signed commitment letter to obtain financing for a new term
loan facility with respect to the debt owed by Triad and certain of its
affiliates (which commitment letter is described below); (ii) the Company will
provide Triad with evidence that it will be able to issue additional common
equity of not less than $10 million to be funded prior to the closing of the
transaction to fund the working capital needs of Triad’s operating assets; (iii)
the Company will enter into employment agreements with certain key employees of
Triad and certain of its affiliated entities; and (iv) Company will nominate
James R. Bryden, President of Triad, for election to the Company’s Board of
Directors, effective as of the closing of the transaction.
The
description of the Agreement set forth above does not purport to be complete and
is qualified in its entirety by reference to the Agreement filed as Exhibit 2.1
to this Current Report on Form 8-K, which is incorporated herein by
reference.
The press
release announcing the signing of the Agreement is attached to this Current
Report on Form 8-K as Exhibit 99.1.
Item
8.01 Other Events.
The Company is also filing this Current
Report on Form 8-K in order to provide certain supplemental information for
potential investors and to incorporate such information by reference in pending
and future registration statements under the Securities Act of 1933, as
amended.
Commitment
Letter with BMO Capital Markets
On October 23, 2009, the Company
entered into a commitment letter (the “Commitment
Letter”) pursuant to which BMO Capital Markets (“BMOCM”)
has committed, subject to the terms and conditions set forth in the Commitment
Letter, to provide the Company with a $150 million three-year senior revolving
credit facility secured by the Company’s assets (the “Senior Credit
Facility”). The initial borrowing base under the Senior Credit
Facility is expected to be $25 million, subject to adjustment from time to time
based upon the values assigned to the proved reserves attributable to the
Company’s and certain of its subsidiaries’ oil and gas
properties. BMOCM will act as Lead Arranger, Book Runner and
Administrative Agent for the Senior Credit Facility. The Senior
Credit Facility will be guaranteed by certain subsidiaries of the
Company.
BMOCM’s commitment is subject to a
variety of customary closing conditions, including entering into definitive
documentation for the Senior Credit Facility no later than November 15,
2009. Accordingly, there can be no assurance that the Company will
enter into the Senior Credit Facility or that the Senior Credit Facility will
occur on the terms and conditions described herein. The Company has
agreed to pay certain fees to BMOCM in the event closing occurs under the Senior
Credit Facility, in addition to reimbursement of the costs and expenses
(including legal fees) incurred by BMOCM regardless of whether the Senior Credit
Facility closes.
The Company intends to use the proceeds
of the Senior Credit Facility for general corporate purposes and the acquisition
of crude oil and natural gas properties, including those in connection with the
purchase of Triad’s assets (as described above).
The press release announcing the
signing of the Commitment Letter is attached to this Current Report on Form 8-K
as Exhibit 99.2.
Triad
Energy Corporation Financial Data
Triad’s
audited consolidated financial statements and related notes for the years ended
December 31, 2008, 2007 and 2006 are attached as Exhibit 99.3 to this Current
Report on Form 8-K and incorporated herein by reference. In addition,
the unaudited pro forma balance sheet of the Company as of June 30, 2009 and the
unaudited pro forma income statement for the year ended December 31, 2008 and
the six month period ended June 30, 2009, which each give effect to (i) the
purchase of Triad’s assets (including the issuance of redeemable convertible
preferred stock by the Company to Triad and its designees as part of the
consideration for the assets), (ii) the incurrence of indebtedness by the
Company pursuant to the Senior Credit Facility (as described above), (iii) the
Company’s proposed issuance of an additional $10 million in common equity and
(iv) the proposed issuance of additional common equity expected to occur at or
near the closing of the Agreement, are attached as Exhibit 99.4 to this Current
Report on Form 8-K and incorporated herein by reference. The
information attached hereto as Exhibits 99.3 and 99.4 are collectively referred
to as the “Financial
Information.” The
Financial Information includes TriTex Energy, L.L.C., an affiliate of Triad, the
assets of which are not being acquired by the Company pursuant to the Agreement,
and does not include Alpha Drilling Ltd., an affiliate of Triad, the assets of
which are being acquired by the Company pursuant to the
Agreement. The Financial Information should be read in
conjunction with the notes thereto and with the consolidated financial
statements of the Company and the notes thereto as filed with the Company’s
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.
Forward-Looking
Statements
This
Current Report on Form 8-K (including the information included or incorporated
by reference herein) includes “forward-looking statements” within the meaning of
the safe harbor provisions of the United States Private Securities Litigation
Reform Act of 1995. Such statements may include, but are not limited
to, statements about the benefits of the proposed agreement between the Company
and Triad, including future financial and operating results, the plans,
objectives, expectations and intentions of the combined company and other
statements that are not historical facts. Such statements are based
upon the current beliefs and expectations of the Company’s and Triad’s
management and are subject to significant risks and
uncertainties. Actual results may differ from those set forth in the
forward-looking information.
The following factors, among others
could cause actual results to differ from those set forth in the forward-looking
statements: the possibility that the expected synergies from the proposed
acquisition of the Triad assets will not be realized, or will not be realized
within the expected time period, due to, among other things, the risk that the
assets will not be integrated successfully, disruption from the asset purchase
making it more difficult to maintain business and operational relationships, the
possibility that the asset purchase does not close, including, but not limited
to, due to the failure to satisfy the closing conditions or obtain the necessary
bankruptcy court approvals, the Company’s and Triad’s ability to accurately
predict future market conditions; the actual terms of the financing required for
the asset purchase and/or the failure to obtain such financing, and the risks of
new and changing regulation of the oil and gas industry. Additional
factors that could cause results to differ materially from those described in
the forward-looking statements can be found in the Company’s Annual Report on
Form 10-K, as amended, for the year ended December 31, 2008, the Registration
Statement on Form S-3, as amended, filed by the Company on September 16, 2009,
and the Company’s other filings with the Securities and Exchange Commission from
time to time. You are cautioned not to place undue reliance on forward-looking
statements. We undertake no obligation to publicly update or revise
any forward-looking statement.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit
Number
|
Description
|
|
2.1
|
Asset
Purchase Agreement, dated as of October 28, 2009
|
|
23.1
|
Consent
of Malone & Bailey, PC on the December 31, 2008 and 2007 audited
financial statements of Mangum Hunter Resources
Corporation
|
| 23.2 |
Consent
of Appalachian Basin CPAs, Inc. on the December 31, 2008, 2007 and 2006
audited financial statements of Triad Energy
Corporation
|
|
99.1
|
Press
Release, dated October 29, 2009, regarding Asset Purchase
Agreement
|
|
99.2
|
Press
Release, dated October 26, 2009, regarding Commitment
Letter
|
|
99.3
|
Triad
Energy Corporation audited consolidated financial statements and related
notes for the years ended December 31, 2008, 2007 and
2006
|
|
99.4
|
Unaudited
pro forma financial statements and related
notes
|
SIGNATURE
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.
| MAGNUM HUNTER RESOURCES CORPORATION | |||
|
Date:
October 28, 2009
|
By:
|
/s/ Gary C. Evans | |
| Name: Gary C. Evans | |||
| Title: Chairman of the Board of Directors | |||
EXHIBIT
INDEX
|
Exhibit
Number
|
Description
|
|
2.1
|
Asset
Purchase Agreement, dated as of October 28, 2009
|
|
23.1
|
Consent
of Malone & Bailey, PC on the December 31, 2008 and 2007 audited
financial statements of Magnum Hunter Resources
Corporation
|
| 23.2 |
Consent
of Appalachian Basin CPAs, Inc. on the December 31, 2008, 2007 and 2006
audited financial statements of Triad Energy
Corporation
|
|
99.1
|
Press
Release, dated October 29, 2009, regarding Asset Purchase
Agreement
|
|
99.2
|
Press
Release, dated October 26, 2009, regarding Commitment
Letter
|
|
99.3
|
Triad
Energy Corporation audited consolidated financial statements and related
notes for the years ended December 31, 2008, 2007 and
2006
|
|
99.4
|
Unaudited
pro forma financial statements and related
notes
|