Attached files
| file | filename |
|---|---|
| EX-3.1 - CERTIFICATE OF DESIGNATION - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex0301.htm |
| EX-99.1 - PRESS RELEASE - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex9901.htm |
| EX-99.2 - PRO FORMA FINANCIAL INFORMATION - MAGNUM HUNTER RESOURCES CORP | magnum_8k-ex9902.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):
February
16, 2010
___________
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)
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:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
- 1
-
Item
2.01. Completion of
Acquisition or Disposition of Assets.
As
previously disclosed, Magnum Hunter Resources Corporation (the “Company”)
entered into an Asset Purchase Agreement, dated October 28, 2009, as amended
(the “Agreement”), to acquire substantially all of the assets (the
“Acquisition”) of Triad Energy Corporation, a West Virginia corporation, and
certain of its affiliated entities (collectively, “Triad”). On
February 12, 2010, the Company completed the Acquisition pursuant to the terms
of the Agreement and the Order Confirming Joint Plan of Reorganization of Triad
Resources, Inc., et al. (the “Bankruptcy Order”), entered on January 28, 2010 by
the United States Bankruptcy Court for the Southern District of Ohio, Eastern
Division.
The
acquired assets consist primarily of oil and gas property interests in
approximately 2,000 operated wells and include over 88,000 net mineral acres
located in the states of Kentucky, Ohio, and West Virginia, a natural gas
pipeline, two salt water disposal facilities, three drilling rigs, workover
rigs, and other oilfield equipment. Pursuant to the terms of the
Agreement, Triad Hunter, LLC, a wholly-owned subsidiary of the Company formed
for purposes of the Acquisition, and certain of its affiliates acquired the
assets for aggregate consideration of approximately $81
million. The $81 million total purchase price consisted of (i) the
repayment of $55 million of Triad senior debt via drawing under the Company’s
existing $150 million revolving commercial bank line of credit ($70 million
borrowing base) and assumption of approximately $3 million of equipment
indebtedness, (ii) the issuance to Triad’s Secured Creditors (as defined below)
of $15 million of the Company’s Series B Redeemable Convertible Preferred Stock
(the “Preferred Stock”), and (iii) the payment to Triad of $8 million in
cash.
The
foregoing description of the Agreement is qualified in its entirety by reference
to the full text of the Agreement, as amended, a copy of which was filed as
Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed on October 29,
2009 and which is incorporated herein by reference.
In
connection with the Acquisition, the Company amended and restated its senior
credit facility, which will be summarized in a subsequent Current Report on Form
8-K.
Item
3.02. Unregistered
Sales of Equity Securities.
In
connection with the Acquisition and pursuant to the Bankruptcy Order, on
February 12, 2010, the Company issued, in the aggregate, 4,000,000 shares of its
Preferred Stock, with an aggregate liquidation preference of $15 million, to
Allied Irish Banks, P.L.C., Capital One, N.A., and Citibank, N.A. (collectively,
the “Secured Creditors”), each of which was a secured creditor of Triad in its
Chapter 11 bankruptcy proceedings. The Preferred Stock was issued as
partial consideration for the Acquisition and served as partial satisfaction of
the bankruptcy claims of the Secured Creditors against Triad.
The
Preferred Stock was issued pursuant to the Bankruptcy Order and an exemption
from registration under Regulation D under the Securities Act of 1933
(“Regulation D”). The Secured Creditors are accredited investors
within the meaning of Rule 501 of Regulation D, and the Preferred Stock was not
sold by any form of general solicitation or general advertising.
- 2
-
Pursuant
to the Certificate of Designation for the Preferred Stock (the “Certificate of
Designation”), the Preferred Stock is entitled to dividends at a rate of 2.75%
per annum payable quarterly (i) in shares of Preferred Stock or (ii) subject to
the receipt of any required consent under the Company’s senior credit facility,
in cash. At any time within twenty years of the date of issuance, the
holders of shares of the Preferred Stock may convert any or all of their
Preferred Stock into shares of the Company’s common stock (the “Common Stock”),
at a conversion ratio of one share of Preferred Stock to one share of Common
Stock. The Preferred Stock is subject to redemption by the Company at
a price of $3.75 per share (a) at any time following the two-year anniversary of
the date on which such shares of Preferred Stock were issued, or (b) if the
average trading price of the Common Stock equals or exceeds $4.74 per share for
five consecutive trading days. The Preferred Stock is subject to
redemption at the option of the holders at a price of $3.75 per share at any
time between the two-year anniversary and the twenty-year anniversary of the
date on which such shares of Preferred Stock were issued.
The
Preferred Stock enjoys a liquidation preference of the greater of (i) its $3.75
per share stated value plus all accrued and unpaid dividends or (ii) the amount
payable per share of Common Stock upon liquidation if the holder of the
Preferred Stock had converted such shares of Preferred Stock into Common Stock
immediately prior to the liquidation event, together with all accrued and unpaid
dividends thereon. The Preferred Stock has no voting rights except in
certain limited circumstances.
The
foregoing description of the terms of the Preferred Stock is qualified in its
entirety by reference to the full text of the Certificate of Designation, a copy
of which is filed with this Current Report on Form 8-K as Exhibit
3.1.
Item
5.03. Amendments to
Articles of Incorporation.
The
description of the Certificate of Designation set forth above under Item 3.02 is
incorporated herein by reference.
On
February 11, 2010, the Company filed the Certificate of Designation with the
Secretary of State of the State of Delaware. The Certificate of
Designation is filed herewith as Exhibit 3.1 and is incorporated by reference
into this Item 5.03.
Item
8.01. Other
Events.
On
February 16, 2010, the Company issued a press release announcing the
consummation of the Acquisition, a copy of which is filed with this Current
Report on Form 8-K as Exhibit 99.1.
The
historic and pro forma financial statements required by Item 9.01 will be timely
filed in a subsequent Current Report on Form 8-K or another filing pursuant to
the Securities Exchange Act of 1934.
- 3
-
The
Company is including in this Item 8.01 of this Current Report on Form 8-K
certain supplemental financial information regarding the combined company for
potential investors and to incorporate such information by reference in pending
and future registration statements under the Securities Act of
1933. The unaudited pro forma balance sheet of the Company as of
September 30, 2009 and the unaudited pro forma income statement for the year
ended December 31, 2008 and the nine month period ended September 30, 2009,
which each give effect to (i) the purchase of Triad’s assets (including the
issuance of the 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 new revolving credit facility, (iii) the
Company’s issuance of additional shares of common stock between October 31, 2009
and February 10, 2010, and (iv) the issuance of shares of series C preferred
stock, are attached as Exhibit 99.2 to this Current Report on Form 8-K and
incorporated herein by reference (collectively, the “Pro Forma Financial
Information”). Sections (iii) and (iv) above were included in the Pro
Forma Financial Information as both were closing conditions under the
Agreement. The Pro Forma Financial Information includes TriTex
Energy, L.L.C. and TriTex Resources L.L.C., affiliates of Triad, the assets of
which were not acquired by the Company pursuant to the Agreement, and does not
include Alpha Drilling Ltd., an affiliate of Triad, the assets of which were
acquired by the Company pursuant to the Agreement. The Pro Forma Financial
Information should be read in conjunction with the notes thereto, the Company’s
Current Reports on Form 8-K, filed on October 28, 2009 and November 16, 2009,
and 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 combined
company’s plans, objectives, expectations, and intentions 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 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 filed by the Company on September 16, 2009, as amended and
supplemented from time to time, 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 such statements. We
undertake no obligation to publicly update or revise any forward-looking
statement.
- 4
-
Item
9.01. Financial
Statements and Exhibits.
|
Exhibit
No.
|
Description
|
|
3.1
|
Certificate
of Designation for Series B Redeemable Convertible Preferred
Stock
|
|
99.1
|
Press
Release dated February 16, 2010
|
|
99.2
|
Pro
Forma Financial Information
|
- 5
-
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: February
16, 2010
|
By:
|
/s/ Gary C. Evans | |
| Name: Gary C. Evans | |||
| Title: Chairman and Chief Executive Officer | |||
- 6
-
EXHIBIT INDEX
|
Exhibit
No.
|
Description
|
|
3.1
|
Certificate
of Designation for Series B Redeemable Convertible Preferred
Stock
|
|
99.1
|
Press
Release dated February 16, 2010
|
|
99.2
|
Pro
Forma Financial Information
|
- 7
-