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): November 30, 2004
PARALLEL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-13305 75-1971716
(Commission file number ) (IRS employer identification number)
1004 N. Big Spring, Suite 400, Midland, Texas 79701
(Address of principal executive offices) (Zip code)
(432) 684-3727 (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 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))
Item 1.01. Entry into a Material Definitive Agreement.
In our Form 8-K Reports filed with the Securities and Exchange
Commission on September 22, 2004 and October 20, 2004, we reported that
Parallel, L.P., a wholly owned subsidiary of Parallel Petroleum Corporation
(collectively, "Parallel"), had entered into purchase and sale agreements with,
and acquired working and net revenue interests in producing oil and gas
properties from, Caprock Oil & Gas, L.P. and Bradley W. Bunn. As reported, all
of the properties are located in Andrews and Gaines Counties, Texas in the
Permian Basin of west Texas.
After Parallel entered into agreements with Caprock Oil & Gas, L.P.
and Bradley W. Bunn to acquire their interests in the properties, Parallel then
offered to purchase all of the remaining working and net revenue interests in
the same properties from all of the other working interest owners. In response
to Parallel's offer, on November 30, 2004, Parallel, L.P. entered into separate
Purchase and Sale Agreements with twenty-seven other unaffiliated working
interests owners. Under these agreements, Parallel, L.P. agreed to purchase an
additional 23.95% average working interest and 18.19% average net revenue
interest owned by each of the other owners. If all of the transactions are
closed, Parallel's average working interest in these properties will increase
from approximately 56.6% to approximately 80.55%, and its average net revenue
interest will increase from 43.8% to approximately 61.99%. The purchase price
amounts payable by Parallel, L.P. under these agreements range from $5,900 to
$1,101,773. The total purchase price, excluding adjustments, for all of the
additional interests in the properties is $5,661,108. The effective date of
these acquisitions will be October 1, 2004.
Under these Purchase and Sale Agreements, Parallel will acquire
approximately 5,360 gross (1,283 net) acres and 67 gross (16.04 net) producing
oil and gas wells. The properties consist of 25 oil and gas leases and produce
from the Queen and San Andres formation at depths of approximately 4,200 to
4,900 feet. The additional interests that will be acquired under these
agreements represent an estimated 909,000 equivalent barrels of proved oil and
gas reserves, with current production of approximately 90 equivalent barrels of
oil per day.
All but two of the transactions are scheduled to close on December
31, 2004 or earlier as any of the respective parties may agree. Two transactions
are scheduled to close on or before January 31, 2005. Completion of each
transaction is subject to customary closing conditions, including the absence of
title defects, environmental review and approval by Parallel, the accuracy of
the representations and warranties of the parties and the absence of any legal
proceedings affecting the transactions contemplated by each respective Purchase
and Sale Agreement.
Parallel has no relationship with the sellers, other than in respect
of the Purchase and Sale Agreements.
The purchase price will be financed with loan proceeds drawn under
Parallel's revolving credit facility provided by First American Bank, SSB, BNP
Paribas, Citibank, F.S.B. and Western National Bank.
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The oil and gas properties to be acquired by Parallel under the
Purchase and Sale Agreements will be pledged as additional collateral to further
secure the payment and performance of Parallel's indebtedness and obligations
under its revolving credit facility.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
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10.1 Purchase and Sale Agreement, dated as of
September 21, 2004, between Parallel, L.P.
and Eastland Oil Company, which agreement is
substantially identical to the twenty-six
other purchase and sale agreements entered
into between Parallel, L.P. and the other
sellers parties thereto, except as described
in Schedule A hereto.
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Schedule A
Parallel, L.P. has entered into twenty-seven separate Purchase and
Sale Agreements with unaffiliated third parties. Set forth as Exhibit 10.1 to
this Current Report on Form 8-K is the Purchase and Sale Agreement entered into
between Parallel, L.P. and Eastland Oil Company. All of the Purchase and Sale
Agreements are substantially identical, except for (1) the name of each seller,
(2) immaterial differences in certain representations, warranties and exhibits
in or to the Purchase and Sale Agreements, (3) the size of the working interest
being sold by each respective seller, (4) the purchase price payable to each
respective seller and (5) the descriptions of the specific oil and gas leases in
which each seller owns an interest.
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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 thereunto duly authorized.
Dated: December 3, 2004
PARALLEL PETROLEUM CORPORATION
By: /s/ Larry C. Oldham
-------------------------
Larry C. Oldham, President
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EXHIBIT INDEX
Exhibit No. Description
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10.1
Purchase and Sale Agreement, dated as of September
21, 2004, between Parallel, L.P. and Eastland Oil
Company, which agreement is substantially identical
to the twenty-six other purchase and sale
agreements entered into between Parallel, L.P. and
the other sellers parties thereto except as
described in Schedule A hereto.
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