Filed pursuant to Rule 424(b)(3)
Registration No. 333-68381
Registration No. 333-45586
Registration No. 333-91496
5,207,729 Shares
Beta Oil & Gas, Inc.
Common Stock
-------------------
Up to 5,207,729 shares of our common stock (including up to 906,411
shares that may be issued upon conversion of our preferred stock and upon
exercise of outstanding stock purchase warrants issued in our private
placement of those securities in 2001) may be offered for sale from time to
time by the selling stockholders named on page 13 of this prospectus, or their
transferees. We will not receive any of the proceeds from the sale of these
shares. There are currently 604,271 shares of our preferred stock outstanding,
each of which is currently convertible, at the option of the holder, into one
share of common stock.There are 872,958 stock purchase warrants outstanding,
each of which entitles the holder to purchase one share of our common stock.
Sales of shares by the selling stockholders may be effected from
time to time in one or more transactions, including block trades, in the
over-the-counter market, in negotiated transactions or in a combination of any
of these methods of sale. The selling price of the shares may be at the market
price prevailing at the time of sale, at a price related to such prevailing
market price or at a negotiated price. The selling stockholders may be deemed
"underwriters" within the meaning of the Securities Act of 1933. See "Plan of
Distribution" on page 24 of this prospectus. We have agreed to indemnify the
selling stockholders against certain civil liabilities, including liabilities
under the Securities Act of 1933.
Our common stock is listed on the Nasdaq National Market under the
symbol "BETA". The last reported bid price of the common stock on the Nasdaq
National Market of June 25, 2002, was $2.17 per share.
Investing in the common stock involves certain risks. See "Risk
Factors" beginning on page 4 in this prospectus.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
The date of this Prospectus is July 17, 2002.
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TABLE OF CONTENTS
Page
Where You Can Find More Information....................................2
About Beta Oil & Gas, Inc..............................................4
Risk Factors...........................................................4
Forward-Looking Statements............................................10
Use of Proceeds.......................................................11
Selling Stockholders..................................................12
Plan of Distribution..................................................24
Legal Opinion ........................................................25
Experts...............................................................25
You should rely only on the information provided in this prospectus. We
have not authorized anyone else to provide you with different information. This
prospectus is not an offer to sell these shares of common stock and it is not
soliciting an offer to buy these shares of common stock in any state where the
offer or sale is not permitted. You should not assume that the information in
this prospectus is accurate as of any date other than the date on the cover page
of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We file annual reports, quarterly reports, special reports, and other
information with the Securities and Exchange Commission ("SEC"). You may read
and copy reports, statements or other information at the SEC's public reference
rooms in Washington, D.C. (at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549), and at the SEC's regional offices located in New York, New York (at
233 Broadway, New York, New York 10279) or Chicago, Illinois (at Suite 1400, 500
West Madison, Chicago, Illinois 60661). Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Our SEC filings are also
available to the public from commercial document retrieval services and at the
web site maintained by the SEC at "www.sec.gov". Reports, proxy and information
statements and other information concerning us may also be inspected at The
Nasdaq Stock Market located at 1735 K Street, N.W., Washington, DC 20006.
Information about Beta can also be found at our website at "www.betaoil.com"
This prospectus, which constitutes a part of a registration statement on
Form S-3 filed by us with the SEC under the Securities Act of 1933, omits
certain of the information set forth in the registration statement. Accordingly,
you should refer to the registration statement and its exhibits for further
information with respect to us and our common stock. Copies of the registration
statement and its exhibits are on file at the offices of the SEC. This
prospectus contains statements concerning documents filed as exhibits. For the
complete text of any of these documents, we refer you to the copy of the
document filed as an exhibit to the registration statement.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to other documents which we have filed. The information
incorporated by reference is considered to be part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede the information in this prospectus. We incorporate by reference the
documents listed below and any future filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
all of the shares offered by this prospectus have been sold or we otherwise
terminate the offering of these shares:
2
[X] Our Annual Report on Form 10-K for the year ended December 31, 2001;
|X| Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002;
|X| Our definitive proxy statement, as filed with the Securities and
Exchange Commission on April 11, 2002 in connection with our
solicitation of proxies for the annual meeting of stockholders held
June 1, 2002;
|X| The description of our common stock contained in our registration
statement on Form 8-A, dated July 1, 1999, including any amendment or
report filed before or after the date of this prospectus for the
purpose of updating the description.
We will provide, without charge, to each person, including a beneficial
owner, to whom a copy of this prospectus has been delivered, a copy of any of
the documents referred to above as being incorporated by reference. You may
request a copy of these filings by writing or telephoning us at the following
address:
Virginia Cherry, Secretary
Beta Oil & Gas, Inc.
6120 South Yale, Suite 813
Tulsa, Oklahoma 74136
(918) 495-1011
3
ABOUT BETA OIL & GAS, INC.
We are an independent oil and gas company engaged in the exploration,
development, production and acquisition of natural gas and crude oil. We are a
Nevada corporation formed in June 1997. Our operations are currently focused on
the exploration and development of oil and gas producing trends situated
primarily in Oklahoma, Texas, Louisiana and Kansas. We also have two wholly
owned subsidiaries: BETAustralia, LLC, which participates in the exploration for
oil and gas in Australia; and Beta Operating Company LLC, whose search for oil
and gas is concentrated in the continental United States, primarily in Oklahoma
and Texas. We currently own interests in approximately 318 gross wells, 187
wells net to our interest, in the Mid-Continent, Texas and Louisiana regions and
over 18,000 net acres located in these same areas for future exploration.
Our overall goal is to maximize Beta's value through profitable growth in
our oil and gas reserves. In 2001 and to date for 2002, our results from our
exploratory program have been disappointing, particularly our higher risk -
higher reward projects, and have not yielded any major reserve discoveries. With
this in mind, for 2002 we are combining with our exploration and development
program, an acquisition program targeting properties that we believe will
possess high development potential and will lower our risk profile for reserve
additions.
Our principal executive offices are located at 6120 South Yale, Suite 813,
Tulsa, OK 74136, and our telephone number is (918) 495-1011.
RISK FACTORS
You should carefully consider the following risk factors, in addition to
the other information set forth in this prospectus, before deciding to purchase
any shares of our common stock. Each of these risk factors could adversely
affect our business, operating results and financial condition, as well as
adversely affect the value of an investment in our common stock.
We have a limited operating history and developed property interests and have
incurred operating losses since inception.
We were incorporated in June, 1997. We have a limited operating history and
are subject to the risks associated with early stage companies. Since our
inception, we have incurred operating losses. As of March 31, 2002, we had an
accumulated deficit of $16.139 million. If we are unable to generate positive
cash flow from our oil and gas operations, we may continue to incur losses. Our
ability to achieve and maintain profitability is uncertain.
We are reliant on the skill, ability and decisions of third party operators to a
significant extent.
We currently operate approximately 53% of the producing wells in which we
own a working interest and we are a non-operating working interest owner in the
remaining 47%. With respect to the latter, we have entered into joint operating
agreements with third party operators for the conduct and supervision of
drilling, completion and production operations of those wells and for the
operation of those properties. The success of the drilling, development and
production of the oil and gas properties in which we have a non-operating
working interest is substantially dependent upon the decisions of such
third-party operators and their diligence to comply with various laws, rules and
regulations affecting such properties. The failure of any third-party operator
to
o make decisions,
o perform their services,
o discharge their obligations,
o deal with regulatory agencies, and
o comply with laws, rules and regulations affecting the
properties in which we have an interest, including
environmental laws and regulations
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in a proper manner could result in material adverse consequences to our interest
in any affected properties, including substantial penalties and compliance
costs. Such adverse consequences could result in substantial liabilities to us,
which could negatively affect our results of operations.
We have not and do not anticipate paying any dividends on our common stock in
the foreseeable future.
We have never paid any cash dividends on our common stock. We do not expect
to declare or pay any cash or other dividends in the foreseeable future on our
common stock. Holders of our preferred stock are entitled to receive cumulative
dividends at the annual rate of $0.74 per share when and as declared by our
board of directors. No dividends may be paid on our common stock unless all
cumulative dividends due on the preferred stock have been declared and paid. We
may also enter into credit agreements or other borrowing arrangements which may
restrict our ability to declare dividends on our common stock.
Various factors, including fluctuations in oil and gas prices and economic
conditions, could have a material adverse effect on our financial condition and
results of operations and may cause considerable volatility in the market price
of our common stock.
The market value of our common stock may vary significantly in response to
changes in our quarterly results of operations. We expect to experience
substantial fluctuations in oil and gas prices due to changes in the supply of
and demand for oil and gas, which may be caused by
o weather conditions,
o political conditions in the Middle East, South America, and other
regions,
o domestic and foreign reserves and supply of oil and gas,
o the price and availability of alternative fuels,
o the level of consumer demand, or
o general economic and market conditions.
In addition, our revenues will be affected by the success or failure of the
efforts to drill exploratory wells in the unproven prospects in which we have an
interest, the availability of a ready market for the oil and gas production from
the wells in which we have an interest and the proximity of such well sites to
pipelines and production facilities. Drilling, completion and other costs and
expenses will be affected by various market factors over which neither we nor
our third party operators may have any control. Due to the uncertainty of our
revenues, expenses and profits or losses, the market price of our stock may be
volatile in the future.
Our future capital expenditures could exceed those amounts budgeted and could
exceed our future funds available for those expenditures.
We project our 2002 capital expenditures to be approximately $7 million and
expect our cash flow from operations and funds received from
internally-generated prospects to fund those expenditures. Our planned capital
expenditures and/or administrative expenses could exceed those amounts budgeted
and could exceed the available cash sourced for those expenditures. While our
projected cash expenditures may be as projected, cash flow from operations could
be unfavorably impacted by lower than projected natural gas and crude oil prices
and/or lower than projected production rates. Additionally, lower natural gas
and crude oil prices could adversely impact our ability to raise any funds from
the sale of prospects. To the extent that the funds available from operations
and prospect sales are insufficient to fund our activity, it may be necessary to
raise additional funds through equity or debt financing. Any equity financing
could result in dilution to our then-existing shareholders. Sources of debt
financing may result in higher interest expense, further security interests in
our assets, other equity interest to our lenders and similar developments. Any
financing, if available, may be on terms unfavorable to us. If adequate funds
are not obtained, we may be required to reduce or curtail operations.
5
Our hedging activities could result in losses.
We have previously engaged in oil and gas hedging activities and intend to
continue to consider various hedging arrangements to realize commodity prices
which we consider protective or favorable. We currently have in place natural
gas collars covering 4,000 million British thermal units (MMBtu) of gas per day
through February 2003. The floor price is $2.30 per MMBtu and the ceiling price
is $2.91 per MMBtu. These contracts are costless and no net premium is received
in cash or as a favorable rate. For crude oil, we have in place collars covering
approximately 167 barrels a day through March 2003. The floor price is $20.50
per barrel and the ceiling price is $21.75 per barrel. As with the natural gas
contracts, the crude oil contracts are costless and no net premium is received
in cash or as a favorable rate. The impact of changes in the market price for
oil and gas on the average oil and gas prices received by us may be reduced from
time to time based on the level of our hedging activities. These hedging
arrangements may limit our potential gain if the market prices for oil and gas
were to rise substantially over the ceiling price established by the hedge. In
addition, our hedging arrangements expose us to the risk of financial loss in
certain circumstances, including instances in which (1) production is less than
expected or (2) the counterparties to our hedging arrangements fail to honor
their financial commitments.
We have substantial long-term indebtedness.
Under our current credit facility, which was acquired through the Red River
Energy merger, we have a total indebtedness outstanding of approximately $13.7
million with a current total borrowing capacity of $14.4 million. With a
reduction in commodity prices and a reduction in our proved developed reserves,
our borrowing capacity under this facility has not significantly increased and
the facility is not expected to be a material source of funds. We are currently
required to pay interest only on the amount outstanding on a monthly basis.
Should our proved developed reserves not materially increase and/or pricing
substantially decrease before the next re-determination date, our current
borrowing base may be reduced below the amount currently borrowed and
outstanding. If this event occurs we would be obligated to pay down the
outstanding amount to the re-determined borrowing capacity. We would rely on
cash flow from operations and funds generated from prospect sales to make this
pay down. Since the facility is secured by our producing oil and gas properties,
should we be unable to pay down the obligation at re-determination or maturity,
we could sustain a loss on our investment as a result of foreclosure by the
lender on the interests in these properties. The next re-determination date is
October 2002 and the credit facility matures in March 2004.
Our oil and gas activities are subject to various risks which are beyond our
control.
Our operations are subject to many risks and hazards incident to exploring
and drilling for, producing, transporting, marketing and selling oil and gas.
Although we or the third party operator of the properties in which we have an
interest may take precautionary measures, many of these risks and hazards are
beyond our control and unavoidable under the circumstances. Many of these risks
or hazards could materially and adversely affect our revenues and expenses,
production of oil and gas in commercial quantities, the rate of production and
the economics of the development of, and our investment in the prospects in
which we have or will acquire an interest. Any of these risks and hazards could
materially and adversely affect our financial condition, results of operations
and cash flows. Such risks and hazards include:
o human error, accidents, labor force and force majeure factors
that may cause personal injuries or death to persons and
destruction or damage to equipment and facilities,
o blowouts, fires, pollution and equipment failures that may
result in damage to or destruction of
wells, producing formations, production facilities and
equipment,
o unavailability of materials and equipment,
o engineering and construction delays,
o unanticipated transportation costs and delays,
o unfavorable weather conditions and hazards resulting from
unusual or unexpected geological or environmental conditions,
o environmental regulations and requirements,
o accidental leakage of toxic or hazardous materials, such as
petroleum liquids or drilling fluids into the environment,
6
o changes in laws and regulations, including laws and
regulations applicable to oil and gas activities or markets
for the oil and gas produced,
o fluctuations in supply and demand for oil and gas causing
variations within the prices we receive for our oil and gas
production,
o the internal and political decisions of OPEC and oil and gas
producing nations and their impact upon oil and gas prices.
As a result of these risks, expenditures, quantities and rates of
production, revenues and cash operating costs may be affected materially and
adversely and may differ materially from those anticipated by us.
We depend substantially on the continued presence of key personnel for critical
management decisions and industry contacts.
Our future performance will be substantially dependent on the performance
of our executive officers and key employees. The loss of the services of any of
our executive officers or other key employees for any reason could have a
material adverse effect on our business, operating results, financial condition
and cash flows.
Governmental and environmental regulations could adversely affect our business.
Our business is subject to federal, state and local laws and regulations on
taxation, the exploration for and development, production and marketing of oil
and gas and safety matters. Many laws and regulations require drilling permits
and govern the spacing of wells, rates of production, prevention of waste,
unitization and pooling of properties and other matters. These laws and
regulations have increased the costs of planning, designing, drilling,
installing, operating and abandoning our oil and gas wells and other facilities.
In addition, these laws and regulations, and any others that are passed by the
jurisdictions where we have production, could limit the total number of wells
drilled or the allowable production from successful wells, which could limit our
revenues.
Our operations are also subject to complex environmental laws and
regulations adopted by the various jurisdictions in which we have oil and gas
operations. We could incur liability to governments or third parties for any
unlawful discharge of oil, gas or other pollutants into the air, soil or water,
including responsibility for remedial costs. We could potentially discharge
these materials into the environment in any of the following ways:
o from a well or drilling equipment at a drill site;
o from gathering systems, pipelines, transportation facilities and
storage tanks;
o damage to oil and natural gas wells resulting from accidents
during normal operations; and
o blowouts, cratering and explosions.
Because the requirements imposed by laws and regulations are frequently
changed, we cannot assure you that laws and regulations enacted in the future,
including changes to existing laws and regulations, will not adversely affect
our business. In addition, because we acquire interests in properties that have
been operated in the past by others, we may be liable for environmental damage
caused by the former operators.
Competition.
The oil and gas industry is highly competitive in many respects, including
identification of attractive oil and gas properties for acquisition, drilling
and development, securing financing for such activities and obtaining the
necessary equipment and personnel to conduct such operations and activities. In
seeking suitable opportunities, we compete with a number of other companies,
including large oil and gas companies and other independent operators with
greater financial resources and, in some cases, with more expertise. Many other
oil and gas companies in the industry have financial resources, personnel and
facilities substantially greater than ours and there can be no assurance that we
will be able to compete effectively with these larger entities.
7
Development Risks and Production.
A portion of our oil and gas reserves is or may become, with future
successful drilling of our prospects, proved undeveloped reserves. Successful
development and production of such reserves, although categorized as "proved",
cannot be assured. Additional drilling will be necessary in future years both to
maintain production levels and to define the extent and recoverability of
existing proved undeveloped reserves. There is no assurance that our present oil
and gas wells will continue to produce at current or anticipated rates of
production, that development drilling will be successful, that production of oil
and gas will commence when expected, that there will be favorable markets for
oil and gas which may be produced in the future or that production rates
achieved in early periods can be maintained.
Title to the properties in which we have an interest may be impaired by title
defects.
We generally obtain title opinions on properties which we drill or acquire.
However, there is no assurance that we will not suffer a monetary loss from
title defects or failure. Under the terms of the operating agreements affecting
our properties, any monetary loss arising from title failure or defects is to be
borne by all parties to any such agreement in proportion to their interests in
such property. If there are any title defects or defects in assignment of
leasehold rights in properties in which we hold an interest, we will suffer a
financial loss.
We cannot be certain that the insurance coverage maintained by us will be
adequate to cover all losses which may be sustained in connection with all oil
and gas activities.
We have purchased and are maintaining a general and excess liability policy
with a total limit on claims of $27,000,000 and a workers compensation policy to
provide added insurance if the coverage provided by an operators policy is
inadequate to cover our losses. Our policies, and the policies maintained by our
third party operators, which have limits ranging from $10,000 to $25,000,000
depending on the type of occurrence, generally cover:
o personal injury,
o bodily injury,
o third party property damage,
o medical expenses,
o legal defense costs,
o pollution in some cases,
o well blowouts in some cases and
o workers compensation
A loss in connection with our oil and gas properties could have a
materially adverse effect on our financial position and results of operation to
the extent that the insurance coverage provided under our policies cover only a
portion of any such loss.
Our international operations may be adversely affected by a number of factors.
Although the majority of our exploration efforts are focused in the United
States, we have international operations in Eastern Australia. Our operations in
Eastern Australia represent our only foreign operations. We currently have no
binding agreements or commitments to make any material international investment.
Our foreign operations in Eastern Australia may be adversely affected by a
number of factors, including:
o local political and economic developments could restrict or increase
the cost of our foreign operations;
o exchange controls and currency fluctuations;
o royalty and tax increases and retroactive tax claims could increase
costs of our foreign operations;
o expropriation of our property could result in loss of revenue,
property and equipment;
o import and export regulations and other foreign laws or policies could
result in loss of revenues; and
o laws and policies of the United States affecting foreign trade,
taxation and investment could restrict our ability to fund foreign
operations or could make foreign operations more costly.
8
Our future performance depends upon our ability to find or acquire additional
oil and gas reserves that are economically recoverable.
In general, production from oil and natural gas properties declines as
reserves are depleted, with the rate of decline depending on reservoir
characteristics. Unless we successfully replace the reserves that we produce,
our reserves will decline, resulting eventually in a decrease in oil and gas
production and lower revenues and cash flow from operations. We intend to
increase our reserves after taking production into account through exploitation,
development and exploration on our existing oil and gas properties as well as on
newly acquired properties. We may not be able to replace reserves from such
activities at acceptable costs. Low prices of oil and gas may further limit the
kinds of reserves that can economically be developed. Lower prices also decrease
our cash flow and may cause us to decrease capital expenditures.
We are continually identifying and evaluating opportunities to acquire oil
and gas properties, including acquisitions that would be significantly larger
than those consummated to date by us. We cannot assure you that we will
successfully consummate any acquisition, that we will be able to acquire
producing oil and gas properties that contain economically recoverable reserves
or that any acquisition will be profitably integrated into our operations.
Estimating reserves and future net reserves involves uncertainties and oil and
gas price declines may lead to impairment of oil and gas assets.
There are numerous uncertainties inherent in estimating quantities of
proved reserves and in projecting future rates of production and timing of
development expenditures, including many factors beyond the control of the
producer. The reserve data included in the documents incorporated herein by
reference represent only estimates. In addition, the estimates of future net
revenues from our proved reserves and the present value of such estimates are
based upon certain assumptions about future production levels, prices and costs
that may not prove to be correct over time.
Quantities of proved reserves are estimated on economic conditions in
existence in the period of assessment. Lower oil and gas prices may have the
impact of shortening the economic lives on certain fields because it becomes
uneconomical to produce all recoverable reserves on such fields, thus reducing
proved property reserve estimates. If such revisions in the estimated quantities
of proved reserves occur, they will have the effect of increasing the rates of
depreciation, depletion and amortization expense. The revisions may also be
sufficient to trigger impairment losses on certain properties which would result
in a further non-cash charge to earnings.
If we miscalculated our future cash requirements due to any of the risk factors
detailed here or for any other reason, we would then need to service our
existing bank debt and/or fund our growth strategy though additional financings
and failure to obtain such financings would not only hamper our ability to
expand our oil and gas operations but could result in a contraction of our
business and activities.
Failure to raise such additional funds could materially adversely affect:
o our ability to participate in wells proposed to be drilled and the
potential economic benefit that such wells might generate,
o our plans for aggressive expansion of our exploration activities,
o our ability to take advantage of opportunities to acquire interests in
future projects on favorable terms, and
o our financial condition.
Without the availability of additional funds, we may be required to:
o reduce our operations and business activities,
o forfeit our interest in wells that are proposed to be drilled,
o farm-out our interest in proposed wells,
o sell a portion of our interest in proposed wells and use the proceeds
to fund our participation for a lesser interest, or
o reduce our general and administrative expenses.
9
If additional financing is obtained by us, such financing:
o may not be available on terms that are advantageous to us,
o would dilute the percentage stock ownership of existing stockholders if
additional equity securities are issued to raise the additional
financing, and
o could result in the issuance of additional equity securities which may
have better rights, preferences or privileges than are available with
respect to shares of our common stock held by our existing stockholders
Shareholders may experience dilution resulting from the employment contract of
Steve Antry.
We executed an employment contract with the President and Chairman of the
Board of Directors, Mr. Steve Antry, dated June 23, 1997. The contract may be
terminated by us without cause upon the payment of, among other items, options
containing a five-year term to acquire our common stock in an amount equal to
10% of the then issued and outstanding shares, piggyback registration rights and
an exercise price equal to 60% of the fair market value of the shares during the
sixty-day period of time preceding the termination notice, such amount not to
exceed $3.00 per share.
If we were to terminate Mr. Antry without cause, the common shareholders
would experience immediate and substantial dilution resulting from the issuance
of a large number of options owned by Mr. Antry with an exercise price
substantially lower than the market price.
FORWARD LOOKING STATEMENTS
This prospectus and the documents we incorporate by reference include
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. All statements, other than statements of historical facts, included
or incorporated by reference in this prospectus which address activities, events
or developments which we expect or anticipate will or may occur in the future
are forward-looking statements. The words "believes," "intends," "expects,"
"anticipates," "projects," "estimates," "predicts" and similar expressions are
also intended to identify forward-looking statements. Although we believe that
the expectations reflected in such forward-looking statements are reasonable, we
can give no assurance that such expectations reflected in such forward-looking
statements will prove to have been correct.
All forward-looking statements contained in or incorporated by reference
into this prospectus are based on assumptions believed to be reasonable.
These forward-looking statements include statements regarding:
o plan of operation for 2002
o estimates of proved reserve quantities and net present values of those
reserves,
o reserve potential,
o business strategy,
o capital expenditures - amount and types,
o expansion and growth of our business and operations,
o expansion and development trends of the oil and gas industry,
o production of oil and gas reserves,
o exploration prospects,
o wells to be drilled, and drilling results, and
o operating results and working capital.
We can give no assurance that our expectations and assumptions will prove
to be correct. Reserve estimates of oil and gas properties are generally
different from the quantities of oil and natural gas that are ultimately
recovered or found. This is particularly true for estimates applied to
exploratory prospects and new production. Additionally, any forward-looking
statements are subject to various known and unknown risks, uncertainties and
contingencies, many of which are beyond our control. Such things may cause
actual results, performance, achievements or expectations to differ materially
from what we anticipated.
10
Factors that may affect such forward-looking statements include, but are
not limited to:
o our ability to generate additional capital to complete our planned
drilling and exploration activities,
o risks inherent in oil and gas acquisitions, exploration, drilling,
development and production,
o oil and natural gas prices,
o competition from other oil and gas companies,
o shortages of equipment, services and supplies,
o general economic, market or business conditions,
o economic, market or business conditions in the oil and gas industry and
in the energy business generally,
o government regulation,
o environmental matters,
o financial condition and operating performance of the other companies
participating in the exploration, development and production of oil and
gas ventures in which we are involved; and
o other matters described under "Risk Factors" elsewhere in this
prospectus.
In addition, since many of our prospects are currently operated by third
parties, we may not be in a position to control costs, safety and timeliness of
work as well as other critical factors affecting a producing well or exploration
and development activities.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares of
common stock offered by this prospectus. If any of the outstanding common stock
purchase warrants are exercised for the purpose of selling the shares of common
stock issuable upon such exercises, we would receive up to $7,148,537 in payment
of the exercise price and those funds would be used for general working capital
purposes or to pay down outstanding indebtedness.
11
SELLING STOCKHOLDERS
Background
On June 29, 2001 we completed a private placement of our Series A 8%
Convertible Preferred Stock and common stock purchase warrants, offered as units
of one Preferred Share and one-half of one Warrant at $9.25 per unit. Net
proceeds received from the Offering were approximately $5,056,234, net of
estimated offering expenses of $533,156, including brokers' commissions and
other fees and expenses. We issued 604,271 shares of preferred stock, each of
which is convertible into one share of common stock and 302,140 warrants to
purchase a like number of shares of our common stock at an exercise price of
$9.25 per share. Brokers were issued 59,775 non-callable warrants as part of
their commission, each of which is also exercisable at a price of $9.25 per
share. All of the warrants expire five years from the date of issuance unless we
elect to extend them.
Under the subscription agreement, we agreed to register, within one year of
the completion of the offering, the resale of the shares of our common stock (i)
issuable upon conversion of the outstanding preferred shares, and (ii) issuable
upon exercise of the warrants issued in connection with the private placement.
Additionally, on September 19, 2000, we issued 10,000 shares of our common
stock and 100,000 callable common stock purchase warrants to Duke Field
Services, L.L.C. ("Duke") as partial consideration paid to Duke for the purchase
of a note payable with a principal balance, including interest, of $2,270,000
and Duke's interest in the TCM coal bed properties. In addition to the common
stock and stock warrants, Duke received approximately $560,000 cash. The
callable common stock purchase warrants will expire on September 19, 2004 and
have an exercise price of $10.78 per share. Duke has piggyback registration
rights, which gives Duke the option to register its common stock and any common
stock issued upon exercise of their warrants when Beta registers any shares of
its common stock under the Securities Act of 1933, as amended, on a form which
would permit the inclusion of Duke's common stock. Duke has elected to exercise
its piggyback registration rights. To date, Duke has not exercised any of its
warrants.
We have issued common stock and stock purchase warrants to other qualified
investors in the past in private placements for cash or, in some instances, for
services rendered. Offers and sales of common stock issued to these investors in
the private placement and the shares of common stock which may be issued in the
future in connection with the exercise of these warrants are covered by this
prospectus.
The following table is prepared based on information supplied to us by the
listed selling security holders. The term "selling security holders," as used in
this prospectus, includes the security holders listed below and their
transferees, pledgees, donees or other successors acquiring an interest in the
shares after the date of this prospectus. The table assumes that the selling
security holders will sell all of the shares offered under this prospectus.
However, because the selling security holders may offer from time to time all or
some of their shares under this prospectus, or in another permitted manner, no
assurances can be given as to the actual number of shares that will be sold by
the selling security holders or that will be held by the selling security
holders after completion of the sales. Information concerning the selling
security holders may change from time to time and changed information will be
presented in a supplement to this prospectus if and when necessary and required.
The following table sets forth:
o the name of the selling security holders;
o the number and percent of outstanding shares of our common stock that
the selling security holders beneficially owned prior to the offering
for resale of any of the shares of our common stock covered by this
prospectus;
o the number of shares of our common stock that may be offered for resale
for the account of the selling security holders under this prospectus;
and
o the number and percent of shares of our common stock to be held by the
selling security holders after the offering of the resale shares
(assuming all of the resale shares are sold by the selling security
holders).
The number of shares in the column "Number of Shares Being Offered"
represents all of the shares that each security holder may offer under this
prospectus. We do not know how long the security holders will hold the shares
before selling them and we currently have no agreements, arrangements or
understandings with any of the security holders regarding the sale of any of the
shares. The shares offered by this prospectus may be offered from time to time
by the security holders listed below.
12
Except as described below, none of the persons or entities named below has
had a material relationship with us or any of our subsidiaries within the past
three years. Similarly, unless otherwise noted, the persons and entities named
below have sole voting and investment power with respect to the shares listed as
beneficially owned by that person or entity. The number of shares of common
stock outstanding used in the calculation of the percentage for each person
listed includes the number of shares of common stock underlying the preferred
stock, options and warrants held by that person that are exercisable within 60
days of May 31, 2002. The applicable percentages of ownership are based on an
aggregate of 12,392,557 shares of our common stock issued and outstanding on May
31, 2002. The number of shares beneficially owned by the selling security
holders is determined under rules promulgated by the SEC, and is not necessarily
indicative of beneficial ownership for any other purpose; provided, however,
that for the purpose of computing beneficial ownership of the selling security
holders listed below, each such selling security holder is deemed to
beneficially own the shares of common stock issuable upon conversion of the
preferred stock and the exercise of the options and warrants issued to him or
her , but excludes shares of common stock underlying preferred stock, options
and warrants held by any other person.
Shares of Common Shares of Common
Stock Beneficially Stock Beneficially
Owned Prior to Offering Owned After Offering(1)
--------------------------------- ----------------------
Shares
Issuable
Upon the
Exercise of Number of
Stock Shares
Number Warrants/ Being Number
Security Holders of Shares Options Percent Offered of Shares Percent
---------------------------- --------- ----------- -------- --------- --------- -------
Steve Antry and 1,501,000 106,000 12.86% 1,500,000 107,000 *
Lisa Antry, Jointly (2)
Robert E. Davis, Jr. 250,000 -- 2.02% 250,000 -- --
R. Thomas Fetters (3) 300,500 45,000 2.78% 300,500 45,000 *
Stephen L. Fischer (4) 358,000 70,000 3.43% 375,000 53,000 *
Rolf N. Hufnagel (5) 891,00 -- 7.19% 891,000 -- --
Joe C. Richardson, Jr. 420,000 -- 3.39% 400,000 -- --
Duke Energy Financial
Services, LLC 10,000 100,000 * 110,000 -- --
Broker Warrants -- 59,775 * 59,775 -- --
A.C. WilDen Holdings, L.L.C.
James M. Tallent, Manager 16,216 8,108 * 24,324 -- --
Marilyn J. Allgood Living Trust
Marilyn J. & Gerald R.
Allgood TTEES 1,000 500 * 1,500 -- --
J. Scott & Donna L. Allison 4,986 2,494 * 7,480 -- --
John K. Alstrom 2,500 1,250 * 3,750 -- --
Anderson Family Trust 5,000 2,500 * 7,500 -- --
Leonard J. Aten 1,100 550 * 1,650 -- --
Barinder Athwal 2,000 1,000 * 3,000 -- --
UBS PaineWebber as IRA
Customer FBO Harold Dean
Bauman 5,000 2,500 * 7,500 -- --
Resources Trust Company Trust
U/A FBO Delfin J. Beltran
Acct. 5,400 2,700 * 8,100 -- --
Brenda Berg 2,162 1,082 * 3,244 -- --
Sidney E. Bickel Trust
Sidney E. Bickel, TTEE 1,000 500 * 1,500 -- --
Blaine Investments
Rodger Jensen, Partner 5,000 2,500 * 7,500 -- --
13
Michael L. Blair and Kerri K.
Blair, JT 11,500 5,750 * 17,250 -- --
Blick's Inc. 10,000 5,000 * 15,000 -- --
BLN, L.P., a Calif. Limited
Partnership 2,500 1,250 * 3,750 -- --
W. F. Bonner Testamentary Trust,
Donald R. Lawrenz, Trustee 1,027 514 * 1,541 -- --
David G. Brown 1,000 500 * 1,500 -- --
Suzanne Lindley Brown 1,500 750 * 2,250 -- --
The Burley Living Trust
Wilma E. Burley, TTEE 5,000 2,500 * 7,500 -- --
John W. Calvert 2,200 1,100 * 3,300 -- --
Fred H. Carlisle Jr. Living Trust,
Fred H. Carlisle, Trustee 2,500 1,250 * 3,750 -- --
Erick G. Carlson 2,800 1,400 * 4,200 -- --
Carson Family Trust
Alice Beryle Carson & Judy
Kauffman, Co-TTEE's 5,000 2,500 * 7,500 -- --
Centurion Counsel Market
NeutralFund Firstar Bank 5,000 2,500 * 7,500 -- --
Leroy L. Clerico 2,946 1,474 * 4,420 -- --
The Joseph & Betty Lou Connolly
Family Trust
Joseph Connolly, TTEE 4,986 2,494 * 7,480 -- --
W. Frank Cornell, IV 2,500 1,250 * 3,750 -- --
William P. Cote 3,500 1,750 * 5,250 -- --
Haig Davidian 1999 Revokable
Trust 10,000 5,000 * 15,000 -- --
Janice A. Davidson Rev. Trust
Janice A. Davidson, TTEE 2,000 1,000 * 3,000 -- --
Donald & Clarice M. Davied 1,000 500 * 1,500 -- --
Del Campbell Cattle Co. 5,000 2,500 * 7,500 -- --
Joseph F. Desmond, TTEE of the
Desmond Survivors Trust 20,000 10,000 * 30,000 -- --
Robert E. Duncan Trust
Robert E. Duncan, TTEE 2,500 1,250 * 3,750 -- --
Anthony F. Ecock 2,500 1,250 * 3,750 -- --
Eurohealth Ventures, Inc. 5,400 2,700 * 8,100 -- --
James R. & Dwanna N. Famalette 2,500 1,250 * 3,750 -- --
Joe B. Fields Family Partners, LP 5,000 2,500 * 7,500 -- --
Fields Grandchildren's Trust
Kathryn R. Fields TTEE 5,000 2,500 * 7,500 -- --
Joe W. Frazer, M.D. and Jill B.
Frazer 2,500 1,250 * 3,750 -- --
The Freeland Family Trust,
David E. & Lesley P.
Freeland, TTEES 5,000 2,500 * 7,500 -- --
14
Edward D. & Jacqueline M.
Givins Family Trust, Edward
D. & Jacqueline M. Givins,
TTEES 2,800 1,400 * 4,200 -- --
Dale & Rhenda Glasco Living
Trust 15,008 7,504 * 22,512 -- --
Dika Golovatchoff Living Trust 1,100 550 * 1,650 -- --
Paul L. Gould 10,000 5,000 * 15,000 -- --
Graham, Jones & Sowins Profit
Sharing Trust 2,800 1,400 * 4,200 -- --
Robert E. & Jeanette Grider 2,500 1,250 * 3,750 -- --
Dan L. Haffner 3,000 1,500 * 4,500 -- --
Pat J. Haffner 3,000 1,500 * 4,500 -- --
David E. Hall 10,000 5,000 * 15,000 -- --
James Heitkotter 2,541 1,270 * 3,811 -- --
Harry N. Herbert Trust 1,100 550 * 1,650 -- --
Quentin L. and M. Elaine Hirt 2,500 1,250 * 3,750 -- --
Vernon J. Hirt Trust, Vernon J.&
Donna M. Hirt, TTEES 2,500 1,250 * 3,750 -- --
Darol M. & Lucy B. Hoffman 10,000 5,000 * 15,000 -- --
Gwen Janes 1,000 500 * 1,500 -- --
JMI Limited, L.P. 2,800 1,400 * 4,200 -- --
Richard D. Jorgensen 1,080 540 * 1,620 -- --
Richard L. Kagy 2,000 1,000 * 3,000 -- --
The Kahili Family Limited *
Partnership 1,400 700 2,100 -- --
Kashian Group, Ltd. 5,000 2,500 * 7,500 -- --
Katzman Family Trust
Abraham & Sylvia Katzman,
TTEES 1,000 500 * 1,500 -- --
H. Arnold Kela Farms Employee
Retirement Trust 2,500 1,250 * 3,750 -- --
Kenco Investments Inc. PSP
Ken Boyd TTEE 2,500 1,250 * 3,750 -- --
Mary K. Klenda Living Trust,
Mary K. Klenda, TTEE 1,000 500 * 1,500 -- --
Landon Investment Company, Inc 10,000 5,000 * 15,000 -- --
James W. Lindley 1,500 750 * 2,250 -- --
Laurie A. Lindley 1,500 750 * 2,250 -- --
Les & Marguerite Lindley Living
Trust, Les & Marguerite
Lindley, TTEES 1,500 750 * 2,250 -- --
Greg & Phyllis Long 5,000 2,500 * 7,500 -- --
Valera W. Lyles 2,500 1,250 * 3,750 -- --
James D. Marshall 2,000 1,000 * 3,000 -- --
David V. Martin Rev. Tr., David
V. & Nancy Martin, TTEES 3,000 1,500 * 4,500 -- --
The McGuinness Ltd. Partnership 6,000 3,000 * 9,000 -- --
15
Russell W. Meyer III 1,000 500 * 1,500 -- --
Miller Family Trust, Kenneth G.
& Helen P. Miller, TTEES 2,800 1,400 * 4,200 -- --
Earl C. Monroe 3,000 1,500 * 4,500 -- --
Ariel Mullins 2,800 1,400 * 4,200 -- --
Douglas & Cynthia Myovich, 7,500 3,750 * 11,250 -- --
Deni J. & Marjorie J. Pacini 2,500 1,250 * 3,750 -- --
Page Trust 20,000 10,000 * 30,000 -- --
Sam A. and Carolyn S. Parks 2,000 1,000 * 3,000 -- --
Charles & Ruth Pavlik Trust
Charles J. & Ruth E. Pavlik,
CoTTEEs 2,500 1,250 * 3,750 -- --
Kim D. Pavlik Roth IRA 5,000 2,500 * 7,500 -- --
Victoria A. Pavlik 2,500 1,250 * 3,750 -- --
Victoria A. Pavlik IRA Rollover 5,000 2,500 * 7,500 -- --
W. Bradley & Carolyn L. Post 1,000 500 * 1,500 -- --
Terry J. Powell 2,500 1,250 * 3,750 -- --
Walter R. Reinhardt 11,000 5,500 * 16,500 -- --
Dean Ritchie 5,000 2,500 * 7,500 -- --
Ed Ritchie 4,000 2,000 * 6,000 -- --
J. Proctor Ritchie 5,000 2,500 * 7,500 -- --
The Rochelle Family Trust 2,800 1,400 * 4,200 -- --
Dr. Joseph Rubinfeld 5,000 2,500 * 7,500 -- --
James J. Ryskamp, Jr. MD 401(k)
Profit Sharing Trust FBO James
J. Ryskamp, Jr. M.D. 5,500 2,750 * 8,250 -- --
Victor & Arlyne J. Sahatdjian
Family Revocable Trust,
Victor & Arlyne J. Sahatdjian
Co-TTEES 5,000 2,500 * 7,500 -- --
Resources Trust Company Trust
U/A FBO Jay B. Samra Acct. 1,000 500 * 1,500 -- --
Jason Sanders 2,500 1,250 * 3,750 -- --
Stacy Sanders 2,500 1,250 * 3,750 -- --
Stanley J. Sanders Living Trust 2,500 1,250 * 3,750 -- --
Albert Savolt 20,000 10,000 * 30,000 -- --
Nancy L. Scheidt 11,000 5,500 * 16,500 -- --
UBS Paine Webber as IRA Cust.
FBO Stuart H.Schmaltz 5,000 2,500 * 7,500 -- --
James L. Schooley, MD, Inc.,
MPS FBO James L. Schooley, J
James L. Schooley, MD, TTEE 4,973 2,486 * 7,459 -- --
Sciaroni Family Trust
Lloyd G. Sciaroni, TTEE 2,500 1,250 * 3,750 -- --
Daniel F. Selleck 5,000 2,500 * 7,500 -- --
Eugene Shapland Trust,
Eugene & Saundra Sue
Shapland, TTEES 1,000 500 * 1,500 -- --
Keith E. Shapland 500 250 * 750 -- --
Alan Shows and Kathy Shows 6,000 3,000 * 9,000 -- --
16
John E. & Jean L. Sikes
Revokable Living Trust 10,000 5,000 * 15,000 -- --
UBS PaineWebber as IRA Cust.
for Robert C. Skidmore 2,500 1,250 * 3,750 -- --
Slater & Company 401(k) Pension
& Profit Sharing Plan, John
Slater, TTEE 2,700 1,350 * 4,050 -- --
Glenn D. & William T.
Smitherman 1,000 500 * 1,500 -- --
David Sproul 3,200 1,600 * 4,800 -- --
Bear Stearns Sec. Corp. FBO
Joseph J. St. Marie IRA 1,000 500 * 1,500 -- --
Superior Rubber Stamp & Seal,
Inc. Profit Sharing Trust,
Kenneth Lowrance, TTEE 3,000 1,500 * 4,500 -- --
M. William and Barbara Syrios 1,000 500 * 1,500 -- --
Norman C. and Barbara L. Tanner 2,700 1,350 * 4,050 -- --
Temple Family Trust, J. Martin &
Bobbye S. Temple, TTEES 5,000 2,500 * 7,500 -- --
Miles H. Thomas Family Trust
Miles H. & Joan Thomas, TTEES 7,946 3,974 * 11,920 -- --
UBS PaineWebber as IRA
Cust. for Gary R. Tingstad 2,500 1,250 * 3,750 -- --
Gary R. Tingstad Living Trust
Gary R. Tingstad TTEE 2,500 1,250 * 3,750 -- --
Robert J. Tippin 1,000 500 * 1,500 -- --
Tolfree Family Trust
Charles H. Tolfree, TTEES 2,500 1,250 * 3,750 -- --
Total Benefit Services, Inc. 401K
Plan FBO Richard Aune 3,000 1,500 * 4,500 -- --
James W. Totman Trust
James W. Totman TTEE 5,000 2,500 * 7,500 -- --
TRC Properties, Inc. 11,000 5,500 * 16,500 -- --
Arthur Trevorrow IRA Rollover 3,000 1,500 * 4,500 -- --
Arthur & Kay Treverrow Family
Trust, Arthur & Kay Trevorrow
TTEES 3,000 1,500 * 4,500 -- --
Truck Dispatch Service, Inc. 5,000 2,500 * 7,500 -- --
The Twomey Family Trust
William Lee & Jodi Lynne
Twomey, TTEES 2,500 1,250 * 3,750 -- --
Tim M. Tyler 2,500 1,250 * 3,750 -- --
Judith L. Vanderhoof 7,500 3,750 * 11,250 -- --
James H. & Susan E. VinZant 2,500 1,250 * 3,750 -- --
Michael Wallace & Miriam Kim 5,000 2,500 * 7,500 -- --
Richard N. Walton IRA 2,000 1,000 * 3,000 -- --
17
Cal Watters 1,000 500 * 1,500 -- --
Sylvia Weinrieb Trust
Sylvia Weinrieb TTEE 2,000 1,000 * 3,000 -- --
Arthur L. & Oma Jean Westeman 5,000 2,500 * 7,500 -- --
Keith & Harrie Whipple Living
Trust, Keith Whipple, Harrie
Whipple, Jennifer Whipple,
TTEE's 5,000 2,500 * 7,500 -- --
UBS PaineWebber as IRA Cust.
for Paul Winklesky 5,000 2,500 * 7.500 -- --
James J.Witwer Employee Benefit
Trust 2,000 1,000 * 3,000 -- --
John L. Woolf, II 10,000 5,000 * 15,000 -- --
Massoud Assemi IRA -- 500 * 500 -- --
Said Assemi IRA -- 500 * 500 -- --
Bill Bennett and Joyce Bennett, as
Community Property -- 500 * 500 -- --
Berberian & Gasarian Family
Foundation -- 2,500 * 2,500 -- --
William P. Berliner and Marie E.
Berliner, JTWROS -- 1,000 * 1,000 -- --
Resources Trust Company, Cust.
FBO William P. Berliner IRA -- 1,000 * 1,000 -- --
Lawrence J. Bertaina, TTEE
Lawrence J. Bertaina Rev.
Living Trust U/A DTD 9/18/89 -- 500 * 500 -- --
Black Diamond Blade, Inc. Profit
Sharing Plan & Trust, Franklin
Brenner, Trustee -- 750 * 750 -- --
Susan A. Blair -- 1,500 * 1,500 -- --
Lamarcus L. Blount and Michelle
T. Blount, JTWROS -- 500 * 500 -- --
Robert M. Bragg TTEE FBO the
Robert M. Bragg Separate
Property Trust UTD 5/30/72 -- 500 * 500 -- --
Frank Brenner -- 750 * 750 -- --
Hoby Brenner & Alexis Brenner -- 1,250 * 1,250 -- --
Fred H. Carlisle, Trustee for the
Fred H. & Sue Z. Carlisle
Revocable Trust -- 500 * 500 -- --
Robert T. Cherry and Tay N.
Cherry, TTEES of the Cherry
Family Trust -- 500 * 500 -- --
Mehran Chooljian and Madeline
Chooljian TTEES of the Mehran
and Madeline Chooljian Family
Trust DTD 8-20-91 -- 3,500 * 3,500 -- --
18
Susan M. Coffman and Leroy B.
Coffman II, Community
Property -- 2,000 * 2,000 -- --
Construction Developers, Inc. -- 4,000 * 4,000 -- --
Lee R. Copeland -- 500 * 500 -- --
Allan A. Corrin -- 2,000 * 2,000 -- --
Charles Elliott Curtis & Charlene
Ann Curtis, TTEES FBO
Charles & Charlene Curtis
Family Trust UTD 4/15/94 -- 5,000 * 5,000 -- --
Mahendra Defonseka, M.D. -- 375 * 375 -- --
Joseph F. Desmond, TTEE of the
Desmond Survivors Trust -- 1,500 * 1,500 -- --
Judith Dickison-Ryskamp -- 500 * 500 -- --
Donaldson, Lufkin Jenrette
Securities Corp. CUST FBO
Stephen A. Fields IRA -- 750 * 750 -- --
Larry R. Duncan -- 250 * 250 -- --
Robert E. Duncan and Linda L.
Duncan, community property -- 10,000 * 10,000 -- --
Abed Elhaj -- 500 * 500 -- --
John Steven Ellis, Sr. and
Rebecca C. Ellis, JTWROS -- 500 * 500 -- --
James R. Famalette and Dwanna
N. Famalette, Community
Property -- 1,000 * 1,000 -- --
Kathryn R. Fields TTEE, Fields
Grandchildren's Trust -- 1,000 * 1,000 -- --
Joe W. Frazer, M.D. and Jill B.
Frazer, JTWROS -- 1,000 * 1,000 -- --
C. Walter Frick, TTEE of the
Frick Family Trust UTD -- 500 * 500 -- --
Charles Gessert -- 1,000 * 1,000 -- --
Dale Glasco TTEE, Glasco
Family Trust -- 2,000 * 2,000 -- --
Rodger C. Glaspey TTEE,
Glaspey Family Trust -- 5,000 * 5,000 -- --
Paul L. Gould -- 750 * 750 -- --
Robert E. Grider and Jeanette
Grider, as community property -- 250 * 250 -- --
Donald H. Hangen and Patricia C.
Hangen, TTEES Hangen Family
Trust UTD 3/6/96 -- 500 * 500 -- --
John Hartman -- 500 * 500 -- --
B. M. Den Hartog TTEE of the
Den Hartog 1989 Family Trust -- 375 * 375 -- --
James Heitkotter and June G.
Hartley, JTWROS -- 500 * 500 -- --
19
Frank Hendricks IRA -- 500 * 500 -- --
Richard W. Hibner and Eileen W.
Hibner, as community property -- 1,461 * 1,461 -- --
T. William Hill and Barbara C.
Hill, JTWROS -- 1,000 * 1,000 -- --
Darol Hoffman TTEE for Richard
D. Gordon, Inc. Profit Sharing
Plan -- 5,000 * 5,000 -- --
Robert E. Homen and Lucy M.
Homen, Community Property -- 500 * 500 -- --
J.P. Horn and Jill B. Horn,
Community Property -- 500 * 500 -- --
Joseph Bernard Hughes -- 250 * 250 -- --
Luther C. Hunnicutt & Carroll N.
Hunnicutt, as Community
Property -- 500 * 500 -- --
Gloria Jean Iorio IRA -- 1,000 * 1,000 -- --
David A. Jacobs -- 500 * 500 -- --
John R. Jeffries and Pamela A.
Jeffries, Community Property -- 250 * 250 -- --
J. Ronald Johnson and Christine
E. Johnson, tenants in common -- 250 * 250 -- --
Roy Jura and Betty Jane Jura as
Community Property -- 588 * 588 -- --
K&B Development, Inc. Profit
Sharing Trust FBO R. Kent
Kunz -- 2,250 * 2,250 -- --
H. Arnold Kela and Colleen F.
Kela, as Community Property -- 1,000 * 1,000 -- --
H. Arnold Kela Farms Employee
Retirement Plan & Trust -- 2,000 * 2,000 -- --
Lisa Kelton TTEE FBO Michael
K. Kelton and Lisa Kelton
Living Trust -- 500 * 500 -- --
Ken Boyd TTEE FBO of the
Kenco Investment Inc. Profit
Sharing Plan -- 500 * 500 -- --
Gary R. Keszler and Marlene
Keszler, JTWROS -- 1,000 * 1,000 -- --
Harry A. Khasigian and Lynda H.
Khasigian, Trustees of the
Khasigian Revocable Living
Trust, dated 7/24/91 -- 2,000 * 2,000 -- --
Byron Kilpatrick and Myriam
Kilpatrick, JTWROS -- 2,000 * 2,000 -- --
Kimura Markets, a corporation -- 750 * 750 -- --
Craig S. Kinard -- 1,500 * 1,500 -- --
20
Gerald W. King and Edith C.
King, TTEES, The King Family
Living Trust -- 1,000 * 1,000 -- --
Thomas A. King DDS, Inc. -- 2,000 * 2,000 -- --
Tom Kourafas -- 375 * 375 -- --
Donald C. Laines and Ellen J.
Laines -- 500 * 500 -- --
Steve Langhofer -- 5,000 * 5,000 -- --
Frank J. Lanotte SEP/IRA FBO
Frank J. Lanotte -- 700 * 700 -- --
D. Kevin Lester -- 5,000 * 5,000 -- --
Bret Levy and Audrey Mathews,
community property -- 1,000 * 1,000 -- --
H. Wayne Lewis and Janet A.
Lewis, Trustees of The Lewis
Family Living Trust -- 5,000 * 5,000 -- --
Betty Lo IRA R/O Bear Stearns
Sec. Corp Cust. -- 500 * 500 -- --
Coleman B. Looney -- 500 * 500 -- --
Jack Loperena and Joanne
Loperena -- 1,250 * 1,250 -- --
Larry J. Loperena -- 500 * 500 -- --
Laurie M. Loperena -- 500 * 500 -- --
Linda A. Loperena -- 500 * 500 -- --
Lindsey J. Loperena -- 500 * 500 -- --
John J. Lusson -- 1,000 * 1,000 -- --
Valera W. Lyles IRA -- 1,000 * 1,000 -- --
Marc Thomas McMahan -- 1,000 * 1,000 -- --
James E. Malanca SEP IRA -- 1,100 * 1,100 -- --
Eunice E. Marks -- 250 * 250 -- --
Daniel R. Martin -- 250 * 250 -- --
Susan B. Martin -- 500 * 500 -- --
J. William McGuinness, TTEE
McGuinness Family Trust -- 500 * 500 -- --
Dennis C. Meyer -- 250 * 250 -- --
Monterey Peninsula Radiological
Medical Group Inc. Pension
Plan for David R. Holley, M.D.,
Courtney J. Hanson, TTEE -- 2,000 * 2,000 -- --
Edwin Rene Murray and Patricia
Ruth Murray, JTWROS -- 500 * 500 -- --
Douglas L. Myovich and Cynthia
L. Myovich, JTWROS -- 2,000 * 2,000 -- --
Ronan O'Caoimh -- 250 * 250 -- --
Deni J. Pacini and Marjorie J.
Pacini, community property -- 575 * 575 -- --
Gordon W. Peterson and Myra L.
Peterson, JTWROS -- 250 * 250 -- --
21
Dick R. Polder -- 500 * 500 -- --
William J. Podolsky and Karen I.
Podolsky, Community Property -- 250 * 250 -- --
Robert F. Price and Kathryn S.
Price, TTEES Price Family
Trust dtd 6-9-94 -- 500 * 500 -- --
Glen L. Prickett & Shirley E.
Prickett TTEES of the Glen L.
Prickett & Shirley E. Prickett
Living Trust DTD 7/28/93 -- 500 * 500 -- --
M. Carl Rana and Carla S. Rana,
JTWROS -- 250 * 250 -- --
Richard N. Rathbone FBO
Richard N. Rathbone IRA -- 250 * 250 -- --
Richard N. Rathbone and Susan F.
Rathbone, JTWROS -- 500 * 500 -- --
Susan F. Rathbone FBO Susan F.
Rathbone IRA -- 250 * 250 -- --
Robert Redman, TTEE FBO
Village Capital Corp. MPP -- 1,000 * 1,000 -- --
Walter R. Reinhardt -- 2,550 * 2,550 -- --
Ryskamp Takayama 401K Profit
Sharing Plan Trust FBO James
J. Ryskamp, Jr., M.D. -- 4,500 * 4,500 -- --
San Jose Cardiac Surgery Med.
Grp. Money Purchase Pen. Plan
FBO Robert Wuerflein, M.D. -- 4,519 * 4,519 -- --
Rita L. Sharp -- 250 * 250 -- --
Howard W. and Marguerite J.
Schoenduve, JTWROS -- 250 * 250 -- --
James L. Schooley, M.D., Inc.,
Money Purchase Pension Plan -- 1,000 * 1,000 -- --
Lloyd G. Sciaroni, TTEE Sciaroni
Family Trust dtd 5-22-90 -- 200 * 200 -- --
Alan Shows and Kathy Shows,
Community Property -- 2,000 * 2,000 -- --
Leroy W. Smith TTEE Doctors
Financial Management Co., Inc.
Employee Benefit Trust -- 1,000 * 1,000 -- --
William N. Snell, as his separate
property -- 600 * 600 -- --
Dan Spencer and Pat Carriveau,
TTEES of the Carriveau
Spencer Inc. 401K Profit
Sharing Plan -- 500 * 500 -- --
Myron Stevens -- 2,000 * 2,000 -- --
Sabin Stevens -- 2,000 * 2,000 -- --
Norman C. Tanner and Barbara L.
Tanner, JTWROS -- 2,625 * 2,625 -- --
J. Martin Temple -- 1,000 * 1,000 -- --
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Miles H. Thomas & Joan Thomas
TTEES, Miles H. Thomas
Family Trust -- 1,250 * 1,250 -- --
Richard W. Thomas, TTEE, The
Rancho Security Trust -- 3,500 * 3,500 -- --
Charles H. Tolfree and Beth M.
Tolfree, Trustees of the
Tolfree Family Trust dtd 8/14/96 -- 250 * 250 -- --
Plan FBO Richard Aune -- 500 * 500 -- --
Truck Dispatch Service, Inc. -- 500 * 500 -- --
Two Gables PTY, Limited -- 25,000 * 25,000 -- --
Ted Vavoulis -- 2,500 * 2,500 -- --
Vista Mesa, LLC -- 1,000 * 1,000 -- --
Gordon M. Webster, Jr. -- 500 * 500 -- --
John F. Williamson -- 250 * 250 -- --
Patricia A. Williamson IRA -- 250 * 250 -- --
James T. Winton & Jonolyn C.
Winton, as Community Property -- 1,000 * 1,000 -- --
James J. Witwer, M.D., Inc.
TTEE FBO James J. Witwer,
M.D., Witwer Employees
Benefit Trust -- 2,000 * 2,000 -- --
John Alan Wood and Arlene
Areknas Wood, JTWROS -- 250 * 250 -- --
John L. Woolf, II -- 1,250 * 1,250 -- --
Harold and Betty Zinken Family
Living Trust -- 500 * 500 -- --
* less than 1%
(1) This assumes that all of the shares eligible for sale under this prospectus
are sold. None of the selling stockholders are required to sell all or any
of their shares.
(2) Mr. Steve Antry and Mrs. Lisa Antry, husband and wife, own 1,501,000 shares
as community property. This also includes 25,000 shares of common stock
underlying stock warrants which are exercisable at $5.00 per share and
expire on March 12, 2003, 40,000 shares of common stock underlying stock
options which are exercisable at $6.00 per share and expire on December 31,
2004, 25,000 shares of common stock underlying stock options which are
exercisable at $7.70 per share and expire on December 8, 2005 and 16,000
shares of common stock underlying stock options that are exercisable at
$4.00 per share and expire on December 24, 2006. Mr. Antry has been our
President and Chairman of the Board of Directors since June 1997. Ms. Antry
was our Treasurer from June 1997 until June 2002 and previously also served
as Secretary.
(3) This includes 25,000 shares of common stock underlying stock options
that are exercisable at $6.00 per share and expire on December 31, 2009, 15,000
shares of common stock underlying stock options that are exercisable at $7.70
per share and expire on December 8, 2010 and 5,000 shares of common stock
underlying stock options that are exercisable at $4.00 per share and expire on
December 24, 2006. Mr. Fetters has been our Managing Director of Exploration and
a Director since June 1997.
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(4) This includes 25,000 shares of common stock underlying presently exercisable
stock warrants. The warrants are exercisable at $5.00 per share and expire on
March 12, 2003. In addition, this includes 15,000 shares of common stock
underlying stock options that are exercisable at $6.00 per share and expire on
December 31, 2004, 15,000 shares of common stock underlying stock options that
are exercisable at $7.70 per share and expire on December 8, 2005 and 15,000
shares of common stock underlying stock options that are exercisable at $4.00
per share and expire on December 24, 2006. Mr. Fischer has been our Vice
President of Capital Markets since June 1997)
(5) Mr. Hufnagel joined Beta as a director on June 6, 2000 and resigned his
directorship on October 16, 2000. He is the former Red River President and
received his shares in connection with the Merger that was consummated on August
30, 2000.
PLAN OF DISTRIBUTION
We are registering the offer and sale of the shares covered by this
prospectus on behalf of the selling stockholders. As used in this prospectus,
the term "selling stockholders" includes donees, pledgees, transferees or other
successors-in-interest selling shares received from a selling stockholder after
the date of this prospectus. The selling stockholders will act independently of
us in making decisions with respect to the timing, manner and size of each sale.
The selling stockholders may sell their shares from time to time in one or
more types of transactions (which may include block transactions) on The Nasdaq
Stock Market, in the over-the-counter market, in negotiated transactions,
through put or call options transactions relating to the shares, through short
sales of shares, or a combination of these methods of sale, at market prices
prevailing at the time of sale, at negotiated prices, or at varying prices
determined at the time of sale. These transactions may or may not involve
brokers or dealers. The selling stockholders have advised us that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their shares, nor is there
an underwriter or coordinating broker acting in connection with the proposed
sale of shares by the selling stockholders.
The selling stockholders may sell their shares directly to purchasers or to
or through broker-dealers, which may act as agents or principals. These
broker-dealers may receive compensation in the form of discounts, concessions,
or commissions from the selling stockholders and/or the purchasers of shares for
whom these broker-dealers may act as agents or to whom they sell as principal,
or both (which compensation as to a particular broker-dealer might be in excess
of customary commissions).
The selling stockholders also may resell any of their shares that qualify
for sale under Rule 144 in open market transactions pursuant to Rule 144 under
the Securities Act of 1933, rather than pursuant to this prospectus.
The selling stockholders and any broker-dealers that act in connection with
the sale of their shares might be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act of 1933, and any commissions received by
these broker-dealers and any profit on the resale of the shares sold by them
while acting as principals might be deemed to be underwriting discounts or
commissions under the Securities Act of 1933. We have agreed to indemnify the
selling stockholders against certain liabilities, including liabilities arising
under the Securities Act of 1933. The selling stockholders may agree to
indemnify any agent, dealer or broker-dealer that participates in transactions
involving sales of their shares against certain liabilities, including
liabilities arising under the Securities Act of 1933.
Because the selling stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act of 1933, the selling
stockholders will be subject to the prospectus delivery requirements of the
Securities Act of 1933. We have informed the selling stockholders that the
anti-manipulative provisions of Regulation M promulgated under the Securities
Exchange Act of 1934 may apply to their sales in the market.
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Upon notification to us by a selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act of 1933, disclosing:
o the name of the selling stockholder and of the participating
broker-dealer(s);
o the number of shares involved;
o the price at which the shares were sold;
o the commissions paid or discounts or concessions allowed to
the broker-dealer(s), where applicable;
o that the broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in
this prospectus; and
o any other facts material to the transaction.
We will pay all the costs, expenses and fees related to the registration of
the shares offered by this prospectus. The selling stockholders will be
responsible for the payment of any brokerage commissions, underwriting fees or
discounts or fees or expenses of counsel or advisors attributable to the sale of
the shares.
LEGAL OPINION
The validity of the shares of our common stock being offered hereby is
being passed upon for us by Conner & Winters, P.C.
EXPERTS
Our audited financial statements incorporated by reference in this
prospectus have been audited by Hein + Associates LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
accounting and auditing.
Our estimated reserve evaluations and related calculations of Ryder Scott
Company, L.P. are incorporated by reference herein in reliance upon the
authority of said firm as experts in petroleum engineering.
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