Pursuant to Rule 424(b)(5)
Registration No. 333-57456
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED APRIL 9, 2001)
3,000,000 SHARES
[REMINGTON O&G LOGO]
COMMON STOCK
---------------------
We are offering 3,000,000 shares of our common stock in this offering. Our
common stock is listed on the Nasdaq National Market under the trading symbol
"ROIL" and on the Pacific Exchange under the trading symbol "REM.P." The last
reported sale price of our common stock on the Nasdaq National Market on March
21, 2002 was $19.80 per share.
---------------------
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. PLEASE READ THE "RISK
FACTORS" SECTION BEGINNING ON PAGE 5 OF THE ACCOMPANYING PROSPECTUS.
---------------------
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) REMINGTON
----------- -------------- -----------
Per Share........................................ $18.50 $0.83 $17.67
Total............................................ $55,500,000 $2,496,000 $53,004,000
---------------
(1) See "Underwriting" for a discussion of our reimbursement of Jefferies &
Company, Inc. for its reasonable costs and expenses incurred in connection
with this offering.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
We expect to deliver the common stock to purchasers on or about March 27,
2002.
---------------------
JEFFERIES & COMPANY, INC.
This prospectus supplement is dated March 22, 2002.
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
About this Prospectus Supplement............................ S-2
Cautionary Note Regarding Forward-Looking Statements........ S-3
Documents Incorporated by Reference......................... S-3
The Company................................................. S-4
The Offering................................................ S-5
Capitalization.............................................. S-6
Use of Proceeds............................................. S-7
Underwriting................................................ S-8
Legal Matters............................................... S-9
Experts..................................................... S-9
Reserve Engineers........................................... S-9
PROSPECTUS
About this Prospectus....................................... 1
Where You Can Find More Information About Remington......... 1
Cautionary Statements Regarding Forward-Looking
Statements................................................ 2
Our Company................................................. 3
Risk Factors................................................ 5
Use of Proceeds............................................. 10
Description of Capital Stock................................ 10
Selling Security Holders.................................... 13
Holders of 8 1/4% Convertible Subordinated Notes Due 2002... 14
Holder of Warrants.......................................... 14
Plan of Distribution........................................ 14
Legal Matters............................................... 15
Experts..................................................... 16
Reserve Engineers........................................... 16
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement is part of a registration statement that we have
filed with the Securities and Exchange Commission utilizing a "shelf"
registration process. Under this shelf process, we are offering to sell our
common stock using this prospectus supplement and the accompanying prospectus.
The prospectus supplement describes the specific terms of the common stock
offering. The accompanying base prospectus gives more general information, some
of which may not apply to this offering. You should read both this prospectus
supplement and the accompanying prospectus. If the description of the offering
varies between the prospectus supplement and the accompanying prospectus, you
should rely on the information in the prospectus supplement.
You should rely only on the information contained in or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not authorized anyone to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information contained in this
prospectus supplement or the accompanying prospectus or the documents
incorporated by reference is accurate as of any date other than the date on the
front of the respective documents. Our business, financial condition, results of
operations and prospects may have changed since that date.
In this prospectus supplement, unless the context indicates otherwise, when
we refer to "Remington," "we," "us," "our" and "ours," we are describing
Remington Oil and Gas Corporation and its subsidiaries.
S-2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the documents
incorporated by reference in this prospectus supplement and the accompanying
prospectus contain "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. The forward-looking statements speak only as of the date made, and we
undertake no obligation to update such forward-looking statements. These
forward-looking statements generally will be accompanied by words such as
"anticipate," "believe," "estimate," "expect," "forecast," "intend," "possible,"
"potential," "predict," "project," or other similar words that convey an
uncertainty about future events or outcomes. Although we believe these
forward-looking statements are reasonable, they are based on a number of
assumptions concerning future conditions, any and all of which may ultimately
prove to be inaccurate. Forward-looking statements involve a number of risks and
uncertainties. Our plans for capital and exploratory spending and for cost and
expense reduction may change if business conditions, such as energy prices and
world economic conditions, change. Other factors that may have a direct bearing
on our results of operations and financial condition are:
- Competitive practices in our industry;
- Volatility of oil and gas prices;
- Operational and systems risks;
- Environmental liabilities that are not covered by indemnity or insurance;
- General economic and capital market conditions, including fluctuations in
interest rates;
- The impact of current and future laws and governmental regulations,
including environmental regulations, affecting the energy industry in
general and Remington in particular;
- The uncertainty of estimates of oil and gas reserves;
- Our ability to discover or otherwise acquire additional reserves;
- The amount, nature and timing of capital expenditures, including future
development costs;
- The cost of goods and services we use to explore for, develop, and
produce our reserves;
- Actions or inactions of third party operators of our properties;
- Difficulties encountered during the exploration for and development and
production of oil and gas;
- Difficulties encountered in delivering oil and gas to commercial markets;
and
- The uncertainty of our ability to raise capital.
Any of the factors listed above and other factors contained in this
prospectus supplement and the accompanying prospectus could cause our actual
results to differ materially from the results implied by these or any other
forward-looking statements made by us or on our behalf. We cannot assure you
that our future results will meet our expectations. You should pay particular
attention to the discussion of risk factors beginning on page 5 of the
accompanying prospectus and cautionary statements set forth in our Annual Report
on Form 10-K for the year ended December 31, 2001, which is incorporated herein
by reference.
DOCUMENTS INCORPORATED BY REFERENCE
In addition to any documents incorporated by reference in the accompanying
prospectus, this prospectus supplement incorporates by reference our Annual
Report on Form 10-K for year ended December 31, 2001, filed with the Securities
and Exchange Commission on March 21, 2002. Remington will provide a free copy of
the 2001 Form 10-K (without exhibits which can be obtained for a nominal
charge). Contact us at (214) 210-2650 to order a copy of our 2001 Form 10-K.
S-3
THE COMPANY
We are an independent oil and gas exploration and production company
incorporated in Delaware. We began operations as OKC Limited Partnership in
1981. In 1992, we converted into a corporation named Box Energy Corporation. We
changed our name to Remington Oil and Gas Corporation in 1997.
Our primary business operation is the exploration, development and
production of oil and gas reserves in the offshore Gulf of Mexico and onshore
Gulf Coast areas. As of December 31, 2001, we had net proved reserves of 195.1
Bcfe, 57% of which was natural gas. Our offshore Gulf of Mexico properties
account for approximately 64% of our oil production and approximately 89% of our
gas production. In addition, total revenues from offshore Gulf of Mexico oil and
gas production during 2001 accounted for approximately 84% of our total oil and
gas revenues. We own varying working interests (5% to 100%) in 72 offshore Gulf
of Mexico blocks at December 31, 2001, and currently produce from 20 of these
blocks with 8 additional blocks currently under development. We operate 10 of
the total 28 producing blocks. All of these blocks are located in water depths
of less than 600 feet on the outer continental shelf of the Gulf of Mexico. In
addition, we have invested in long-term 3-D seismic licensing agreements
covering approximately 2,700 blocks in this area. These agreements combined with
our computer technology provide our technical team immediate in-house access to
this seismic data.
Our long-term strategy is to increase our oil and gas production and
reserves while keeping our operating costs and our finding and development costs
competitive with our industry peers. Over the last three years, we have invested
$224.8 million in oil and gas properties, found 190.0 Bcfe of proved reserves
and replaced 265% of our production at a finding and development cost of $1.18
per Mcfe. The following table reflects our operational results during the last
three years.
% INCREASE % INCREASE
2001 (DECREASE) 2000 (DECREASE) 1999
------- ---------- ------- ---------- -------
Production:
Oil MBbls......................... 1,249 2% 1,221 3% 1,183
Gas MMcf.......................... 21,334 65% 12,934 30% 9,939
------- ------- -------
Total MMcfe(1)...................... 28,828 42% 20,260 19% 17,037
======= ======= =======
Proved reserves:
Oil MBbls......................... 13,865 34% 10,370 44% 7,177
Gas MMcf.......................... 111,920 26% 88,650 35% 65,508
------- ------- -------
Total MMcfe(1)...................... 195,110 29% 150,870 39% 108,570
======= ======= =======
Production costs per Mcfe(2)........ $ 0.53 2% $ 0.52 0% $ 0.52
Finding costs per Mcfe(3)........... $ 1.68 73% $ 0.97 41% $ 0.69
Percentage of production replaced... 253% 309% 234%
---------------
(1) Barrels of oil are converted to Mcf equivalents at the ratio of 1 barrel of
oil equals 6 Mcf of gas.
(2) Production costs include operating, transportation and Net Profits expense.
(3) Finding costs include acquisition, development and exploration costs
(including exploration costs such as seismic acquisition costs).
S-4
THE OFFERING
Common stock offered by
Remington..................... 3,000,000 shares
Common stock outstanding
before the offering........... 22,776,412 shares
Common stock outstanding after
the offering.................. 25,776,412 shares
Nasdaq National Market
symbol........................ ROIL
The number of shares of our common stock to be outstanding after the
offering is based on 22,776,412 shares of our common stock outstanding as of
March 18, 2002. This number excludes a total of 4,044,058 shares of our common
stock subject to outstanding options, stock grants or the director stock
purchase plan or reserved for issuance under these programs.
S-5
CAPITALIZATION
The following table sets forth our capitalization as of December 31, 2001
on an actual basis, and as adjusted to reflect the application of our net
proceeds of this offering as described in this prospectus supplement. This table
should be read in conjunction with our consolidated financial statements and
related notes contained in our Annual Report on Form 10-K for 2001.
DECEMBER 31, 2001
----------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS,
EXCEPT SHARE DATA)
(UNAUDITED)
Cash and cash equivalents................................... $ 19,377 $ 28,221
======== ========
Current portion of long term debt........................... $ 3,208 $ 3,208
Long-term debt -- notes payable............................. 71,000 27,000
Long-term debt other........................................ 3,758 3,758
-------- --------
Total debt........................................ 77,966 33,966
Stockholders' equity:
Preferred stock, $0.01 par value, 25,000,000 shares
authorized; none outstanding......................... -- --
Common stock, $0.01 par value, 100,000,000 shares
authorized; 22,685,240 shares issued and 22,650,881
outstanding; and 25,685,240 shares issued and
25,650,881 outstanding, as adjusted.................. 227 257
Additional paid-in capital............................. 56,698 109,512
Retained earnings...................................... 64,939 64,939
Other.................................................. 3,474 3,474
-------- --------
Total stockholders' equity........................ 125,338 178,182
-------- --------
Total capitalization.............................. $203,304 $212,148
======== ========
S-6
USE OF PROCEEDS
We expect to receive net proceeds of approximately $52.8 million after
deducting the underwriting discount and estimated expenses in connection with
this offering. We plan to initially use $44 million of the net proceeds to
reduce our bank debt, the total principal balance of which was $71.0 million as
of March 18, 2002. The interest rate on the $44 million tranche of the bank debt
is 4.125%. We will initially use the remainder of the proceeds (approximately
$8.8 million) to increase working capital and for general corporate purposes.
Ultimately we plan to use the proceeds and available amounts under our credit
facility to expand our oil and gas exploration, production and development
activities including acquisitions, although currently we have no particular
acquisitions targeted. We require this additional capital because the additional
reserves that resulted from our exploratory success and our record of reserve
growth in recent years necessitates further development expenditures.
S-7
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
dated as of March 22, 2002, we have agreed to sell to Jefferies & Company, Inc.,
and Jefferies has agreed to purchase, 3,000,000 shares of our common stock.
The underwriting agreement provides that Jefferies' obligation to purchase
shares of our common stock depends on the satisfaction of the conditions
contained in the underwriting agreement, including:
- the representations and warranties made by us to Jefferies are true;
- there has been no material adverse change in our condition or in the
financial markets; and
- we deliver to Jefferies the customary closing documents.
We have been advised by Jefferies that it proposes to offer the common
stock directly to the public at the public offering price set forth on the front
cover page of this prospectus supplement.
The following table shows the underwriting fees to be paid to Jefferies by
us in connection with this offering. This underwriting fee is the difference
between the initial price to the public and the amount Jefferies pays to us to
purchase the shares from us. On a per share basis, the underwriting fee is 4.5%
of the initial price to the public.
PER SHARE TOTAL
--------- -----------
Public offering price....................................... $18.500 $55,500,000
Underwriting discount....................................... $ 0.832 $ 2,496,000
Proceeds, before expenses, to Remington..................... $17.668 $53,004,000
In addition, we will reimburse Jefferies for all reasonable fees,
disbursements and out-of-pocket expenses incurred by Jefferies in connection
with this offering. We estimate the total expenses payable by us in connection
with the offering, excluding underwriting discounts and commissions, will be
approximately $160,000.
We have agreed to indemnify Jefferies against certain liabilities,
including liabilities under the Securities Act or to contribute payments that
may be required to be made in respect thereof.
We and our directors and officers have agreed, for a period of 90 days from
the date of this prospectus supplement, not to, directly or indirectly, offer,
sell or otherwise dispose of any shares of common stock or securities
convertible into or exchangeable or exercisable for any shares of common stock
or enter into any derivative transaction with similar effect as a sale of common
stock, without the prior written consent of Jefferies. The restrictions
described in this paragraph do not apply to (a) the sale of common stock to
Jefferies, (b) shares sold under this offering, (c) a bona fide gift of any
shares of common stock or securities convertible into or exchangeable or
exercisable for any shares of common stock or (d) securities issued or sold in
connection with any of our stock option or employee benefit plans.
S-8
LEGAL MATTERS
The validity of the common stock will be passed upon for us by Andrews &
Kurth L.L.P., Dallas, Texas. Certain legal matters in connection with the common
stock will be passed upon for the underwriter by Vinson & Elkins L.L.P.,
Houston, Texas.
EXPERTS
The consolidated audited financial statements incorporated in this
prospectus supplement by reference to the Remington Oil and Gas Corporation
Annual Report on Form 10-K for the year ended December 31, 2001, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report with respect thereto and included herein in reliance upon the
authority of said firm as experts in accounting and auditing.
Arthur Andersen LLP has made the representations to us that are required by
the Securities and Exchange Commission for filings that include accountant's
reports from Arthur Andersen issued after March 14, 2002, so that our audited
financial statements may be included in our 2001 Form 10-K and accepted by the
Securities and Exchange Commission.
The Securities and Exchange Commission issued Release Nos. 33-8070 and
34-45590 on March 18, 2002, stating that it will continue to accept filings that
include accountant's reports from Arthur Andersen issued after March 14, 2002,
provided that issuers obtain from Arthur Andersen representations regarding
audit quality controls which include the following representations directly
applicable to us:
- The audit was subject to Arthur Andersen's quality control system for the
U.S. accounting and auditing practice to provide reasonable assurance
that the engagement was conducted in compliance with professional
standards; and
- There was appropriate continuity of Arthur Andersen personnel working on
audits and availability of national office consultation.
We have received these required representations from Arthur Andersen in
connection with the delivery of their audit report for the year ended December
31, 2001.
RESERVE ENGINEERS
We have derived the estimates of proved oil and gas reserves and related
future net revenues and the present value thereof as of December 31, 2001, 2000,
and 1999, included in Remington Oil and Gas Corporation's Annual Report on Form
10-K for the year ended December 31, 2001, from the reserve reports of
Netherland, Sewell & Associates, Inc. and Miller and Lents, Ltd., our
independent reserve engineers. We have incorporated all of that information by
reference herein on the authority of Netherland, Sewell & Associates, Inc. and
Miller and Lents, Ltd. as experts in such matters.
S-9
PROSPECTUS
[REMINGTON OIL AND GAS CORPORATION LOGO]
REMINGTON OIL AND GAS CORPORATION
$110,000,000
COMMON STOCK
Remington Oil and Gas Corporation from time to time may offer and sell
shares of its common stock, par value $0.01 per share. In addition, we currently
have convertible debt in the principal amount of $5,880,000 outstanding. These
8 1/4% Convertible Subordinated Notes due December 2002, are convertible into
our common stock at $11.00 of principal amount of notes per share of common
stock. Therefore, 535,000 shares of the common stock covered by this prospectus
and any applicable prospectus supplement are reserved for such conversion, if
any. In the event any of the holders of the shares converted from the notes sell
these shares as selling security holders under this prospectus and any
applicable prospectus supplement, Remington would not receive any proceeds from
the sale of such shares. This prospectus also covers and any applicable
prospectus supplement will cover an additional 200,000 shares of our common
stock issuable upon the exercise of certain warrants granted S-Sixteen Limited
Partnership. We granted the warrants in connection with the merger of S-Sixteen
Holding Company into Remington in December of 1998. We will receive the proceeds
from the exercise of the warrants but will not receive any proceeds from any
sale by S-Sixteen of the shares acquired by means of the exercise of the
warrants.
We will offer shares of common stock for our own account in amounts and at
prices to be determined by market conditions at the time of our offering.
We will provide the specific terms of any offering of the common stock in
supplements to this prospectus. This prospectus may not be used to sell
securities unless it is accompanied by a prospectus supplement that describes
those securities.
Our common stock is listed on the Nasdaq National Market under the trading
symbol "ROIL" and on the Pacific Exchange under the trading symbol "REM.P." Any
common stock sold pursuant to a prospectus supplement will be listed on these
exchanges subject to official notice of issuance. On March 21, 2001 the last
reported sales price for our common stock was $14.25.
BEFORE YOU INVEST, YOU SHOULD CAREFULLY READ THIS PROSPECTUS AND ANY
APPLICABLE PROSPECTUS SUPPLEMENT, INCLUDING THE INFORMATION UNDER THE HEADING
"RISK FACTORS" BEGINNING ON PAGE 5 OF THIS PROSPECTUS AND UNDER THE SAME HEADING
IN ANY PROSPECTUS SUPPLEMENT AS WELL AS ANY INFORMATION UNDER THE HEADING "WHERE
YOU CAN FIND MORE INFORMATION ABOUT REMINGTON."
We may sell these securities to or through underwriters, to other
purchasers, and/or agents. The accompanying prospectus supplement will specify
the names of any underwriters or agents.
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.
This prospectus is dated April 9, 2001
TABLE OF CONTENTS
PAGE
----
ABOUT THIS PROSPECTUS....................................... 1
WHERE YOU CAN FIND MORE INFORMATION ABOUT REMINGTON......... 1
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING
STATEMENTS................................................ 2
OUR COMPANY................................................. 3
RISK FACTORS................................................ 5
USE OF PROCEEDS............................................. 10
DESCRIPTION OF CAPITAL STOCK................................ 10
SELLING SECURITY HOLDERS.................................... 13
HOLDERS OF 8 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2002... 14
HOLDER OF WARRANTS.......................................... 14
PLAN OF DISTRIBUTION........................................ 14
LEGAL MATTERS............................................... 15
EXPERTS..................................................... 16
RESERVE ENGINEERS........................................... 16
(ii)
ABOUT THIS PROSPECTUS
This prospectus may not be used to sell securities unless it is accompanied
by a prospectus supplement.
In this prospectus, the terms "Remington," "Company," "we," "us" and "our"
generally mean Remington Oil and Gas Corporation, a Delaware corporation, and
its consolidated subsidiaries.
We may sell the common stock from time to time, in one or more offerings.
In this prospectus, we sometimes refer to the common stock to be offered as the
"securities."
This prospectus is part of a registration statement that Remington filed
with the Securities and Exchange Commission (SEC) utilizing a "shelf"
registration process. Under this shelf process, we and the selling security
holders may sell a presently undetermined number of shares of common stock
described in this prospectus in one or more offerings up to a total of
$110,000,000. The selling security holders may sell up to 735,000 shares of
common stock.
This prospectus provides you with a general description of the common stock
we or the selling security holders may offer. Each time we or the selling
security holders offer to sell common stock, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. Any prospectus supplement may also add, update or change information
contained in this prospectus. If there is any inconsistency between the
information in this prospectus and any prospectus supplement, you should rely on
the information in the prospectus supplement. The registration statement filed
with the SEC includes exhibits that provide more details about the matters
discussed in this prospectus. You should read this prospectus, the related
exhibits filed with the SEC, the applicable prospectus supplement and the
additional information described below under the heading "Where You Can Find
More Information about Remington."
WHERE YOU CAN FIND MORE INFORMATION ABOUT REMINGTON
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference rooms located at:
- 450 Fifth Street, N.W.
Washington, D.C. 20549;
- 7 World Trade Center
New York, New York 10048; and
- Citicorp Center
500 West Madison Street
Chicago, Illinois 60661.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms and their copy charges.
We have been listed on the Nasdaq National Market and The Pacific Exchange
since 1992. Accordingly, you may inspect the information we file with the SEC at
the Nasdaq Stock Market, 1735 K Street, N.W., Washington, D.C. and at The
Pacific Exchange, 301 Pine Street, San Francisco, California.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus.
Information that we file with the SEC after the date of this prospectus, and
prior to the termination of the offering of the common
1
stock covered by this prospectus will automatically update and supersede this
information. We incorporate by reference the documents filed by us listed below:
- Annual Report on Form 10-K for the fiscal year ended December 31, 2000;
and
- Description of our capital stock contained in our Registration Statement
on Form 8-A filed with the SEC on December 16, 1998.
These documents are available from the SEC's web site and public reference
rooms described above. You may also request a copy of these filings, excluding
exhibits, at no cost by writing or calling our corporate secretary, at our
principal executive office as follows:
Remington Oil and Gas Corporation
8201 Preston Road, Suite 600
Dallas, Texas 75225-6211
(214) 210-2650
In addition, we incorporate by reference into this prospectus 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 our offering is completed, including
filings after the date of the initial registration statement and prior to the
effectiveness of the registration statement.
You should rely only on the information incorporated by reference or
provided in this prospectus or the applicable prospectus supplement. We have
authorized no one to provide you with different information. We are not making
an offer of the securities covered by this prospectus in any state that the
offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement or any other document incorporated by
reference in this prospectus is accurate as of any date other than the dates of
those documents.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus contain "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Such statements generally will be accompanied by words such as
"anticipate," "believe," "estimate," "expect," "forecast," "intend," "possible,"
"potential," "predict," "project," or other similar words that convey an
uncertainty about future events or outcomes. Although we believe these
forward-looking statements are reasonable, they are based upon a number of
assumptions concerning future conditions, any and all of which may ultimately
prove to be inaccurate. Forward-looking statements involve a number of risks and
uncertainties. Our plans for capital and exploratory spending and for cost and
expense reduction may change if business conditions, such as energy prices and
world economic conditions, change. Other factors that may have a direct bearing
on our results of operations and financial condition are:
- Competitive practices in our industry;
- Volatility of oil and gas prices;
- Operational and systems risks;
- Environmental liabilities that are not covered by indemnity or insurance;
- General economic and capital market conditions, including fluctuations in
interest rates;
- The impact of current and future laws and governmental regulations,
including environmental regulations, affecting the energy industry in
general and Remington in particular;
- The result and timing of any court rulings in our litigation with
Phillips Petroleum Company;
- The uncertainty of estimates of oil and gas reserves;
2
- Our ability to discover or otherwise acquire additional reserves;
- The cost of goods and services we use to explore for, develop, and
produce our reserves;
- Difficulties encountered during the exploration for and development and
production of oil and gas;
- Difficulties encountered in delivering oil and gas to commercial markets;
and
- The uncertainty of our ability to raise capital.
OUR COMPANY
We are an independent oil and gas exploration and production company
incorporated in Delaware. Our oil and gas properties are located in the Gulf of
Mexico Shelf, and onshore Gulf Coast. We treat these areas as one line of
business.
We began as OKC Limited Partnership in 1981. In 1992, we converted to a
corporation named Box Energy Corporation. We changed our name to Remington Oil
and Gas Corporation in 1997. In December 1998, we restructured our two classes
of common stock into a single class of voting common stock.
Our long-term strategy is to increase our oil and gas reserves and
production while keeping our finding and development costs and production costs
competitive with or better than industry peers. The following table reflects our
results during the last three years.
% INCREASE % INCREASE
2000 (DECREASE) 1999 (DECREASE) 1998
-------- ---------- -------- ---------- -------
Production:
Oil MBbls............................... 1,221 3% 1,183 (5)% 1,245
Gas MMcf................................ 12,934 30% 9,939 56% 6,383
-------- -------- -------
Total MMcfe(1)............................ 20,260 19% 17,037 23% 13,853
======== ======== =======
Proved reserves (as of December 31):
Oil MBbls............................... 10,370 44% 7,177 30% 5,519
Gas MMcf................................ 88,650 35% 65,508 24% 52,709
-------- -------- -------
Total MMcfe(1)............................ 150,870 39% 108,570 27% 85,823
======== ======== =======
Production costs per Mcfe(2).............. $ 0.43 0% $ 0.43 (30)% $ 0.61
Finding and development costs per
Mcfe(3)................................. $ 0.97 41% $ 0.69 (43)% $ 1.21
---------------
(1) Barrels of oil are converted to Mcf equivalents at the ratio of 1 barrel of
oil equals 6 Mcf of gas.
(2) Production costs include operating and transportation expense.
(3) Finding and development costs include acquisition, development and
exploration costs (including exploration costs such as seismic acquisition
costs).
Our three-year (1998-2000) finding and development costs were $0.95 per
Mcfe, significantly lower than those of most of our Gulf Coast peers. Our
production expenses are competitive with our Gulf Coast peers. We utilize an
extensive 3-D seismic database covering over 2,700 offshore Gulf of Mexico
blocks to define potential oil and gas deposits located below the earth's
surface. Our extensive 3-D seismic database allows us to internally generate the
majority of our drilling locations. We then secure the oil and gas mineral
rights to the location(s) and drill exploratory wells to evaluate the presence
or absence of commercial quantities of hydrocarbons. Because most of our
operations are located in the offshore Gulf of Mexico, significant capital
expenditures are necessary for the development of newly discovered oil and gas
deposits. We typically retain the control of our operations on our internally
generated drilling locations and development projects to more effectively
control the timing of the operations and the associated capital expenditures.
3
We have been involved in litigation with Phillips Petroleum Company over a
1977 farmout of South Pass 89 offshore Louisiana and the associated 33% net
profits interest. In the past South Pass 89 was our major property, but as of
year-end 2000, it accounted for only 5.3% of our oil and gas reserves. Phillips
has claimed that we should have allocated the full $69.6 million received in
1990 from Texas Eastern Transmission Co., or TETCO, in settlement of litigation
between TETCO and us, to the net profits account. Further, Phillips claims that
we have overcharged for the transportation of oil and that we have not credited
Phillips with overriding royalty payments in months in which no net profits were
achieved. This matter went to trial in 1997. The trial court determined we owed
Phillips a total of $18.0 million based on findings adverse to us on the TETCO
and overriding royalty issues. The trial court found in our favor on the
transportation issue. Including statutory interest to December 31, 2000, the
total amount owed Phillips as a result of the trial court judgment is $19.7
million. We have reflected this total as a non-current liability in our various
financial statements. In addition, we have posted a suspensive appeal bond in
the amount of $18.0 million, and we have placed cash collateral of $9.0 million
with the surety. On December 15, 2000, the Louisiana Fourth Court of Appeal
affirmed the trial court's judgment with only minor changes. Phillips continues
to appeal, this time to the Louisiana Supreme Court. This ongoing litigation has
caused commercial bankers to be reluctant to grant us loans commensurate with a
typically calculated borrowing base. Therefore, we have been limited primarily
to utilizing our cash flow from operations to fund our capital programs. We
continue to vigorously defend against Phillips' claims.
Our litigation with Phillips is discussed later in this prospectus in "Risk
Factors" under the heading "The Phillips litigation affects our ability to
obtain capital" as well as in the documents incorporated by reference into this
prospectus and/or any prospectus supplement.
The foregoing information about Remington and its business is only a
general summary and is not intended to be comprehensive. For additional
information about Remington and its business, you should refer to the
information described under the caption "Where You Can Find More Information
about Remington" located on page 1 of this prospectus.
4
RISK FACTORS
In addition to the information contained in this prospectus, in the
prospectus supplements, and in the documents incorporated by reference into this
prospectus, you should carefully consider the following information before
making an investment decision. The actual occurrence of one or more of the
following risk factors could materially and adversely affect our financial
condition and our results of operations. Additional risks and uncertainties not
presently known to us may also impair our business operations.
This prospectus also contains forward-looking statements that involve risks
and uncertainties. Our actual results may differ from those anticipated in these
forward-looking statements as a result of both the risks described below and
factors described elsewhere in this prospectus. You should read the section
above entitled "Cautionary Statements Regarding Forward-Looking Statements" for
a discussion of these matters.
OIL AND GAS PRICES ARE VOLATILE, AND LOW PRICES HAVE HAD IN THE PAST AND COULD
HAVE IN THE FUTURE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS.
Our financial condition and results of operations depend on the prices we
receive for the oil and gas we produce. The market prices for oil and gas are
subject to fluctuation in response to events beyond our control, such as:
- supply of and demand for oil and gas,
- market uncertainty,
- worldwide political and economic instability, and
- government regulations.
Oil and gas prices have historically been volatile, and such volatility is
likely to continue. Our ability to estimate the value of producing properties
for acquisition and to budget and project the financial return of exploration
and development projects is made more difficult by this volatility. While we
attempt to plan our operations using a common sense view of oil and gas prices,
a dramatic decline in such prices could have a substantial and material effect
on our:
- revenues,
- financial condition,
- results of operations,
- ability to economically increase reserves and production, and
- access to capital.
A resulting significant decline in our cash flow from operations could
cause us to fail to meet our operational obligations requiring us to modify our
capital expenditure program which could then affect our level of production and
our ability to find and develop reserves. Moreover, such a decline could affect
the measure of the discounted future net cash flow from reserves, which could
then affect our borrowing base and may increase the likelihood that we will
incur impairment charges on our oil and gas properties for financial accounting
purposes.
OUR FUTURE SUCCESS DEPENDS ON OUR ABILITY TO ECONOMICALLY INCREASE OUR RESERVES
AND PRODUCTION. OUR GULF OF MEXICO PROPERTIES HAVE RELATIVELY SHORT PRODUCTION
LIVES AND REQUIRE SIGNIFICANT CAPITAL EXPENDITURES TO MAINTAIN PRODUCTION. THUS,
IT IS MORE DIFFICULT FOR US TO REPLACE OUR RESERVES AND PRODUCTION THAN FOR
COMPANIES WHOSE RESERVES HAVE LONGER PRODUCTION LIVES.
Our future success will depend on our ability to find, develop or acquire
additional economically recoverable oil and gas reserves and convert these
reserves to production. Because our proved reserves will
5
normally decline as they are produced, we must maintain successful exploration
and development activities in order to replace reserves depleted through
production. We cannot assure the investing public that we will be successful in
replacing our reserves in an economically viable manner.
OUR FORWARD SALES DECISIONS REGARDING SOME OF OUR PRODUCTION MAY REDUCE OUR
POTENTIAL GAINS FROM INCREASES IN OIL AND GAS PRICES. WE MAY ENGAGE IN OTHER
HEDGING ACTIVITIES THAT ARE NOT PROFITABLE.
We cannot predict future oil and gas prices with certainty. To manage our
exposure to the risks inherent in such a volatile market, from time to time, we
have sold forward for future physical delivery an amount, not more than half, of
our future production. This means that a portion of our production is sold at a
fixed price as a shield against dramatic price declines that could occur in the
market. We may from time to time engage in other hedging activities that limit
our upside potential from price increases. These sales activities may limit our
benefit if dramatic price increases occur.
OUR ACTUAL DRILLING RESULTS MAY DIFFER FROM OUR ESTIMATES OF PROVED RESERVES. WE
MAY EXPERIENCE PRODUCTION THAT IS LESS THAN THAT ESTIMATED IN OUR RESERVE
REPORTS AND DRILLING AND PRODUCTION COSTS THAT ARE GREATER THAN THOSE ESTIMATED
IN OUR RESERVE REPORTS.
Our estimates of the quantities of proved reserves and our projections of
both future production rates and the timing of development expenditures are
uncertain. You should not construe these reserve estimates as the current market
value of our oil and gas reserves. Any downward revisions of these estimates
could adversely affect our financial condition and borrowing base under the
credit facility described under the following risk factor.
Netherland, Sewell, & Associates, Inc. and Miller and Lents, Ltd., our
independent reservoir engineers, estimate our reserves. The accuracy of these
reserve estimates depends in large part on the quality of available data and on
the engineering and geological interpretation by these reservoir engineers.
Because they are estimates, they are subject to revision based on the results of
actual drilling, testing, and production and will often differ from the
quantities of oil and gas we ultimately recover.
Further, the estimate of our future net cash flow contained in our reserve
report depends upon numerous assumptions including the quantity of recoverable
reserves, the cost of producing those reserves, and the price received for the
production. To the extent these assumptions prove inaccurate, material changes
to our estimates of our future net cash flow and our reserves could result.
OUR LIMITED BORROWING BASE UNDER OUR BANK LOAN MAY AFFECT OUR ABILITY TO REPLACE
OUR RESERVES AND INCREASE OUR PRODUCTION.
We have a $50.0 million credit facility with a bank. The current borrowing
base of $35.0 million may increase or decrease semi-annually relative to a
redetermined estimate of proved oil and gas reserves. As of March 22, 2001,
there are $27.4 million borrowed and outstanding under the credit facility.
While the value of our properties that serve as collateral for the credit
facility far exceeds the current borrowing base, the litigation with Phillips
has made it impossible to obtain a significant increase in the borrowing base or
the facility itself, whether through the current individual institution or a
syndication with one or more other institutions.
Because we have been unable to obtain a significant increase in the
borrowing base, the sources of funds for our capital expenditures are limited
mainly to our cash flow from operations. This limitation could reduce or even
prevent our participation in certain exploration and development operations
concerning properties in which we hold an interest, and it could impair our
ability to acquire additional properties. These constraints in our participation
and acquisition functions potentially threaten our ability to increase our
reserves and production, which could materially affect our cash flow and results
of operations.
6
THE PHILLIPS LITIGATION AFFECTS OUR ABILITY TO OBTAIN CAPITAL.
Our litigation with Phillips Petroleum Company is a material contingency.
In 1998, the trial court entered a judgment against us in the amount of $18.0
million. We recorded an $18.0 million charge to income in the third quarter of
1998 and continue to accrue interest on this liability each quarter. The present
total liability is $19.7 million. In January 2000, the Court of Appeal issued a
decision that would result in a judgment against us of approximately $56.3
million over and above the judgment of the trial court. In December 2000, the
Court of Appeal unanimously vacated its earlier decision and reinstated the
trial court's judgment. We have posted a suspensive appeal bond in the amount of
$18.0 million, and we have placed cash collateral of $9.0 million with the
surety. As discussed above in "Our limited borrowing base under our bank loan
may affect our ability to replace our reserves and increase our production," the
unresolved nature of the Phillips litigation has made it very difficult to
significantly expand the borrowing base on our credit facility. Thus, our
ability to acquire and develop new properties with funds in excess of our cash
flow from operations is limited until a resolution of the litigation is reached.
Currently, this litigation is being appealed by Phillips to the Louisiana
Supreme Court. No decision on whether the Supreme Court will hear the case has
been made, and the timing of such a decision cannot be determined.
WE ARE DEPENDENT ON OTHER OPERATORS WHO INFLUENCE OUR PRODUCTIVITY.
Until recently we did not operate any of our properties. Currently, we
operate almost half of the offshore properties in which we hold interests. Even
on properties we do not operate we try to maintain significant influence over
the nature and timing of exploration and development activities to the extent
that the joint operating agreements so provide. However, we have limited
influence over operations on some of our oil and gas properties, including
limited control over the maintenance of both safety and environmental standards.
The operators of those properties may, depending on the terms of the applicable
joint operating agreement:
- refuse to initiate exploration or development projects,
- initiate exploration or development projects on a slower or faster
schedule than we prefer, or
- drill more wells or build more facilities on a project than we can
afford, whether on a cash basis or through adequate financing, which may
limit our participation in those projects or limit the percentage of our
revenues from those projects.
The occurrence of any of the foregoing events could have a material adverse
effect on our anticipated exploration and development activities.
ADVERSE CHANGES IN THE FINANCIAL CONDITION OF OUR JOINT INTEREST PARTNERS DUE TO
PRICE DECLINES, INDUSTRY CONDITIONS, OR EVENTS SPECIFIC TO A PARTNER MAY AFFECT
OUR ABILITY TO CARRY OUT OUR PROGRAM.
Some of our working interest owners may experience liquidity and cash flow
problems caused by, among other things, a decline in oil and gas prices. These
problems may lead to their attempting to delay the pace of drilling or
development in order to conserve cash. Any such delay may be detrimental to our
projects and the planned timing for the development of our oil and gas reserves.
THE OIL AND GAS INDUSTRY IS HIGHLY COMPETITIVE AND THIS COMPETITION INCLUDES
SOME OF THE LARGEST ENERGY FIRMS IN THE WORLD WHO CAN DEVOTE GREATER RESOURCES
TO PROJECTS THAN WE CAN.
The oil and gas industry is highly competitive. Our quest to discover
additional oil and gas reserves and acquire additional properties occurs in
competition with some the largest oil and gas companies in the world. These
companies may be able to devote significantly greater financial resources to
exploration and production projects and to federal lease sales than we can.
Moreover, if these companies operate projects in which we are joint interest
owners, they may propose exploration and development programs in which we may
not be able to participate due to financial constraints. This could cause us to
lose our interest, at
7
least for a time, in a particular lease or project. In addition, we compete with
these companies in the hiring and retention of talented technical employees.
GOVERNMENT REGULATION MAY AFFECT OUR ABILITY TO CONDUCT OPERATIONS.
Numerous state and federal laws and regulations affect our operations.
These laws and regulations govern safety, exploration, development, taxation and
environmental matters that are related to the oil and gas industry. To conserve
oil and gas supplies as well as to lessen perceived environmental problems,
regulatory agencies may limit the regions authorized for oil and gas exploration
and development, impose price controls and tax burdens, and limit production
from certain areas of exploration and development. Certain laws and regulations
require drilling permits and other operational approvals, govern the spacing of
wells and the prevention of waste, and limit the total number of wells drilled
or the total allowable production from successful wells. Other laws and
regulations govern the handling, storage, transportation and disposal of oil and
natural gas and any byproducts produced in oil and gas operations. These
regulations could adversely affect our operations and our revenues.
Laws and regulations that affect us may change from time to time in
response to economic or political conditions. Thus, we must also consider the
impact of future laws and regulations that may become effective in the
jurisdictions in which we operate. We anticipate that future laws and
regulations related to the oil and gas industry will become increasingly
stringent and cause us to incur substantial compliance costs.
THE NATURE OF OUR BUSINESS EXPOSES US TO ENVIRONMENTAL LIABILITIES.
Our operations create the risk of environmental liabilities. We may incur
liability to governments or to third parties for any unlawful discharge of oil,
gas or other pollutants into the air, soil or water. We could potentially
discharge oil or gas into the environment in any of the following ways:
- from a well or drilling equipment at a drill site,
- from a leak in storage tanks, pipelines or other gathering and
transportation facilities,
- from damage to oil and gas wells resulting from accidents during
otherwise normal operations, or
- from blowouts, cratering or explosions.
Environmental discharges may move through the soil to water supplies or to
adjoining properties, giving rise to additional liabilities. Some laws and
regulations could impose liability for failure to obtain the proper permits for,
to control the use of, or to notify the proper authorities of a hazardous
discharge. Such liability could have a material adverse effect on our financial
condition and our results of operations and could possibly cause our operations
to be suspended.
We may also be liable for any environmental hazards created either by the
previous owners of properties that we purchase or lease or by acquired companies
prior to the date we acquire them. Such liability would affect the cost of our
acquisition of these properties. In connection with any of these environmental
violations, we may also be charged with remedial costs.
Although we do not believe that our environmental risks are materially
different from those of our peers in the oil and gas industry, the environmental
laws could result in decreased production, substantially increased costs of our
operations, or other effects adverse to our operations or financial condition.
OUR BUSINESS EXPOSES US TO CASUALTY RISKS ABOVE OUR INSURANCE COVERAGE.
Our offshore and onshore operations are subject to inherent casualty risks
such as fires, blowouts, cratering and explosions. Other risks include
pollution, the uncontrollable discharge of oil, gas, brine or well fluids, and
hazards of marine and helicopter operations such as capsizing, collision, and
adverse weather and sea conditions. These risks may result in injury or loss of
life, suspension of operations,
8
environmental damage or property and equipment damage, all of which could cause
us to experience substantial losses.
Our drilling operations involve risks from high pressures in the wells and
from mechanical difficulties such as stuck pipe, collapsed casing and separated
cable. Our offshore properties involve higher exploration and drilling risks
such as the cost of constructing exploration and production platforms and
pipeline interconnections as well as weather delays and other risks.
We maintain insurance coverage against some, but not all, potential losses.
This insurance coverage includes, among other things, comprehensive general
liability, business interruption and limited coverage for sudden environmental
damage. We do not believe that insurance to cover environmental damage that
occurs over time or insurance to fully cover sudden environmental damage is
available at a reasonable cost. Accordingly, we may be subject to liability or
may lose substantial portions of our properties in the event of environmental
damage. The occurrence of an event that is not fully covered by insurance could
have a material adverse effect on our results of operations and financial
condition.
WE UNDERTAKE SIGNIFICANT OPERATIONAL RISKS CONNECTED WITH OUR BUSINESS.
Our drilling activities involve risks, such as drilling non-productive
wells or dry holes, which are beyond our control. Often, the cost of drilling
and operating wells and of installing production facilities is uncertain. Cost
overruns are common risks that sometimes make a project uneconomical. The
decision to purchase and exploit a prospect property depends on the evaluations
of our operations staff. We may also decide to reduce or cease our drilling
operations due to title problems, weather conditions, noncompliance with
governmental requirements or shortages and delays in the delivery or
availability of equipment or fabrication yards.
Another risk of our operations is the difficulty in marketing of our oil
and gas production. The proximity of our reserves to pipelines and the available
capacity of pipelines and other transportation, processing and refining
facilities also affect the marketing efforts. Even if we discover hydrocarbons
in commercial quantities, a substantial period of time may elapse before we
begin commercial production. If pipeline facilities in an area are insufficient,
we may have to arrange for, and possibly bear the cost of, the construction or
expansion of pipeline capacity before our production from that area can be
marketed. Furthermore, if any of the major facilities into which we deliver our
product become non-operational for any reason, our sales will be adversely
affected.
WE DEPEND UPON KEY PERSONNEL TO DEVELOP AND EXECUTE OUR BUSINESS PLAN.
The loss of any key officers or other key personnel could have a material
adverse affect on our operations. We depend on the efforts and skills of our key
officers, including James A. Watt, President and Chief Executive Officer and
Robert P. Murphy, Chief Operating Officer. We do not maintain key man insurance.
As we continue to grow our asset base with a like increase in production, our
future profitability will depend in part on our ability to attract and retain
qualified personnel.
OUR RESTATED CERTIFICATE OF INCORPORATION AND BYLAWS CONTAIN PROVISIONS WHICH
PROHIBIT STOCKHOLDER ACTION BY WRITTEN CONSENT AND LIMIT THE ABILITY OF
STOCKHOLDERS TO CALL SPECIAL STOCKHOLDERS MEETINGS. THESE RESTRICTIONS HAVE THE
EFFECT OF MAKING IT MORE DIFFICULT FOR STOCKHOLDERS TO ACT OUTSIDE OF AN ANNUAL
MEETING OR A SPECIAL MEETING CALLED BY THE COMPANY.
When we reclassified our two classes of stock into a single voting class in
1998, with the approval of the stockholders we also amended and restated our
Certificate of Incorporation and amended certain Bylaws. Pursuant to these
amendments, the stockholders cannot take action by written consent, and special
stockholders meetings may be called only by the Chairman of the Board, the
Company's president or a majority of the Board of Directors. Further, the
amendments provide that these particular provisions in the Restated Certificate
of Incorporation can be amended only by the affirmative vote of 66 2/3% of the
stockholders, and the Bylaws can be amended only by the affirmative vote of
66 2/3% of the total number of authorized directors (regardless of any vacancies
in the Board of Directors) or the affirmative vote of 66 2/3% of the
stockholders. These restrictions limit the ability of stockholders to take
action outside of the
9
Company's annual meeting and limit their ability to call special meetings. As a
result, contests by stockholders to remove the Board or to take other action are
made more difficult.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying prospectus supplement, we
expect to use the net proceeds from the sale of our common stock for our own
account for general corporate purposes, which may include, among other things:
- the repayment of outstanding indebtedness;
- working capital;
- capital expenditures; and
- acquisitions.
The precise amount and timing of the application of such proceeds will
depend upon our funding requirements and the availability and cost of other
funds.
We will not receive any proceeds as a result of the sale by the selling
security holders of the shares registered on their behalf and covered by this
prospectus and any applicable prospectus supplement. We will receive payment
from S-Sixteen Limited Partnership in the event of the exercise of the warrants,
although we will not receive the proceeds of any sale of the common stock
received by S-Sixteen as a result of exercising the warrants.
DESCRIPTION OF CAPITAL STOCK
Our capital stock consists of common stock and preferred stock. This
prospectus only pertains to our common stock. The discussion of preferred stock
is included in this prospectus only for informational purposes. As of the date
of this prospectus, we have not issued any preferred stock. The following
description of our common stock, together with the additional information
included in any applicable prospectus supplements relating to our common stock,
summarizes the material terms of our common stock. These summaries are not
complete and are not intended to give full effect to provisions of statutory or
common law. For the complete terms of our common stock and our preferred stock,
please refer to the following documents:
- the Restated Certificate of Incorporation, which is incorporated by
reference to Exhibit 3.2.1 to our Form 10-K dated March 16, 2001; and
- the Bylaws, as amended, which are incorporated by reference to Exhibit
3.3 to our Form 10-K, dated March 16, 2001.
The General Corporation Law of the State of Delaware may also affect the
terms of our capital stock.
Under our Restated Certificate of Incorporation, as of the date of this
prospectus our authorized capital stock consists of 100,000,000 shares of common
stock, $0.01 par value per share, and 25,000,000 shares of preferred stock,
$0.01 par value per share.
COMMON STOCK
As of March 12, 2001, we had 21,633,006 shares of common stock issued and
outstanding. Also as of March 12, 2001, subject to our stock price, vesting
periods and other events, additional shares of common stock were issuable as
follows:
- up to 2,682,102 shares, issuable under our stock option plan;
- 662,592 shares, issuable in accordance with stock grants to employees and
directors;
10
- up to 148,025 shares, issuable under our non-employee director stock
purchase plan;
- 534,545 shares, issuable upon conversion of our 8 1/4% Convertible
Subordinated Notes due December 1, 2002; and
- 200,000 shares, issuable upon exercise of warrants discussed below.
All outstanding shares of common stock are, and any shares of common stock
sold pursuant to this prospectus will be, duly authorized, validly issued, fully
paid and nonassessable.
Voting
For all matters submitted for a vote of stockholders, each holder of common
stock is entitled to one vote for each share registered in his or her name on
our books. Our common stock does not have cumulative voting rights. As a result,
persons who hold more than 50% of the outstanding common stock entitled to elect
members of the Board of Directors can elect all of the directors who are
nominated for election in a particular year. If we issue preferred stock in the
future, the voting rights of holders of common stock may become subject to the
voting rights of holders of the preferred stock.
Dividends
If our Board of Directors declares a dividend, holders of common stock will
receive payments from our funds that are legally available to pay dividends.
However, this dividend right may become subject to any preferential rights we
may grant to holders of preferred stock that we may issue in the future. Since
our incorporation in 1991, we have not paid a dividend. Our current credit
agreement prohibits our paying dividends.
Liquidation
If the corporation is dissolved, the holders of common stock will be
entitled to share ratably in all the assets that remain after we pay our
liabilities and any amounts we may owe to persons who hold the preferred stock
we may issue.
Other Rights and Restrictions
Holders of common stock do not have preemptive rights, and they have no
right to convert their common stock into any other securities. Our common stock
is not subject to redemption by us. Our Restated Certificate of Incorporation
and Bylaws do not restrict the ability of a holder of common stock to transfer
his or her shares of common stock.
Delaware law provides that, if we make a distribution to our stockholders,
other than a distribution of our capital stock, either when we are insolvent or
when we would be rendered insolvent, then our stockholders would be required to
pay back to us the amount of the distribution we made to them, or the portion of
the distribution that causes us to become insolvent, as the case may be.
Listing
Our common stock is listed on the Nasdaq National Market under the symbol
"ROIL" and The Pacific Exchange under the symbol "REM.P."
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company.
Delaware Anti-takeover Statute
We are a Delaware corporation and subject to Section 203 of the Delaware
General Corporation Law. In general, Section 203 prevents us from engaging in a
business combination with an "interested
11
stockholder" (generally a person owning 15% or more of our outstanding voting
stock) for three years following the time that person becomes a 15% stockholder
unless either:
- before that person became a 15% stockholder, our Board of Directors
approved the transaction in which the person became a 15% stockholder or
approved the business combination;
- upon completion of the transaction that resulted in the stockholder's
becoming a 15% stockholder, the stockholder owns at least 85% of our
voting stock outstanding at the time the transaction began (excluding
stock held by certain employee stock plans and by directors who are also
officers); or
- at or after the time in which that person became a 15% stockholder, the
business combination is approved by our Board of Directors and authorized
at a stockholders meeting by at least 2/3 of the outstanding voting stock
not owned by the 15% stockholder.
Under Section 203, these restrictions also do not apply to certain business
combinations proposed by the 15% stockholder following the disclosure of an
extraordinary transaction with a person who was not a 15% stockholder during the
previous three years or who became a 15% stockholder with the approval of a
majority of our directors. This exception applies only if the extraordinary
transaction is approved or not opposed by a majority of our directors who were
directors before any person became a 15% stockholder in the previous three
years, or successors of these directors.
PREFERRED STOCK
We have 25,000,000 shares of preferred stock authorized, all of which are
undesignated. Our Restated Certificate of Incorporation authorizes our Board of
Directors to issue preferred stock in one or more series and to determine the
voting rights, dividend rights, dividend rates, liquidation preferences,
conversion rights, redemption rights, including sinking fund provisions and
redemption prices, and other terms and rights of each series of preferred stock.
The Board of Directors is authorized, subject to limitations prescribed by
law and the provisions of Article IV of our Restated Certificate of
Incorporation, to provide for the issuance of the shares of Preferred Stock in
series, and by filing a certificate of designations pursuant to the applicable
law of the State of Delaware, to establish from time to time the number of
shares to be included in each such series, and to fix the designation, powers,
preferences and rights of shares of each such series and the qualifications,
limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series
includes, but is not limited to, determination of the following:
- the designation of the series of preferred stock;
- the number of shares of preferred stock offered, the liquidation
preference per share and the offering price of the preferred stock;
- the dividend rate or rates of the shares, the method or methods of
calculating the dividend rate or rates, the date on which dividends, if
declared, will be payable, and whether or not the dividends are to be
cumulative and, if cumulative, the date or dates from which dividends
will be cumulative;
- the amounts payable on shares of the preferred stock in the event of our
voluntary or involuntary liquidation, dissolution or winding up;
- the redemption rights and price or prices, if any, for the shares of
preferred stock;
- any terms and the amount of any sinking fund or analogous fund providing
for the purchase or redemption of the shares of preferred stock;
- any restrictions on our ability to make payments on any of our capital
stock if dividend or other payments are not made on the preferred stock;
12
- any voting rights granted to the holders of the shares of preferred stock
in addition to those required by Delaware law;
- whether the shares of preferred stock will be convertible or exchangeable
into shares of our common stock or any other class of our capital stock,
and, if convertible or exchangeable, the conversion exchange price or
prices, and any other adjustment and other terms and conditions upon
which the conversion exchange shall be made;
- any other rights, preferences, restrictions, limitations or conditions
relative to the shares of preferred stock permitted by Delaware law or
our Restated Certificate of Incorporation; and
- any listing of the preferred stock on any securities exchange.
Subject to our Restated Certificate of Incorporation and to any limitations
imposed by any then outstanding preferred stock, we may issue additional series
of preferred stock, at any time or from time to time, with such powers,
preferences rights and qualifications, limitations or restrictions as the Board
of Directors determines, and without further action of the stockholders,
including holders of our then outstanding preferred stock, if any.
SELLING SECURITY HOLDERS
In addition to the common stock that Remington may sell for its own
account, shares of our common stock may, from time to time, be sold by the
selling security holders described below. The selling security holders offering
shares of our common stock will be listed in the applicable prospectus
supplement.
No security holder may offer or sell shares of our common stock under this
prospectus unless such security holder has notified us of his or her intention
to sell shares of our common stock and a supplement to this prospectus listing
such security holder has been filed with the SEC or an amendment to the related
registration statement has become effective. We will supplement or amend this
prospectus to include selling security holders upon request and upon the
provision of all required information to us. The selling security holders may
offer and sell, from time to time, any of the shares issued to them whether upon
conversion of the notes, or, in the case of S-Sixteen Limited Partnership or its
transferee, upon exercise of the warrants. Because the selling security holders
may offer all or only some portion of the shares of common stock listed in the
table, we make no estimate as to the amount or percentage of these securities
that will be held by the selling security holders upon termination of the
offering.
The table in each applicable prospectus supplement with respect to selling
security holders will list:
- the name of each selling security holder which has provided us
information to the date of the applicable prospectus supplement;
- the number of shares of common stock or common stock equivalent
beneficially owned by the security holder before the offering; and
- the number of shares of common stock being offered for sale by that
selling security holder.
We will obtain the information in the table in each applicable prospectus
supplement from the selling security holders identified in that table. Unless
otherwise disclosed in the footnotes to the table, no selling security holder
will have indicated that it has held any position, office or other material
relationship with us or our affiliates during the three years prior to the
offering. Except as otherwise indicated in the notes to the applicable table, no
selling security holder will own in excess of one percent of any shares of
common stock once the shares offered hereby are sold.
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HOLDERS OF 8 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2002
In December of 1992, we issued 8 1/4% Convertible Subordinated Notes Due
2002 in an original aggregate principal amount of $55,077,000. Because of
provisions in the Indenture governing the notes requiring us to offer to buy
back the notes in the event of a change in control of our Company, the aggregate
principal of the notes currently outstanding is $5,880,000. We have the ability
to redeem the notes in whole or in part at our option at any time at prices
expressed as percentages of the principal amount, together in each case with
accrued and unpaid interest to the date fixed for redemption. We can redeem the
notes as of December 1, 2000, at 101.650% of the principal amount of the notes
plus accrued and unpaid interest, and as of December 1, 2001, at 100.825% of the
principal amount of the notes plus accrued and unpaid interest.
The holder of any note has the right to convert the principal amount of the
note into our common stock at the conversion price of $11.00 of principal amount
of notes per share of common stock. No payment of interest will be made upon
conversion of any note and the noteholder will lose any right to payment of
interest on the notes surrendered for conversion. We have the ability to
decrease the conversion price of the notes but at this time we have no intention
of doing so.
The following discussion regarding the federal income tax consequences of
conversion of the notes is general. A holder of the notes should seek
independent advice as to the tax consequences as to that particular holder. In
general, no gain or loss should be recognized for federal income tax purposes
upon the conversion of a note into our common stock except to the extent that
cash is received in lieu of fractional shares, and the holder of a note
converted to common stock should have a carry over basis in such shares, and the
holding period of the common stock should include the holding period of the
note.
The payment of the principal of and premium, if any, and interest on the
notes is subordinate to the prior payment in full of all senior indebtedness
which generally consists of money borrowed by the Company evidenced by notes or
other debt instruments, obligations under lease agreements for both real and
personal property, obligations of the Company under letters of credit or surety
bonds and obligations of the Company incurred in the ordinary course of
business. Senior indebtedness does not include indebtedness to our subsidiaries.
There are no restrictions against our creating indebtedness senior to the notes.
HOLDER OF WARRANTS
As part of the merger between us and S-Sixteen Holding Company in December
of 1998, we granted S-Sixteen Limited Partnership, the then-controlling entity
of S-Sixteen Holding Company, warrants to purchase a total of up to 300,000
shares of our common stock at prices ranging from $7.00 a share to $11.00 a
share. Warrants representing the right to purchase 100,000 of these shares at
$7.00 per share have expired. Still outstanding are warrants to purchase 100,000
shares at $9.00 per share and warrants to purchase 100,000 shares at $11.00 per
share. Under the terms of the Warrant Agreement governing the warrants, the
warrant holders have requested that we register the shares subject to the
warrants and include them in this prospectus and any applicable prospectus
supplement. S-Sixteen Limited Partnership is controlled by J.R. Simplot of
Boise, Idaho, who together with other Simplot controlled entities beneficially
owns 5,831,028 shares of our common stock representing 27% of the common stock
currently outstanding.
PLAN OF DISTRIBUTION
We may sell the common stock:
- through underwriters or dealers as named in the applicable prospectus
supplement,
- directly or through agents to investors or to institutional purchasers,
or
- through a combination of these two methods of sale.
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The prospectus supplement relating to any offering of the securities will
set forth the offering terms, including the name or names of any underwriters,
dealers or agents, the purchase price of the common stock and the net proceeds
to us of such sale, any underwriting discounts, commissions or other items
constituting discounts, commissions or other items allowed or reallowed or paid
to dealers.
If underwriters are used in the sale, they will acquire the common stock
for their own account and may resell the common stock from time to time in one
or more transactions at a fixed price or prices that are subject to change, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The common stock may be
offered to the public either through underwriting syndicates represented by one
or more managing underwriters or directly by one or more underwriting firms.
Unless otherwise set forth in the applicable prospectus supplement, the
obligations of the underwriters to purchase the common stock will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all of the offered common stock if any are purchased. Any initial public
offering price and any underwriting discounts, commissions or other items
constituting underwriters' compensation may be changed from time to time.
If a dealer is utilized in the sale of any shares of common stock, we will
sell those shares to the dealer, as principal. The dealer may then resell those
shares to the public at varying prices to be determined by the dealer at the
time of resale.
We may sell common stock directly to investors or one or more institutional
purchasers, or through agents at a fixed price or prices, which may be changed,
or at varying prices determined at the time of sale. Unless otherwise indicated
in the applicable prospectus supplement, any agent will be acting on a best
efforts basis for the period of its appointment.
If so indicated in the applicable prospectus supplement, we will authorize
underwriters, dealers or agents to solicit offers from certain specified
purchasers to purchase the common stock from us at the public offering price set
forth in the prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. These
contracts will be subject only to those conditions set forth in the prospectus
supplement, and the prospectus supplement will set forth the commission payable
for solicitation of these contracts. The underwriters soliciting these contracts
will have no responsibility for the validity or performance of any such
contracts.
The common stock offered pursuant to this prospectus and any prospectus
supplement will be listed on the Nasdaq National Market, subject to official
notice of issuance. Any underwriters to whom we sell the common stock for public
offering and sale may make a market in the common stock, but the underwriters
will not be obligated to do so and may discontinue any market making activities
at any time without notice. We cannot assure you that there will be an active
trading market for our common stock.
In connection with the distribution of the common stock, we may enter into
hedging transactions with broker-dealers through which those broker-dealers may
sell the common stock registered hereunder in the course of hedging, through
short sales, the positions they assume with us.
We may enter into agreements with any agents and underwriters who
participate in the distribution of the common stock to reimburse them for
certain expenses, to provide contribution to payments they may be required to
make in any distribution, and to indemnify them against certain civil
liabilities, including liabilities under the Securities Act of 1933.
Certain agents and underwriters and their associates may engage in
transactions with, or perform services for us in the ordinary course of
business.
LEGAL MATTERS
Unless otherwise specified in a prospectus supplement relating to the
Securities, certain legal matters with respect to the validity of the Securities
will be passed upon for us by Andrews & Kurth L.L.P., Dallas, Texas, and for the
underwriters, if any, by counsel to be named in the appropriate prospectus
supplement.
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EXPERTS
The consolidated financial statements incorporated by reference to the
Remington Oil and Gas Corporation Form 10-K for the year ended December 31,
2000, have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report with respect thereto and included herein in
reliance upon the authority of said firm as experts in accounting and auditing.
RESERVE ENGINEERS
We have derived the estimates of proved oil and gas reserves and related
future net revenues and the present value thereof as of December 31, 2000, 1999
and 1998, included in Remington's Annual Report on Form 10-K for the year ended
December 31, 2000, from the reserve reports of Netherland, Sewell & Associates,
Inc. and Miller and Lents, Ltd., our independent reserve engineers. We have
incorporated all of that information by reference herein on the authority of
Netherland, Sewell & Associates, Inc. and Miller and Lents, Ltd. as experts in
such matters.
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[REMINGTON O&G LOGO]
3,000,000 SHARES
COMMON STOCK
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PROSPECTUS SUPPLEMENT
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JEFFERIES & COMPANY, INC.
MARCH 22, 2002