e8vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 11, 2010
The Meridian Resource Corporation
(Exact Name of Registrant as Specified in Charter)
|
|
|
|
|
Texas
|
|
1-10671
|
|
76-0319553 |
(State or Other Jurisdiction
|
|
(Commission File Number)
|
|
(IRS Employer |
of Incorporation)
|
|
|
|
Identification No.) |
1401 Enclave Parkway, Suite 300
Houston, Texas 77077
(Address of Principal Executive Offices) (Zip Code)
281-597-7000
(Registrants telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2 below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
þ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Agreement with Shell Oil Company
As previously reported, over the last several years, claims have been advanced by various
landowners and/or regulators against The Meridian Resource Corporation (the Company) (along with
numerous other oil companies) concerning several fields in which the Company has had operations.
In these claims the landowners, or regulators, seek, or have sought, through litigation injunctive
and other relief, including unspecified amounts in both actual and punitive damages, for alleged
breaches of mineral leases and alleged failure to restore the plaintiffs lands from alleged
contamination and otherwise from the Companys oil and natural gas operations. The Company
originally acquired these fields from Shell Oil Company and SWEPI LP (together, Shell) in the
late 1990s pursuant to two acquisition agreements. Landowners and/or regulators have also advanced
similar claims against Shell concerning these fields and Shell has demanded contractual indemnity
and defense from the Company based upon the terms of the two acquisition agreements. On December
9, 2008 Shell sent the Company a letter reiterating its demand for indemnity and initiated formal
arbitration proceedings on May 11, 2009.
On January 11, 2010, the Company and Shell entered into a Compromise and Settlement Agreement (the
Settlement Agreement) regarding the Shell indemnity claims under the two acquisition agreements
related to the fields. Under the terms of the Settlement Agreement, the Company will (a) make a
cash payment to Shell of $5 million in five annual payments of $1 million each, the first $1
million payment being payable upon the earlier of April 1, 2010 or the closing of a sale of the
assets or equity interest in the Company to a third party (the transactions contemplated by the
previously disclosed Agreement and Plan of Merger (the Merger Agreement), dated as of December
22, 2009, among the Company, Alta Mesa Holdings, LP (Alta Mesa) and Alta Mesa Acquisition Sub,
LLC (the Merger) qualifies as such a sale transaction), with subsequent annual installments of $1
million to be made on January 4 of each of the following four years; (b) convey to Shell certain
acreage in Terrebonne Parish, Louisiana, which acreage is nonproducing and which has no Company oil
or gas reserves associated with it; (c) plug and abandon certain wells and remediate certain
acreage located in Louisiana in due course; and (d) release Shell from indemnity claims under the
two acquisition agreements related to the fields. In consideration for the foregoing, Shell agreed
to release the Company from any indemnity claim arising from any current or historical claim
against Shell, and to release Meridians indemnity obligation with respect to any future claim on
all but a small subset of the properties acquired pursuant to the acquisition agreements related to
the fields. The releases of claims become effective upon the initial $1 million cash payment to
Shell and the conveyance to Shell of the Terrebonne Parish acreage, which are expected to occur at
the closing of the Merger.
The execution of the Settlement Agreement is a condition to the closing of the Merger.
Forbearance and Amendment Agreement
In connection with the execution of the Merger Agreement, on December 22, 2009, the Company and
certain of its subsidiaries entered into the Eleventh Amendment to Forbearance and Amendment
Agreement (the Eleventh Forbearance Amendment), which amended the Forbearance and Amendment
Agreement with Fortis Capital Corp., as administrative agent, and the other lenders (collectively,
the Lenders) and agents party to the Companys Amended and Restated Credit Agreement, dated as of
December 23, 2004, as amended by the First Amendment to Credit Agreement dated as of February 25,
2008, and further amended by the Second Amendment to Credit Agreement dated as of December 19,
2008. Among other things, the Eleventh Forbearance Amendment provided that forbearance was
1
conditioned on the Company having filed with the Securities and Exchange Commission by January 15,
2010 the Companys proxy statement with respect to the Merger. On January 13, 2010, the Lenders
agreed to extend that deadline to January 22, 2010.
Additional Information Regarding the Merger and Where to Find It
The proposed Merger will be submitted to the Companys shareholders for their consideration, and
the Company will file a proxy statement to be used to solicit shareholder approval of the proposed
Merger, as well as other relevant documents concerning the proposed Merger with the SEC. The
Companys shareholders are urged to read the proxy statement regarding the proposed Merger when it
becomes available and any other relevant documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important information. You will be able
to obtain a free copy of the proxy statement, as well as other filings with the SEC containing
information about the Company, at the SECs website at www.sec.gov. Copies of the proxy statement
can also be obtained, when available, without charge, by directing a request to The Meridian
Resource Corporation, Investor Relations, 1401 Enclave Parkway, Suite 300, Houston, Texas 77077 or
at the Companys Investor Relations page on its corporate website at www.tmrx.com.
Participant Information
The Company and its directors and executive officers may be deemed to be participants in the
solicitation of proxies from the Companys shareholders in connection with the proposed Merger.
Certain information regarding the participants and their interests in the solicitation is set forth
in the Form 10-K filed by the Company with the SEC on March 16, 2009, and amended on Form 10-K/A on
April 30, 2009, both of which are available free of charge from the SEC and the Company at their
websites as indicated above. Information regarding the interests of these persons in the
solicitation will be more specifically set forth in the proxy statement concerning the proposed
Merger that will be filed by the Company with the SEC and which will be available free of charge
from the SEC and the Company at their websites, as indicated above.
Forward-Looking Statements
Statements identified by the words expects, plans, and certain of the other foregoing
statements may be deemed forward-looking statements. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, these statements involve
risks and uncertainties regarding the transactions described that may cause actual future
activities and results to be materially different from those suggested or described in this report.
Risks and uncertainties regarding the transactions include the possibility that the closing of the
Merger does not occur, either due to the failure of closing conditions, including the approval of
the shareholders of the Company, rights of the parties to terminate the merger agreement, or other
reasons, risks that the Merger disrupts current plans and operations and the potential difficulties
in employee retention as a result of the Merger, the outcome of legal proceedings that have been,
or may be, initiated against the Company related to the Merger and the amount of the costs, fees,
expenses and charges related to the Merger. Other risks relating to the Company are described in
the Companys documents and reports, available from the U.S. Securities and Exchange Commission,
including the report filed on Form 10-K, as amended, for the year ended December 31, 2008 and any
updates to those factors set forth in our subsequent Quarterly Reports on Form 10-Q, including
risks associated with our default under our credit facility and other lending arrangements.
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
The Meridian Resource Corporation
(Registrant)
|
|
|
By: |
/s/ Lloyd V. DeLano
|
|
|
|
Lloyd V. DeLano |
|
|
|
Senior Vice President
and Chief Accounting Officer |
|
|
Date: January 14, 2010
3