mergerdefa14a.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
June
30, 2009
Date of
Report (Date of earliest event reported)
ABRAXAS
PETROLEUM CORPORATION
(Exact
name of registrant as specified in its charter)
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Nevada
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1-16071
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74-2584033
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification Number)
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18803 Meisner
Drive
San Antonio,
Texas 78258
(210)
490-4788
(Address
of principal executive offices and Registrant’s telephone number, including area
code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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| x |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01 Entry
into a Material Definitive Agreement.
Merger
Agreement
On June
30, 2009, Abraxas Petroleum Corporation (NASDAQ:AXAS) (“Abraxas
Petroleum”) and Abraxas Energy Partners, L.P. (“Abraxas Energy”) entered into an
Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Abraxas
Energy will, subject to the terms and conditions of the Merger Agreement, merge
with and into Abraxas Petroleum, with Abraxas Petroleum continuing as the
surviving company (the “Merger”).
As of
June 30, 2009, Abraxas Petroleum and its subsidiaries beneficially own, within
the meaning of Rule 13d-3 of the U.S. Securities and Exchange Act of 1934, as
amended, 5,350,598 common units of Abraxas Energy, representing approximately
46.7% of the outstanding Abraxas Energy common units (the “Abraxas Energy Common
Units”).
Subject
to the terms and conditions of the Merger Agreement, if and when the Merger is
completed, each outstanding Abraxas Energy Common Unit, other than treasury
units and Abraxas Energy Common Units owned by Abraxas Petroleum and its
subsidiaries, will be canceled and converted into the right to receive the
number of shares of Abraxas Petroleum common stock determined by dividing (i)
$6.00 by (ii) the average volume weighted average price for the Abraxas
Petroleum common stock as reported on NASDAQ for the twenty consecutive trading
days ending on the third business day preceding the date of the meeting of the
Abraxas Petroleum stockholders held to approve the Merger (the “Exchange
Ratio”); provided, however, that in no event shall the Exchange Ratio be less
than 4.25 or greater than 6.
In
addition, as of the consummation of the Merger, each outstanding restricted unit
and phantom unit of Abraxas Energy will be converted into an equivalent number
of shares of restricted stock of Abraxas Petroleum and each unit option of
Abraxas Energy which was to be issued upon the completion of the initial public
offering of Abraxas Energy will become a stock option of Abraxas Petroleum, with
adjustments in the number of shares and exercise price to reflect the Exchange
Ratio, but otherwise on substantially the same terms and conditions as were
applicable prior to the Merger. The exercise price of the Abraxas
Petroleum stock options will be the closing price of the Abraxas Petroleum
common stock on the date the Merger closes.
The
Merger Agreement contains (a) customary representations and warranties of
Abraxas Petroleum and Abraxas Energy; (b) covenants of Abraxas Petroleum and
Abraxas Energy to conduct their respective businesses in the ordinary course
until the Merger is completed; and (c) covenants of Abraxas Petroleum and
Abraxas Energy not to take certain actions during such period, including
prohibitions on the declaration or payment of dividends and
distributions.
Consummation
of the Merger is subject to conditions set forth in the Merger Agreement,
including, among others, (1) the approval of the Merger by the affirmative vote
of the holders of 80% of the outstanding Abraxas Energy Common Units, (2) the
approval of the Merger and the issuance of Abraxas Petroleum common stock in the
Merger (the “Stock Issuance”) by the affirmative vote of the holders of a
majority of the Abraxas Petroleum common stock voting at a stockholders’
meeting, (3) the approval of an amendment to the Abraxas Petroleum 2005
Long-Term Equity Incentive Plan to increase the number of authorized shares for
issuance under the plan (the “LTIP Amendment”) by the affirmative vote of the
holders of a majority of the outstanding Abraxas Petroleum common stock voting
at a stockholders’ meeting, (4) the receipt by Abraxas Petroleum of financing
that is sufficient to consummate the Merger and repay all indebtedness
outstanding under Abraxas Energy’s credit agreement and subordinated credit
agreement, and, (5) certain other customary closing
conditions.
The board
of directors of Abraxas Petroleum and a special committee comprised entirely of
independent Abraxas Petroleum directors have approved the Merger Agreement and
adopted a resolution recommending adoption of the LTIP Amendment and approval of
the Merger and Stock Issuance by the Abraxas Petroleum
stockholders.
The
foregoing description of the Merger and the Merger Agreement does not purport to
be complete and is qualified in its entirety by reference to the Merger
Agreement, which is attached hereto as Exhibit 2.1, and is incorporated into
this report by reference.
The above
description of the Merger Agreement and the copy of the Merger Agreement
attached hereto have been included to provide investors and security holders
with information regarding its terms. It is not intended to provide any other
factual information about the parties or their respective subsidiaries and
affiliates. The Merger Agreement contains representations and warranties made by
and to the parties thereto as of specific dates. The statements embodied in
those representations and warranties were made for purposes of that contract
between the parties and are subject to qualifications and limitations agreed to
by the parties in connection with negotiating the terms of that contract. In
addition, certain representations and warranties were made as of a specified
date, may be subject to a contractual standard of materiality different from
those generally applicable to investors, or may have been used for the purpose
of allocating risk between the parties rather than establishing matters as
facts.
Voting
Agreement
Concurrently
with the execution of the Merger Agreement, in order to induce Abraxas Petroleum
and Abraxas Energy to enter into the Merger Agreement, certain limited partners
of Abraxas Energy entered into the Voting, Registration Rights and Lock-Up
Agreement (the “Voting Agreement”) with Abraxas Petroleum and Abraxas
Energy.
The
Voting Agreement provides, among other things, that all of the limited partners
that are party to the Voting Agreement will:
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vote
all of their outstanding common units of Abraxas Energy in favor of the
Merger;
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vote
against any other merger agreement, consolidation, combination, sale of
substantial assets or similar
transaction;
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grant
an irrevocable proxy to Abraxas Petroleum to vote all of their common
units of Abraxas Energy in favor of the Merger Agreement and against any
other transaction;
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agree
to not, directly or indirectly, transfer any of such limited partners
common units of Abraxas Energy to any person (other than an affiliate of
such limited partner who agrees to be bound by the terms of this
agreement) other than pursuant to the
Merger;
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not
directly, or indirectly permit any person on behalf of such limited
partner, to effect any transactions in the securities of Abraxas
Petroleum;
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not
transfer any of the shares of Abraxas Petroleum common stock received by
such limited partner in the Merger (the “Merger Shares”) for 90
days after the effective time of the Merger (the “Effective Time”)
followed by a staggered lock-up period for the shares of Abraxas Petroleum
common stock issued in the Merger;
and
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not
exercise any of its rights or take any action under the Exchange and
Registration Rights Agreement, dated as of May 25, 2007, as amended, by
and among Abraxas Petroleum, Abraxas Energy and the limited partners
signatories thereto.
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The
Voting Agreement provides, among other things, that Abraxas Petroleum and
Abraxas Energy will
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not
file any further amendments to the registration statement on Form S-1
(No. 333-144537) relating to the initial public offering of the
common units of Abraxas Energy; and
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at
the Effective Time increase the size of the Board of Directors of Abraxas
Petroleum by two members and elect Ed Russell and Brian Melton to serve on
the Board of Directors.
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In
addition, under the Voting Agreement, Abraxas Petroleum agreed to file with the
SEC a registration statement on Form S-3 or such other successor form, no later
than 120 days following the Effective Time to enable the resale of the Merger
Shares by the limited partners party to the Voting Agreement and shall use its
commercially reasonable efforts to cause the Registration Statement to become
effective. Abraxas Petroleum also granted such limited partners the
right to demand that Abraxas Petroleum conduct an underwritten offering and to
participate in certain Abraxas offerings.
The
foregoing description of the Voting Agreement does not purport to be complete
and is qualified in its entirety by reference to the Voting Agreement, which is
attached hereto as Exhibit 10.1, and is incorporated into this report by
reference.
The above
description of the Voting Agreement and the copy of the Voting Agreement
attached hereto have been included to provide investors and security holders
with information regarding its terms. It is not intended to provide any other
factual information about the parties or their respective subsidiaries and
affiliates. The Voting Agreement contains representations and warranties made by
and to the parties thereto as of specific dates. The statements embodied in
those representations and warranties were made for purposes of that contract
between the parties and are subject to qualifications and limitations agreed to
by the parties in connection with negotiating the terms of that
contract. In addition, certain representations and warranties were
made as of a specified date, may be subject to a contractual standard of
materiality different from those generally applicable to investors, or may have
been used for the purpose of allocating risk between the parties rather than
establishing matters as facts.
Amendments
to the Credit Agreements
On June
30, 2009, Abraxas Energy entered into Amendment No. 4 to the Amended and
Restated Credit Agreement, dated as of January 31, 2008, by and among Abraxas
Energy, the lenders party thereto and Société Générale, as Administrative
Agent, as amended (the “Credit Agreement”) and Amendment No. 4 to the
Subordinated Credit Agreement dated as of January 31, 2008, by and among Abraxas
Energy, the lenders party thereto and Société Générale, as Administrative
Agent, as amended (the “Subordinated Credit
Agreement”). Pursuant to these amendments, among other things, the
maturity date of the Subordinated Credit Agreement was extended to August 14,
2009.
******
Cautionary Note Regarding
Forward-Looking Statements
Statements
in this current report looking forward in time involve known and unknown risks
and uncertainties, which may cause Abraxas’ actual results in future periods to
be materially different from any future performance suggested in this current
report. Such factors may include, but may not be necessarily limited to, changes
in the prices received by Abraxas for its crude oil and natural gas. In
addition, Abraxas’ future crude oil and natural gas production is highly
dependent upon Abraxas’ level of success in acquiring or finding
additional reserves. Further, Abraxas operates in an industry sector
where the
value of
securities is highly volatile and may be influenced by economic and other
factors beyond Abraxas’ control. In the context of forward-looking information
provided for in this current report, reference is made to the discussion of risk
factors detailed in Abraxas’ filings with the SEC during the past 12
months.
Where to Find Information
About the Merger
In order
to effectuate the vote of its stockholders, Abraxas Petroleum will file a proxy
statement and other documents regarding the merger with the SEC. Abraxas Petroleum stockholders are
urged to read the proxy statement when it becomes available because it will
contain important information. Stockholders may obtain a copy of the
proxy statement when it becomes available and any other relevant documents with
the SEC for free on the SEC’s website, www.sec.gov. They may also obtain copies
from Abraxas Petroleum Investor Relations at 18803 Meisner Drive, San Antonio,
Texas 78258.
Participants in the Proxy
Solicitation
Abraxas
Petroleum and its directors and executive officers may be deemed to be
participants in the solicitation of proxies of Abraxas Petroleum stockholders in
connection with the Merger. Such individuals may have interests in the Merger.
Current detailed information about the affiliations and interests of the
participants in the solicitation by ownership or otherwise, can be found in the
proxy statement relating to Abraxas Petroleum’s 2009 Annual Meeting of
Stockholders that was filed on April 20, 2009, and in Abraxas Petroleum’s Annual
Report on Form 10-K filed on February 24, 2009 and in any proxy statement that
will be filed with the SEC in connection with the merger.
This
document shall not constitute an offer to sell or the solicitation of an offer
to buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S. Securities Act of
1933, as amended.
Item
8.01 Other
Events.
On June
30, 2009, the Company issued a press release announcing the execution of the
Merger Agreement and the Voting Agreement and the amendments to Abraxas Energy’s
credit agreements. The text of the press release, which is attached hereto as
Exhibit 99.1, is incorporated herein by reference.
Item
9.01 Exhibits.
Exhibit
Number Description
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2.1
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Agreement
and Plan of Merger, dated as of June 30, 2009, by and among Abraxas
Petroleum and Abraxas Energy.
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10.1
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Voting,
Registration Rights and Lock-Up Agreement, dated as of June 30, 2009, by
and among Abraxas Petroleum, Abraxas Energy and certain limited partners
of Abraxas Energy. Schedules and exhibits to the Agreement have
been omitted pursuant to Item 601(b)(2) of Regulation S-K. The
Company agrees to furnish a copy of any omitted schedule or similar
attachment to the SEC
upon request.
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10.2
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Amendment
No. 4 to the Amended and Restated Credit Agreement dated as of January 31,
2008, by and among Abraxas Energy, the lenders party thereto and Société Générale, as
Administrative Agent, as
amended.
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10.3
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Amendment
No. 4 to the Subordinated Credit Agreement dated as of January 31, 2008,
by and among Abraxas Energy, the lenders party thereto and Société Générale, as
Administrative Agent, as
amended.
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99.1
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Press
Release, dated June 30, 2009, announcing the execution of the Merger
Agreement and the Voting Agreement and the amendments to Abraxas Energy’s
credit agreements.
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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.
ABRAXAS
PETROLEUM CORPORATION
By: /s/
Chris E.
Williford
Chris E.
Williford
Executive
Vice President, Chief Financial
Officer
and Treasurer
Dated: July
2, 2009