axasmerger8k.htm
UNITED
STATES
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
July
17, 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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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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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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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.
Amended
and Restated Merger Agreement
On July
17, 2009, Abraxas Petroleum Corporation (NASDAQ:AXAS) (“Abraxas
Petroleum”), Abraxas Energy Partners, L.P. (“Abraxas Energy”) and, from and
after its accession to the agreement, the Delaware limited liability company to
be formed as a wholly-owned subsidiary of Abraxas (“Merger Sub”), entered into
an Amended and Restated Agreement and Plan of Merger (the “A/R Merger
Agreement”), pursuant to which Abraxas Energy will, subject to the terms and
conditions of the A/R Merger Agreement, merge with and into Merger Sub, with
Merger Sub surviving and continuing as a wholly-owned subsidiary of Abraxas
Petroleum (the “Merger”).
As of
July 17, 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 A/R 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 A/R
Merger Agreement contains (a) customary representations and warranties of
Abraxas Petroleum, Abraxas Energy and Merger Sub; (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 A/R Merger Agreement,
including, among others, (1) the approval of 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, (2) 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, (3) 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, (4) 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 A/R Merger Agreement
and adopted a resolution recommending adoption of the LTIP Amendment and
approval of the Stock Issuance by the Abraxas Petroleum
stockholders.
The
foregoing description of the Merger and the A/R Merger Agreement does not
purport to be complete and is qualified in its entirety by reference to the A/R
Merger Agreement, which is attached hereto as Exhibit 2.1, and is incorporated
into this report by reference.
The above
description of the A/R Merger Agreement and the copy of the A/R 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 A/R 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.
Amended
Voting Agreement
Concurrently
with the execution of the A/R Merger Agreement, in order to induce Abraxas
Petroleum and Abraxas Energy to enter into the A/R Merger Agreement, certain
limited partners of Abraxas Energy entered into Amendment No. 1 to Voting,
Registration Rights and Lock-Up Agreement (the “Amended Voting Agreement”) with
Abraxas Petroleum and Abraxas Energy.
The
Amended Voting Agreement provides, among other things, that all of the limited
partners that are party to the Amended 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 A/R 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
Amended 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 Amended 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 Amended 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 Amended Voting Agreement does not purport to be
complete and is qualified in its entirety by reference to the Amended Voting
Agreement, which is attached hereto as Exhibit 10.1, and is incorporated into
this report by reference.
The above
description of the Amended Voting Agreement and the copy of the Amended 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 Amended 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.
******
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
definitive proxy statement and other documents regarding the merger with the
SEC. Abraxas Petroleum
stockholders are urged to read the definitive proxy statement when it becomes
available because it will contain important information. Stockholders may
obtain a copy of the definitive 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
9.01 Exhibits.
Exhibit
Number Description
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2.1
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Amended
and Restated Agreement and Plan of Merger, dated as of July 17, 2009, by
and among Abraxas Petroleum, Abraxas Energy and Merger
Sub.
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10.1
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Amendment
No. 1 to Voting, Registration Rights and Lock-Up Agreement, dated as of
July 17, 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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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
21, 2009