Attached files
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: July 15, 2010
SUN RIVER ENERGY, INC.
(Exact name of registrant as specified in its charter)
Colorado 000-27485 84-1491159
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(State or other jurisdiction of (Commission File (IRS Employer Identification
incorporation) Number) Number)
1410 High Street, Denver, Colorado 80218
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(Address of Principal Executive Offices) (Zip Code)
(800)669-6511
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Registrant's telephone number, including area code
(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:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
On July 14, 2010, Sun River Energy, Inc. ("the Company") entered into a Share
Purchase Agreement to acquire PC Operating Texas Inc. and an Acquisition
Agreement for certain oil and gas well interests and mineral leasehold interests
from FTP Oil & Gas LP. Both Agreements have an effective date of August 1, 2010.
PC Operating Texas Inc. - Acquisition
PC Operating Texas Inc. ("PC Operating") is a Texas Corporation and holds the
assets required to conduct oil and gas operations. The Share Purchase Agreement
provides for the Company to issue 250,000 shares of its restricted common stock
to the shareholders of PC Operating in exchange for all of the issued and
outstanding common stock of PC Operating.
PC Operating Texas Inc. is a full service oil & gas operating company in Dallas
Texas that has assembled a complete staff of land management, accounting and
engineering personnel.
FTP Oil & Gas LP
FTP Oil & Gas LP ("FTP") owns certain wells and mineral leases in Tom Green
County, Texas, as described further below. The Acquisition Agreement provides
for the Company to issue 1,388,000 shares its restricted common stock and a
convertible note in the amount of $1,000,000.00 with a term of one year to
Messrs. Donal Schmidt and Tim Wafford, the members and managers of FTP.
The acquisition includes 2,148 gross acres (1,610 net acres) in Tom Green
County, Texas. The acreage includes four prospects developed by industry partner
Fairchild Petroleum of Midland, Texas. Two wells have been drilled on the
prospect acreage by the operator PC Operating LLC of Dallas, Texas.
The Stansberry # 1 well, drilled to a total depth of 5,507', has been
completed in the Harkey Sand at 4,780' to 4,784'. The well has 1,650
psi shut in tubing pressure and is awaiting a pipeline connection.
The Lora # 1 well was drilled to a total depth of 4,807'. The well
remains shut in awaiting completion attempts in the 3,200' sands. The
nearby Christoval North Field averages over 100,000 barrels of oil per
well from this zone.
Sun River is acquiring a 39% working interest and a 29.25% net revenue interest
in both wells and will operate. Field spacing rules allow for an additional 51
development wells on the prospect acreage.
Consulting Agreement
Effective July 15, 2010, the Company extended the existing Consulting Agreement
with Cicerone Corporate Development, LLC ("Cicerone") for three years. The
Consulting Agreement provides for Cicerone to be issued 20,000 shares of
restricted common stock and a warrant exercisable for 20,000 shares of common
stock with an exercise price set at the closing market price at the end of each
month.
Finder's Fee Agreement
On July 14, 2010, the Company entered into a Finder's Fee Agreement with Delaney
Equity Group, LLC, for the purpose of raising capital. It is anticipated the
Company will seek up to $30,000,000.00 in a combination of debt and equity
financing.
Section 2 - Financial Information
Item 2.03 Creation of a Direct Financial Obligation
On July 8, 2010, the Company issued to J.H. Brech, LLC, a Commercial Promissory
Note ("the Promissory Note") for One Hundred and Forty-Eight Thousand, Eight
Hundred and Sixty-One Dollars and Thirty Cents ($148,861.30). The Promissory
Note is unsecured, due on demand, bears a 4% per annum interest rate and
provides for a conversion into shares of the Company's common stock at $1.65 per
share.
Section 3 - Securities and Trading Markets
Item 3.02 Unregistered Sales of Equity Securities.
On June 30, 2010, the Company issued Cicerone 20,000 shares of the Company's
restricted common stock for its services under its Consulting Agreement for the
month ending July 31, 2010.
On June 30, 2010, the Company issued Cicerone a warrant for June 30, 2010
exercisable for 20,000 shares of the Company's restricted common stock, as set
forth in the Consulting Agreement. That such warrant when issued will have a
term of 2 years. In addition, such warrant will have an exercise price to be set
at $1.65 per share, the closing market price of the Company's common stock on
June 30, 2010 and will allow for a cashless exercise.
Section 5 - Corporate Governance and Management
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As a result of the Share Purchase Agreement with PC Operating and the
Acquisition Agreement of the FTP well interests, various members of the
Company's management will be realigned to a regional focus of the Rockies and
Texas, which expands the areas of interest contingent upon the closing of the
agreements discussed above.
Contingent upon the closing of the above transactions, on August 1, 2010, Donal
Schmidt and Robert B. Fields will be appointed directors of the Company.
The resignations of, Jay Leaver as President, Redgie Green as Chief Executive
Officer (CEO)and Joe Kelloff as Chief Operating Officer (COO) are effective
August 1, 2010, contingent upon the closing of the transactions, with FTP and PC
Operating Texas Inc.
Contingent upon the closing of the above transactions, on August 1, 2010, Donal
Schmidt will be appointed CEO and Tim Wafford will be appointed COO of the
Company.
Messrs. Schmidt and Wafford are members and managers of FTP Oil & Gas LLC, and
officers, directors and shareholders of PC Operating Texas Inc, which are
subject of the Share Purchase and Acquisition Agreements described above.
As part of their appointments as officers, Messrs. Schmidt and Wafford have
entered into employment agreements with the Company effective August 1, 2010.
Such employment agreements are contingent upon the closing of the above
transactions.
Biographical information for Messrs. Schmidt, Wafford and Fields are provided
below.
Donal R. Schmidt, Jr. (49) - Proposed President/CEO and Anticipated Chairman
For the last 11 years, Mr. Schmidt has been an independent oil and gas producer.
Currently, Mr. Schmidt is managing member of FTP Oil and Gas I LLC, the General
Partner of FTP Oil and Gas LP. FTP is a limited partnership formed for the
acquisition of leases in the Permian Basin located in West Texas. Mr. Schmidt is
also the Managing Director of PC Operating Texas Inc. which conducts drilling
and operations for FTP and other working interest partners. From 2005 until
2008, Mr. Schmidt was Chairman of the Board of Directors, President, Chief
Executive Officer, Chief Financial Officer and Director of Dorado Exploration
Inc; Director of Dorado Operating Inc.; and President of the Managing Member of
the General Partner of Dorado Beckville Partners I LP. Dorado Exploration Inc.,
Dorado Operating Inc. and Dorado Beckville I LP each filed for reorganization
under Chapter 11 of the U.S. Bankruptcy Code in the spring of 2008. Through the
approved plans of reorganization for each company all allowed claims were paid
in full. From June 5, 2000 through December 31, 2004, he served as the managing
member of Fredonia East Texas Property Acquisition Co., LLC and Longhorn
Compression, LLC, where Mr. Schmidt was responsible for the land, legal,
accounting, gas
marketing and management of the financial assets of both companies. Fredonia
East Texas Property Acquisition Co., LLC, was a non-operating working interest
holding company and Longhorn Compression, LLC, is a company that owns
compressors used on oil and gas wells.
Mr. Schmidt is a licensed attorney and Certified Public Accountant in the State
of Texas. Prior to forming Dorado he majored in Petroleum Engineering at the
University of Texas at Austin in the early 1980's and was a member of the
varsity football team. He graduated with a B.S. in Mathematics and a minor in
Chemistry from Texas Tech University in 1984. Additionally, he earned both an
M.B.A. in Finance (1988) and M.S. in Accounting (1987) from the University of
Texas at Dallas. In 1987, he joined the Dallas office of KPMG Peat Marwick as an
oil and gas auditor. Mr. Schmidt, a member of law review, graduated from Texas
Wesleyan University School of Law in 1996.
Thimothy S. Wafford (50) - Proposed COO
Mr. Wafford has over 26 years of diversified experience in the oil and gas
industry, and has worked with Mr. Schmidt as an independent oil and gas producer
for the last 11 years. He has also worked as a Petroleum Reservoir Engineer both
domestically and internationally. Mr. Wafford was President of Essex Energy of
Texas, Inc. from August 1, 2000 through May 13, 2003. Essex Energy of Texas,
Inc., an entity in which Mr. Wafford was the sole director, officer and owner,
was an oil and gas operating company that filed a Voluntary Petition of
Bankruptcy under Chapter 7 of the Bankruptcy Code in the Class A United States
Bankruptcy Court in the Northern District of Texas on December 2, 2002. Essex
Energy of Texas was liquidated and discharged from bankruptcy on May 13, 2003.
From December 2002, through the present, Mr. Wafford has been President of
Waterman Oil & Gas, Inc. In these positions, Mr. Wafford was responsible for
acquisitions and divestitures, drilling and completions, production and pipeline
operations, gas gathering, processing and compression. From April 1, 2003
through January 25, 2005, Mr. Wafford was responsible for acquisitions and
divestitures, drilling and completions, production and pipeline operations, gas
gathering, processing and compression with respect to the properties that were
contributed to Dorado Beckville Partners I LP by Mr. Wafford and Mr. Schmidt.
From January 25, 2005 to December 31, 2008, Mr. Wafford served as Chief
Operating Officer and Director of Dorado Exploration Inc.
While attending Texas A&M University from 1980 to 1983, Mr. Wafford was a
student engineer for the independent petroleum reservoir engineers at Tom
Calhous & Associates, primarily responsible for reserve estimates and valuations
of properties in the East Texas Oilfield. Upon graduation from Texas A&M
University in 1984 with a B.S. in Petroleum Engineering, Mr. Wafford served as
Reservoir Engineer for the Oil and Gas Division of the First National Bank,
Longview, Texas. Mr. Wafford returned to graduate school in 1986 and earned both
an M.B.A. Finance and M.S. Accounting from the University of Texas at Dallas in
1988. From 1988 to 1990, Mr. Wafford served as an Oil and Gas Management
Consultant with the Dallas office of Price Waterhouse. From 1990 to 1997, Mr.
Wafford worked in various domestic and international capacities as a petroleum
reservoir engineer. In 1998 began his career as an independent oil and gas
producer.
Robert B. Fields (72) - Proposed Director
From July 27, 2006 to August 6, 2008, Mr. Fields served on the Board of
Directors of Dorado Exploration Inc. Since 2006, Mr. Fields has served as the
managing member of PetroFields LLC, his personal oil and gas investment venture
based in New York. Since February 15, 2001, Mr. Fields has served as the
Chairman of ActForex, Inc., a New York fully hosted management service provider
of proprietary software for currency trading. Since April 2008, Mr. Fields has
served on the board of Sky People Fruit Juice (SPU (on NASDAQ)). On February 8,
2010, Mr. Fields became a director of China Green Agriculture (CGA (on NYSE))
and serves as chairman of the compensation committee and sits on the audit
committee. From June 2005 through the annual shareholder meeting on May 31,
2006, Mr. Fields served on the Board of Directors and as Chairman of the Audit
Committee of Genoil Inc. (OTCBB: GNOLF.OB). From 1999 to 2002, Mr. Fields was
Executive Advisor to Laidlaw Global Corp. (AMEX). In June 2000, Mr. Fields was
appointed to the board of Statmon Technologies, Inc. (OTCBB: STCA) and continues
to serve on that board as well as to serve as Chairman of Statmon's Audit
Committee. From 1997 to 1998, Mr. Fields served as Vice Chairman and, from 1997
to 1999, as a director of Laidlaw Ship Funding Ltd. Mr. Fields recently served
as the President of the Friars National Association Foundation, Inc., a
philanthropy of the arts based in New York, and since 1998 Mr. Fields has held
various officer positions with the organization and is now a Trustee. From 1995
to 1998 he was a director of Hospital Staffing Services, Inc. (NYSE), and prior
to that Mr. Fields also served as President and CEO of L'Express Inc., a New
Orleans based interstate regional airline, EVP of American Finance Group in
Boston, and as a director and on the Audit Committee of Flight International
Group of Newport News, Virginia, a public company. Additionally, Robert Fields
was managing director of Equifund, L.P. Since 1979 he has served as the
President of Tradestar Ltd., his wholly owned consulting firm that specializes
in asset appreciation. Throughout his career, he has been a member of the board
of directors for numerous other public and private entities.
Section 9 - Financial Statements and Exhibits Item
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following is a complete list of exhibits filed as
part of this Report. Exhibit numbers correspond to the numbers in the exhibit
table of Item 601 of Regulation S-K.
Exhibit No. Description
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2.1 Share Purchase Agreement, by and between Sun River Energy, Inc. and PC
Operating LLC, dated July 14, 2010*
2.2 Acquisition Agreement, by and between Sun River Energy, Inc. and FTP
Oil & Gas, LP, dated July 14, 2010*
10.0 Employment Agreement by and between Sun River Energy, Inc. and Donal R
Schmidt.*
10.2 Employment Agreement by and between Sun River Energy, Inc. and
Thimothy Wafford*
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*Filed herewith
SIGNATURES
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.
SUN RIVER ENERGY, INC.
By:/s/Jay Leaver
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President
