As filed with the Securities and Exchange Commission on August 24, 2006.
Registration No. 333-116048
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No.4
To
Form S-1/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Crimson Exploration Inc.
(Exact name of registrant as specified in its charter)
Delaware 1311 20-3037840
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Identification No.)
Classification Code
Number)
E. Joseph Grady
Senior Vice President and Chief
Financial Officer
Crimson Exploration Inc. 480 N. Sam Houston Parkway, Suite 300
480 N. Sam Houston Parkway, Suite 300 Houston, Texas 77060
Houston, Texas 77060 Telephone: (281) 820-1919
(Address, including zip code, and telephone (Name, address, including
number, including zip code, and telephone number, including area code,
area code, of registrant's principal of agent for service)
executive offices)
Copies To:
Julien Smythe
Akin Gump Strauss Hauer & Feld LLP
1111 Louisiana Street, 44th Floor
Houston, Texas 77002
Telephone: (713) 220-5800
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as selling
shareholders may decide.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box.: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering:
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering:
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH A DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell these securities nor does it seek an offer to
buy these securities in any jurisdiction where the offer or sale is not
permitted.
Subject to Completion, Dated August 24, 2006
P R O S P E C T U S
CRIMSON EXPLORATION INC.
15,101,959
Shares of Crimson Exploration Inc. Common Stock
(the "Shares")
This prospectus relates to the resale of up to 15,101,959 Shares issued
or issuable to certain selling shareholders assuming the exercise of
warrants or conversion of certain preferred stock by those shareholders.
This offering is not being underwritten. The selling shareholders have
advised us that they will sell the shares from time to time in the open
market, in privately negotiated transactions or a combination of these
methods at market prices prevailing at the time of sale, at prices related
to the prevailing market prices, at negotiated prices, or otherwise as
described under "Plan of Distribution." We will pay all expenses of
registration incurred in connection with this offering, but the selling
shareholders will pay all of their selling commission, brokerage fees and
related expenses. We will not receive proceeds from the sale of shares by
our shareholders, although we will receive proceeds from the exercise of
our warrants, if and when they are exercised.
Our common stock is traded over-the-counter under the symbol "CXPI". On
August 15, 2006 the average of the high and low bid and asked prices of
our common stock as traded over-the-counter was $ 0.70 per share.
-------------------
Investing in our stock involves a high degree of risk. Please see "Risk
Factors" on page 4 for a discussion of certain factors that you should
consider before investing.
-------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon
the accuracy or adequacy of this prospectus. Any representation to the
contrary is a criminal offense.
The information in this prospectus is not complete and may be changed.
The selling shareholders may not sell or offer these securities until this
registration statement filed with the Securities and Exchange Commission
is effective. This prospectus is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any state where
the offer or sale is not permitted.
The date of this prospectus is , 2006
TABLE OF CONTENTS
PROSPECTUS SUMMARY................................................................................................1
WHERE YOU CAN FIND ADDITIONAL INFORMATION.........................................................................3
RISK FACTORS......................................................................................................4
CAPITALIZATION....................................................................................................5
DIVIDEND POLICY...................................................................................................6
FORWARD-LOOKING STATEMENTS........................................................................................7
MARKET PRICE OF COMMON STOCK......................................................................................8
USE OF PROCEEDS...................................................................................................8
SELLING SHAREHOLDERS..............................................................................................9
PLAN OF DISTRIBUTION.............................................................................................14
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................................................................16
DESCRIPTION OF SECURITIES........................................................................................18
INCORPORATION OF DOCUMENTS BY REFERENCE..........................................................................22
LEGAL MATTERS....................................................................................................23
EXPERTS..........................................................................................................23
-i-
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in
this prospectus. The following summary does not contain all of the information
that may be important. You should read the detailed information appearing
elsewhere in this prospectus before making an investment decision. Certain terms
that we use in our industry are italicized and defined in the "Glossary of
Industry Terms and Abbreviations". Unless otherwise indicated, all references to
"Crimson Exploration", the "Company", "we", "us" and "our" refer to Crimson
Exploration Inc., its predecessor GulfWest Energy Inc. and our subsidiaries.
Our Business
We are primarily engaged in the acquisition, development, exploitation
and production of crude oil and natural gas, primarily in the onshore producing
regions of the United States. Our focus is on increasing production from our
existing properties through further exploitation, development and exploration,
and on acquiring additional interests in undeveloped and underdeveloped crude
oil and natural gas properties.
Since we made our first significant acquisition in 1993, we have
substantially increased our ownership in producing properties and our crude oil
and natural gas reserves through a combination of acquisitions and the further
exploitation and development of our properties. At December 31, 2005, our part
of the estimated proved reserves these properties contained was approximately
2.7 million barrels (MBbl) of oil and 24.7 billion cubic feet (Bcf) of natural
gas with an estimated Net Present Value discounted at 10% (PV-10) of $171.6
million. At present, all of our properties are located on land in Texas,
Colorado, Louisiana and Mississippi, except for the property in the shallow
inland boundaries of Grand Lake, Louisiana. In the future, we plan to expand by
acquiring additional properties in those areas, and in similar properties
located in other producing regions of the United States, including the shallow
waters of the Gulf of Mexico.
Our operations are considered to fall within a single industry segment,
which is the acquisition, development, production and servicing of crude oil and
natural gas properties.
Our Company
We were formed as a corporation under the laws of the State of Utah in
1987 as Gallup Acquisitions, Inc., and subsequently changed our name to First
Preference Fund, Inc. in 1992. We became a Texas corporation by a merger
effected in July 1992, in which our name became GulfWest Oil Company. On May 21,
2001, we changed our name to GulfWest Energy Inc. On June 29, 2005 we became a
Delaware corporation by merger in which our name became Crimson Exploration Inc.
Our common stock is traded over-the-counter (OTC) under the symbol "CXPI".
Our principal office is located at 480 North Sam Houston Parkway East,
Suite 300, Houston, Texas 77060 and our telephone number is (281) 820-1919.
Recent Transactions
Core Merger
On March 22, 2006 we purchased a 100% working interest (75% net revenue
interest) in leases on approximately 22,000 undeveloped acres in Culberson
County, Texas. The acreage, believed to contain producible reserves in the
Barnett Shale and Atoka formations, was acquired through our acquisition, by
merger, of Core Natural Resources, Inc. ("Core"), a privately-held entity that
was incorporated solely to hold the leases being acquired by us. Pursuant to the
merger agreement, each issued and outstanding share of common stock of Core was
converted into the right to receive (i) 5.39270725 shares of our common stock
and (ii) cash in an amount determined by dividing $706,123.25 by 600,000.
Pursuant to the merger agreement, we paid off $2,045,258 of Core indebtedness at
the closing of the merger. The cash paid at closing was funded from cash on hand
and temporary borrowings under our credit facility. We issued 3,235,624 shares
of our common stock as the stock consideration. We also issued an additional
462,231 shares of common stock to a Core shareholder as consideration for the
assignment of a 2% overriding royalty interest owned by that shareholder in the
oil and gas leases of Core (giving us a total 77% net revenue interest). All
stock issued in conjunction with these transactions is restricted stock subject
to resale limitations under Rule 144 of the Securities Act of 1933. Core
stockholders were also granted certain limited piggyback registration rights.
Reverse Stock Split
On August 1, 2006, holders of more than a majority of the outstanding
shares of common stock, Series G Preferred Stock and Series H Preferred Stock,
voting on an as-if converted to common stock basis, executed a written consent
authorizing an amendment to our certificate of incorporation to effect a reverse
stock split of our common stock, pursuant to which any ten shares of issued and
outstanding common stock on the date of the filing of the amendment to our
certificate of incorporation would be combined into one share of common stock,
with any resulting fractional shares rounded up to the nearest whole share of
common stock. This consent was executed following approval of the actions by our
board of directors on July 28, 2006. We filed a preliminary information
statement with the SEC on August 7, 2006, and a definitive information statement
on August 18, 2006, for the reverse stock split. We intend to file the
certificate of amendment to effectuate the reverse stock split no sooner than 20
days after mailing the definitive information statement to our stockholders of
record. The share and related information in this prospectus are as of July 31,
2006 and, accordingly, do not reflect the 1-for-10 reverse stock split. However,
under the terms of our outstanding stock options and warrants and our preferred
stock, the reverse stock split will effect a reduction in the number of shares
of common stock issuable upon exercise or conversion of such stock options,
warrants and preferred stock in proportion to the one for ten exchange ratio of
the reverse stock split and will effect a proportionate increase in the exercise
or conversion price of such outstanding stock options, warrants and preferred
stock. The number of shares we are authorized to issue, the par value of our
shares of capital stock, and the number of outstanding shares of preferred stock
will not be affected by the reverse stock split, and none of the rights
currently accruing to holders of our common stock, options, warrants or
preferred stock would be affected by the reverse stock split.
1
Securities Being Offered
This prospectus covers the resale of an aggregate of 15,101,959 shares
our common stock acquired or to be acquired upon conversion or exchange of our
Series D, E, F and H Preferred Stock or the Series A Preferred Stock and upon
exercise of certain warrants we have issued.
As of July 31, 2006, there were 103,250 shares of preferred stock
issued and outstanding in four series, including 8,000 shares of Series D
Preferred Stock, 9,000 shares of Series E Preferred Stock, 81,000 shares of
Series G Preferred Stock and 5,250 shares of Series H Preferred Stock
(collectively, "Preferred Stock"). All the shares of our predecessor's Series F
Preferred Stock have elected to convert into 1,000,000 shares of common stock
offered by this prospectus. Shares issuable upon conversion of the Series G
Preferred Stock are not covered by this prospectus. The 8,000 shares of Series D
Preferred Stock are held by a former director, as are the 9,000 shares of Series
E Preferred Stock. The 81,000 shares of Series G Preferred Stock are held by OCM
GW Holdings and a limited number of transferees, including an officer, and the
5,250 shares of Series H Preferred Stock are held by OCM GW Holdings, a former
director and nine other investors. The shares of common stock issuable upon
conversion of the Series H Preferred Stock held by OCM GW Holdings, LLC are not
covered by this prospectus. On a fully converted basis, the 8,000 shares of
Series D Preferred Stock would convert to 500,000 shares of common stock. On a
fully converted basis, the 9,000 shares of Series E Preferred Stock would
convert to 2,250,000 shares of common stock, or approximately 2.68 million
shares of common stock including accrued dividends on the Series E Preferred
Stock to the nearest dividend payment date. On a fully converted basis, the
5,250 shares of Series H Preferred Stock outstanding would convert to 7,500,000
shares of common stock. Currently, approximately 7.8 million shares of common
stock to be offered by this prospectus have been issued upon conversion or
exchange of preferred stock.
Since 1996 we have occasionally issued warrants to employees,
consultants and directors as additional compensation. The warrants currently
outstanding and included in this prospectus have an exercise price of $0.75 per
share and entitle the warrant holders to purchase up to 740,000 shares of common
stock. The warrants exercisable for common stock offered by this prospectus
contain certain anti-dilution provisions and have expiration dates from October
31, 2006 to December 1, 2006.
Additionally, warrants are occasionally issued to lenders on loans to
us as additional consideration for entering into the loans or guaranties. These
warrants exercisable for common stock covered by this prospectus have expired or
have been exercised for common stock, including warrants exercised for
2,035,621 shares of common stock issued to our former lenders.
As of July 31, 2006 warrants exercisable for 1,075,000 shares of common
stock initially covered by this prospectus have expired. As of the date of this
prospectus, warrants exercisable for an additional 150,000 shares have expired.
This prospectus does not cover shares of common stock underlying warrants issued
after July 15, 2004.
2
Summary of the Offering
This prospectus relates to the resale of an aggregate of up to
15,101,959 shares of our common stock (the "Shares") issuable or issued to
certain selling shareholders, assuming the conversion and exchange of the
preferred stock described above, to the extent not already converted or
exchanged, and the exercise of the warrants described above. The selling
shareholders may offer to sell the Shares at fixed prices, at prevailing market
prices at the time of sale, or at varying negotiated prices. We will not receive
any proceeds from the resale of Shares by the holders thereof.
As of July 31, 2006 the total number of shares of our common stock
outstanding was 33,138,832, inclusive of shares of common stock underlying
shares of preferred stock that have converted or whose holders have elected to
convert to common stock, or whose shares were automatically exchanged into
common stock, prior to the date of this prospectus, but otherwise not including
the shares reserved for issuance upon the conversion and exchange of the
preferred stock and the exercise of the warrants described above.
On August 15, 2006, the average of the high and low bid and asked
prices of our common stock as traded over-the-counter was $0.70 per share.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed a registration statement on Form S-1, as amended, under
the Securities Act with the Securities and Exchange Commission with respect to
the shares offered hereby. This prospectus is filed as a part of the
registration statement. It does not contain all of the information included in
the registration statement and exhibits and we refer you to such omitted
information. Statements made in this registration statement are summaries of the
terms of these referenced contracts, agreements or documents and are not
necessarily complete. We refer you to each exhibit for a more complete
description of the matters involved and these statements shall be deemed
qualified in their entirety by this reference.
In addition, we file annual, quarterly, and special reports, proxy
statements, and other information with the Securities and Exchange Commission.
You may read and copy our registration statement on Form S-1, the
exhibits thereto, any reports, statements and other information we file at the
Securities and Exchange Commission's public reference room at 100 F Street,
N.E., Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the Securities and Exchange Commission at
1-800-SEC-0330. Our filings with Securities and Exchange Commission are also
available on the Securities and Exchange Commission's Internet site, which is
http://www.sec.gov.
3
RISK FACTORS
Investing in our common stock involves a high degree of risk. You
should carefully consider and evaluate all of the information contained in this
prospectus and in the documents we incorporate herein by reference before you
decide to purchase our common stock. In particular, you should carefully
consider and evaluate the risks and uncertainties described in Item 1A of our
Annual Report on Form 10-K for the fiscal year ended December 31, 2005, under
the heading "Risk Factors," which information is incorporated herein by
reference, as well as the risks associated with our 1-for-10 reverse stock split
described below. Any of the risks and uncertainties set forth therein or herein
could materially and adversely affect our business, results of operations and
financial condition, which in turn could materially and adversely affect the
trading price of our common stock being offered by this prospectus. As a result,
you could lose all or part of your investment.
THE PROPOSED 1-FOR-10 REVERSE STOCK SPLIT COULD REDUCE THE VALUE OF OUR
COMMON STOCK, INCREASE THE VOLATILITY OF OUR STOCK PRICE AND INCREASE THE
NUMBER OF SHARES OF COMMON STOCK WE MAY ISSUE.
In addition to our previously disclosed risk factors incorporated by
reference in this prospectus, if we complete the 1-for-10 reverse stock split as
described under "Recent Transactions - Reverse Stock Split" the liquidity of our
common stock could be reduced. Reduced liquidity may reduce the value of our
common stock and our ability to use our equity as consideration for an
acquisition or other corporate opportunity. In addition, the reverse split will
decrease the number of shares outstanding, giving individual orders the
potential to create increased volatility in our stock price. Furthermore, if the
reverse stock split is completed, we will be able to issue significantly more
shares of our common stock which could have a material adverse affect on the
market price of our common stock. We are currently authorized to issue 200
million shares of common stock and, after the reverse stock split, will have
approximately 3.3 million shares outstanding.
4
CAPITALIZATION
The following table sets forth our capitalization as of June 30, 2006
and as adjusted to give effect to the issuance of the shares offered by this
prospectus listed under "Summary - Securities Being Offered", assuming
conversion of all the preferred stock described in this prospectus and exercise
of all of the outstanding warrants. You should read this table in conjunction
with our financial statements, "Selected Financial Data" and "Management's
Discussion and Analysis of Results of Operations and Financial Condition"
included in our Annual Report on Form 10-K for the year ended December 31, 2005.
Proforma
Adjustments Post
Actual Assuming Balance Sheet Proforma
June 30, 2006 Conversion (1) Adjustments (2) June 30, 2006
------------- -------------- -------------- -------------
Cash $ 33,795 $ - $ 11,700 $ 45,495
============ ============= ============== ============
Working capital, including cash $ (2,284,996) $ (2,284,996)
Total long-term debt, net of
current portion (2,512,197) - - (2,512,197)
------------ ------------- -------------- ------------
Total working capital (deficit)
and long-term debt $ (4,797,193) $ - $ - $ (4,797,193)
============ ============= ============== ============
Shareholders' equity
Series D Preferred Stock, $.01
par value, $500 $ $ $ $
liquidation value, 8,000 shares
outstanding actual--no shares
outstanding as adjusted 80 (80) -
Series E Preferred Stock, $.01
par value, $500
liquidation value, 9,000 shares
outstanding actual--no shares
outstanding as adjusted 90 (90) -
Series G Preferred Stock, $.01
par value, $500
liquidation value, 81,000
shares outstanding actual--
no shares outstanding as adjusted 810 (810) -
Series H Preferred Stock, $.01
par value, $500
liquidation value, 5,250 shares
outstanding actual--no shares
outstanding as adjusted 53 (53) -
Class A Common Stock, $.001 par
value, 33,126,832 shares
outstanding actual
88,402,832 as adjusted 33,127 55,250 26 88,403
Additional paid-in equity 77,485,309 (54,217) 11,674 77,442,766
Accumulated deficit (18,582,039) - - (18,582,039)
------------ ------------- -------------- ------------
Total shareholders' equity $ 58,937,430 $ - $ 11,700 $ 58,949,130
============ ============= ============== ============
------------
(1) Adjustments to the June 30, 2006 balance sheet assuming that all
convertible securities registered under this S-1 Registration Statement
were converted to common stock on June 30, 2006.
(2) Adjustments to the June 30, 2006 balance sheet reflecting the issuance of
26,000 shares of common stock after the June 30, 2006 balance sheet date.
5
DIVIDEND POLICY
We have never declared or paid cash dividends on our common stock. Our
senior secured revolving credit facility and the terms of our preferred stock
restrict the payment of dividends. We currently intend to retain all available
funds and any future earnings for use in the operation of our business and to
fund future growth. We do not anticipate paying any cash dividends in the
foreseeable future.
6
FORWARD-LOOKING STATEMENTS
We make forward-looking statements throughout this prospectus. Whenever
you read a statement that is not simply a statement of historical fact (such as
when we describe what we "believe," "expect" or "anticipate" will occur, and
other similar statements), you must remember that our expectations may not be
correct, even though we believe they are reasonable. We do not guarantee that
the transactions and events described in this prospectus will happen as
described (or that they will happen at all). The forward-looking information may
be found throughout this prospectus and in the material incorporated by
reference into this prospectus. These forward-looking statements generally
relate to our plans and objectives for future operations and are based upon our
management's reasonable estimates of future results and trends.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU
WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS MAY ONLY BE USED WHERE IT IS
LEGAL TO SELL THESE SECURITIES. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF WHEN THIS
PROSPECTUS IS DELIVERED OR THE DATE OF ANY SALE OF OUR COMMON STOCK.
7
MARKET PRICE OF COMMON STOCK
Our common stock, par value $0.001 per share, is traded
over-the-counter (OTC) under the symbol "CXPI". Fidelity Transfer Company, 1800
South West Temple, Suite 301, Box 53, Salt Lake City, Utah 84115, (801)
484-7222, is the transfer agent for the common stock. The high and low trading
prices for the common stock for each quarter in 2006, 2005 and 2004 are set
forth below. The trading prices represent prices between dealers, without retail
mark-ups, mark-downs, or commissions, and may not necessarily represent actual
transactions.
High Low
---- ---
2006
----
First Quarter $ .97 $ .63
Second Quarter .89 .63
Third Quarter (to August 15, 2006) .71 .64
2005
----
First Quarter $1.49 $ .79
Second Quarter 1.21 .84
Third Quarter 1.39 .84
Fourth Quarter 1.11 .85
2004
----
First Quarter $.56 $.32
Second Quarter .56 .33
Third Quarter .85 .45
Fourth Quarter .94 .66
The common stock is held by approximately 251 record owners.
USE OF PROCEEDS
There will be no proceeds to us from the sale of shares of common stock
in this offering. However, we will receive proceeds from the sale of shares of
common stock upon the exercise of any warrants. Any proceeds received upon
exercise of warrants will be used for general working capital purposes.
8
SELLING SHAREHOLDERS
The selling shareholders may offer and sell, from time to time, any or
all of the Shares. Because the selling shareholders may offer all or only some
portion of the 15,101,959 Shares, no estimate can be given as to the amount or
percentage of these Shares that will be held by the selling shareholders upon
termination of the offering.
The following table sets forth the name and relationship with us, if
any, of certain of the selling shareholders and (i) the maximum number of shares
of common stock which may be offered for the account of the selling shareholders
under this prospectus, (ii) the amount and percentage of common stock that would
be owned by the selling shareholders after completion of the offering, assuming
a sale of all of the common stock which may be offered hereunder and (iii) the
number of shares of common stock beneficially owned by the selling shareholders
as of the date of this prospectus. Except as otherwise noted below, the selling
shareholders have not, within the past three years, had any position, office or
other material relationship with us.
Beneficial ownership is determined under the rules of the Securities
and Exchange Commission. The number of shares beneficially owned by a person
includes shares of common stock subject to options, warrants and preferred stock
held by that person that are currently convertible or exercisable or convertible
or exercisable within 60 days of the date of this prospectus. The shares
issuable under these securities are treated as if outstanding for computing the
percentage ownership of the person holding these securities but are not treated
as if outstanding for the purposes of computing the percentage ownership of any
other person.
----------------------------------------------------------- -------------- ------------------- ---------------------
Name and Address of Total Shares Amount and % of Total Shares
Selling Security Holder Registered Ownership Owned(1)
----------------------------------------------------------- -------------- ------------------- ---------------------
Drawbridge Special Opportunities Fund, L.P (2)(3) 1,009,112 14,550 1,023,662
1251 Avenue of the Americas
16th Floor *
New York, NY 10020
----------------------------------------------------------- -------------- ------------------- ---------------------
D.B. Zwirn Special Opportunities Fund, L.P. (2)(4) 1,009,112 14,550 1,023,662
745 5th Avenue
18th Floor
New York, NY 10151
*
----------------------------------------------------------- -------------- ------------------- ---------------------
Petro Capital Advisors (5)(6) 765,372 0 765,372
3838 Oak Lawn Ave., Suite 1775
Dallas, TX 75201 *
----------------------------------------------------------- -------------- ------------------- ---------------------
Petro Capital Holdings LLC (7) 300,000 0 300,000
c/o Jefferies & Co. Inc.
Harborside Financial Center *
705 Plaza 3
P.O. Box 469
Jersey City, NJ 07311
----------------------------------------------------------- -------------- ------------------- ---------------------
9
----------------------------------------------------------- -------------- ------------------- ---------------------
Name and Address of Total Shares Amount and % of Total Shares
Selling Security Holder Registered Ownership Owned(1)
----------------------------------------------------------- -------------- ------------------- ---------------------
Virgil Waggoner (8) 6,535,715 9,183,329 15,719,044
6605 Cypresswood Drive, Suite 250
Spring, TX 77379 22.3%
----------------------------------------------------------- -------------- ------------------- ---------------------
Patrick Parker 597,143 45,000 642,143
Scarbrough Building, 6th and Congress,
101 W. 6th St. Suite 610 *
Austin, TX 78701
----------------------------------------------------------- -------------- ------------------- ---------------------
Douglas Moreland 930,000 80,777 1,010,777
1655 East Layton Drive
Englewood, CO 80100
*
----------------------------------------------------------- -------------- ------------------- ---------------------
XMen, LLC (9) 1,293,886 0 1,293,886
520 Lake Cook Road, Suite105
Deerfield, IL 60015
*
----------------------------------------------------------- -------------- ------------------- ---------------------
Bruce Goldstein 77,143 3,000 80,143
1934 Deercrest Lane
Northbrook, IL 60062
*
----------------------------------------------------------- -------------- ------------------- ---------------------
Barry S. Cohn Revocable Trust (10) 214,286 11,250 225,536
2505 Astor Court
Glenview, IL 60025
*
----------------------------------------------------------- -------------- ------------------- ---------------------
Bargus Partnership (11) 123,765 11,290 134,054
(Gus Schultes)664 South Evergreen Ave
Woodbury Heights, NJ 08097 *
----------------------------------------------------------- -------------- ------------------- ---------------------
Schultes Family Partnership LP (12) 124,429 9,623 134,052
(Ed Schultes)
664 South Evergreen Ave *
Woodbury Heights, NJ 08097
----------------------------------------------------------- -------------- ------------------- ---------------------
10
----------------------------------------------------------- -------------- ------------------- ---------------------
Name and Address of Total Shares Amount and % of Total Shares
Selling Security Holder Registered Ownership Owned(1)
----------------------------------------------------------- -------------- ------------------- ---------------------
Richard Schultes 124,429 9,623 134,052
664 South Evergreen Ave
Woodbury Heights, NJ 08097 *
----------------------------------------------------------- -------------- ------------------- ---------------------
4-Sibs, LLC (13) 124,429 9,623 134,052
664 South Evergreen Ave
Woodbury Heights, NJ 08097 *
----------------------------------------------------------- -------------- ------------------- ---------------------
William Jefferys 21,285 1,924 23,209
664 South Evergreen Ave
Woodbury Heights, NJ 08097 *
----------------------------------------------------------- -------------- ------------------- ---------------------
John T. O'Brien and Linda O'Brian 25,285 1,924 27,209
(JTWROS)
664 South Evergreen Ave *
Woodbury Heights, NJ 08097
----------------------------------------------------------- -------------- ------------------- ---------------------
Robert Collison 25,285 1,924 27,209
664 South Evergreen Ave
Woodbury Heights, NJ 08097 *
----------------------------------------------------------- -------------- ------------------- ---------------------
David Hartman 25,285 1,924 27,209
664 South Evergreen Ave
Woodbury Heights, NJ 08097 *
----------------------------------------------------------- -------------- ------------------- ---------------------
Jeffrey DeMatte 14,570 1,923 16,493
664 South Evergreen Ave
Woodbury Heights, NJ 08097 *
----------------------------------------------------------- -------------- ------------------- ---------------------
Edwin J. Hagerty (14) 371,429 19,500 390,929
13355 Noel Road, Suite 1400
Dallas, TX 75248 *
----------------------------------------------------------- -------------- ------------------- ---------------------
ST Advisory Corp./John E. Loehr (15) 270,000 7,500 227,500
16300 Addison Rd., Suite 300
Addison, TX 75001 *
----------------------------------------------------------- -------------- ------------------- ---------------------
Thomas R, Kaetzer (16) 200,000 558,852 758,852
480 N. Sam Houston Parkway, Suite 300
Houston, TX 77060 1.85%
----------------------------------------------------------- -------------- ------------------- ---------------------
11
----------------------------------------------------------- -------------- ------------------- ---------------------
Name and Address of Total Shares Amount and % of Total Shares
Selling Security Holder Registered Ownership Owned(1)
----------------------------------------------------------- -------------- ------------------- ---------------------
Jim C. Bigham (17) 100,000 185,985 285,985
1051 Hatchell Lane
Denham Spring, LA. 70726 *
----------------------------------------------------------- -------------- ------------------- ---------------------
Marshall A. Smith III (18) 270,000 593,706 863,706
480 N. Sam Houston Parkway, Suite 300
Houston, TX 77060 1.43%
----------------------------------------------------------- -------------- ------------------- ---------------------
Steven M. Morris 500,000 0 500,000
P.O. Box 941828
Houston, TX 77094 *
----------------------------------------------------------- -------------- ------------------- ---------------------
John Kruljac (19) 20,000 0 20,000
8873 E. Bayou Gulch Road
Parker, CO 80134 *
----------------------------------------------------------- -------------- ------------------- ---------------------
USGT Investors (20) 30,000 0 30,000
1845 Woodall Rodgers, Suite 1700
Dallas, TX 75201 *
----------------------------------------------------------- -------------- ------------------- ---------------------
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* 1% or less
1 Includes shares registered hereunder.
2 The selling shareholder is a former lender.
3 Mr. Constantine Dakolias makes voting and investment decisions with
respect to the securities that may be resold by the selling shareholder.
4 Mr. Daniel Zwirn makes voting and investment decisions with respect to the
securities that may be resold by the selling shareholder.
5 The selling shareholder is a former investment advisor and affiliated with
Petro Capital Securities, LLC, a registered broker-dealer.
6 Mr. Tracy Turner makes voting and investment decisions with respect to the
securities that may be resold by the selling shareholder.
7 The selling shareholder is affiliated with Petro Capital Securities, LLC, a
registered broker-dealer. Mr. Rosser Newton makes voting and investment
decisions with respect to the securities that may be resold by the selling
shareholder.
8 Mr. Waggoner is a former director of the Company.
12
9 Mr. James Schneider makes voting and investment decisions with respect to
the securities that may be resold by the selling shareholder.
10 Mr. Barry S. Cohn makes voting and investment decisions with respect to the
securities that may be resold by the selling shareholder.
11 Mr. Gus Schultes makes voting and investment decisions with respect to the
securities that may be resold by the selling shareholder.
12 Mr. Ed Schultes makes voting and investment decisions with respect to the
securities that may be resold by the selling shareholder.
13 Mr. Ed Schultes makes voting and investment decisions with respect to the
securities that may be resold by the selling shareholder.
14 The selling shareholder is affiliated with Petro Capital Securities, LLC, a
registered broker-dealer.
15 Mr. Loehr is a former director and officer of the Company. Reflects
270,000 shares issuable to Mr. Loehr pursuant to immediately exercisable
warrants and 200,000 shares issued upon exchange of preferred stock held by
ST Advisory Corp. ST Advisory Corp. is owned by John E. Loehr who makes
voting and investment decisions with respect to the securities that may be
resold by such entity.
16 Mr. Kaetzer is a former Senior Vice President of Operations of the Company.
17 Mr. Bigham is a former Vice President and Secretary of the Company.
18 Mr. Smith was a director of the Company.
19 The selling shareholder is affiliated with Bathgate Capital Partners,
a registered broker-dealer.
20 Mr. Robert Bachman makes voting and investment decisions with respect to
the securities that may be resold by the selling shareholder.
13
PLAN OF DISTRIBUTION
The selling shareholders, which as used herein includes donees,
pledgees, transferees or other successors-in-interest selling shares of common
stock or interests in shares of common stock received after the date of this
prospectus from a selling shareholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell all or a portion of
the shares of common stock on any market upon which the common stock may be
quoted (currently the OTC Bulletin Board), in privately negotiated transactions
or otherwise. Such sales may be at fixed prices prevailing at the time of sale,
at prices related to the market prices or at negotiated prices. The shares of
common stock being offered by this prospectus may be sold by the selling
shareholders using one or more of the following methods, without limitation:
(a) block trades in which the broker or dealer so engaged will attempt
to sell the shares of common stock as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
(b) purchases by a broker or dealer as principal and resale by the
broker or dealer for its account pursuant to this prospectus;
(c) an exchange distribution in accordance with the rules of the
applicable exchange;
(d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
(e) privately negotiated transactions;
(f) market sales (both long and short to the extent permitted under
the federal securities laws);
(g) at the market to or through market makers or into an existing
market for the shares;
(h) through transactions in options, swaps or other derivatives
(whether exchange listed or otherwise); and
(i) a combination of any aforementioned methods of sale.
The selling shareholders may, from time to time, pledge or grant a
security interest in some or all of the shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock, from
time to time, under this prospectus, or under an amendment or supplement to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act of 1933 amending the list of selling shareholders to include the pledgee,
transferee or other successors-in-interest as selling shareholders under this
prospectus. The selling shareholders also may transfer the shares of common
stock in other circumstances, in which case the transferees, pledgees or other
successors-in-interest will be the selling beneficial owners for purposes of
this prospectus.
In effecting sales, brokers and dealers engaged by a selling
shareholder may arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions or discounts from the selling shareholder or, if
any of the broker-dealers act as an agent for the purchaser of such shares, from
the purchaser in amounts to be negotiated which are not expected to exceed those
customary in the types of transactions involved. Broker-dealers may agree with a
selling shareholder to sell a specified number of the shares of common stock at
a stipulated price per share. Such an agreement may also require the
broker-dealer to purchase as principal any unsold shares of common stock at the
price required to fulfill the broker-dealer commitment to the selling
shareholder if such broker-dealer is unable to sell the shares on behalf of the
selling shareholder. Broker-dealers who acquire shares of common stock as
principal may thereafter resell the shares of common stock from time to time in
transactions which may involve block transactions and sales to and through other
broker-dealers, including transactions of the nature described above. Such sales
by a broker-dealer could be at prices and on terms then prevailing at the time
of sale, at prices related to the then-current market price or in negotiated
transactions. In connection with such resales, the broker-dealer may pay to or
receive from the purchasers of the shares commissions as described above.
14
A selling shareholder and any broker-dealers or agents that participate
with that selling shareholder in the sale of the shares of common stock may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended, in connection with these sales. In that event, any commissions received
by the broker-dealers or agents and any profit on the resale of the shares of
common stock purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act of 1933, as amended.
In connection with the sale of our common stock or interests therein,
the selling shareholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
shareholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
To the extent required under the Securities Act of 1933, a prospectus
supplement or, if appropriate, a post effective amendment to this registration
statement will be filed, disclosing the name of any broker-dealers, the number
of shares of common stock involved, the price at which the common stock is to be
sold, the commissions paid or discounts or concessions allowed to such
broker-dealers and, where applicable, that such broker-dealers did not conduct
any investigation to verify the information set out or incorporated by reference
in this prospectus and other facts material to the transaction.
We and the selling shareholders will be subject to applicable
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations under it, including, without limitation, Rule 10b-5 and, insofar as
a selling shareholder is a distribution participant and we, under certain
circumstances, may be a distribution participant, under Regulation M. All of the
foregoing may affect the marketability of the common stock.
All expenses of the registration statement including, but not limited
to, legal, accounting, printing and mailing fees are and will be borne by us.
Any commissions, discounts or other fees payable to brokers or dealers in
connection with any sale of the shares of common stock will be borne by the
selling shareholder, the purchasers participating in such transaction, or both.
We have agreed to indemnify certain of the selling shareholders against
liabilities, including liabilities under the Securities Act of 1933, relating to
the registration of the shares offered by this prospectus.
Any shares of common stock covered by this prospectus that qualify for
sale pursuant to Rule 144 under the Securities Act of 1933, as amended, may be
sold under Rule 144 rather than pursuant to this prospectus.
15
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
On February 28, 2005, OCM GW Holdings purchased 81,000 shares of Series
G Preferred Stock and 2,000 shares of Series A Preferred Stock for $42 million.
In addition, on May 17, 2005, we executed a promissory note for the benefit of
OCM GW Holdings, in the principal amount of $1 million, payable on the earlier
of July 17, 2005 and the day on which we are able to make draws under a credit
facility under which greater than $1 million may be borrowed. Interest on the
unpaid principal accrued at 4.59% per annum. We repaid the note in full on July
19, 2005 from borrowings under our new $100 million senior secured revolving
credit facility. Skardon F. Baker, a director, is a vice president of and B.
James Ford, also a director, is a managing director of Oaktree Capital
Management, LLC, the ultimate parent of OCM GW Holdings.
In connection with our April 2004 financing, J. Virgil Waggoner, a
former director and beneficial owner of over 5% of our common stock, and
Star-Tex Trading Co., an entity managed by John E. Loehr, an officer and a
director at the time, purchased 3,000 shares and 200 shares, respectively, of
Series A Preferred Stock at a price of $500 per share. The shares of common
stock underlying such Series A and Series H Preferred Stock (which the Series A
Preferred Stock was exchanged for) are included in this prospectus. On November
6, 2002, Mr. J. Virgil Waggoner, a director, provided us a loan in the initial
amount of $1,200,000, which was subsequently increased to a total of $1,500,000,
which was outstanding at February 28, 2005. We issued Mr. Waggoner a promissory
note with interest at the prime rate (prime rate 4.0% at May 26, 2004), secured
by common stock of our of wholly-owned subsidiary, DutchWest Oil Company. Mr.
Waggoner also received warrants to purchase 625,000 shares of our common stock
at an exercise price of $.75 per share. Those underlying shares are included in
this prospectus. The note with accrued interest was paid off in connection with
the February 2005 offering, for a total payment amount of $1,727,655.
In December 2001, the Company and Summit Investment Group Texas L.L.C.,
entered into an agreement (the "Summit Agreement") relating to the development
of oil and gas properties in several counties in Texas. On March 5, 2004, we
entered into an Option Agreement for the Purchase of Oil and Gas Leases (the
"Addison Agreement") with W. L. Addison Investments L.L.C., a private company
owned by Mr. J. Virgil Waggoner and Mr. John E. Loehr, two of our former
directors ("Addison"). Under the Addison Agreement, Addison agreed to pay
Summit, on our behalf, the non-recouped and outstanding advanced funds under the
agreement amounting to $1,200,000, thereby retiring the Summit Agreement except
for certain surviving obligations with respect to areas of mutual interest and
lease bank agreements expiring in 2008 and Summit retained the right to
participate up to a 25% working interest in the drilling of any wells on the
leases acquired by Addison. For consideration of such payment, Addison acquired
certain oil and gas leases and wellbores from Summit but agreed to grant us a
180-day redemption option (which was extended by mutual consent on July 15,
2004) to purchase the same for $1,200,000, plus interest at the prime rate plus
2%. In substitution for an account payable to Summit, we granted Addison a
promissory note for $600,000, with interest at the prime rate plus 2%. The
Addison promissory note would be considered paid in full if we exercised the
redemption option by paying the $1,200,000, plus interest. We exercised the
redemption option and Addison received $1,275,353 at the closing of the February
2005 offering and waived its rights under the agreement to retain up to a 25%
working interest under the leases.
As part of the April 2004 refinancing, a former lender agreed to return
all 2,000 shares of our Series F Preferred Stock held by it. Rather than receive
the shares as treasury shares (which would have meant cancellation of the
series) at our request the former lender transferred 400 of the shares to ST
Advisory Corp., an entity owned by John E. Loehr, our former Chief Executive
Officer and also a former director, 400 of the shares to a financial advisor to
the Company, and 200 of the shares to Thomas R. Kaetzer, our President and a
director at that time and 1,000 shares to Intermarket Management LLC, an entity
partially owned by M. Scott Manolis, one of our directors at that time. These
transfers were to compensate Mr. Kaetzer, the financial advisor and the entities
controlled by Mr. Loehr and Mr. Manolis for service to the Company. The shares
of common stock underlying such shares of Series F Preferred Stock are included
in this prospectus.
16
As part of the closing of the February 2005 offering, the investor and
the Company agreed to pay certain legal, accounting and other due diligence
costs and, also certain closing fees which totaled approximately $3.75 million.
Of this certain related parties received the following fees: OCM GW Holdings,
LLC $1,000,000; Intermarket Management LLC $500,000 (Mr. Manolis, one of our
directors at the time, is an owner of Intermarket Management); Mr. Allan D. Keel
$300,000 (which was used to invest in the subject offering). In January 2005,
Allan D. Keel and another individual lent an aggregate of $200,000, $120,000 of
which is attributable to Mr. Keel, to the Company, which was repaid in full out
of the proceeds of the sale of the Series G Preferred Stock described above. Mr.
Keel received warrants to purchase 30,000 shares of Common Stock at $0.01 share
in connection with this transaction.
17
DESCRIPTION OF SECURITIES
General
The following descriptions are summaries of material terms of our
common stock, preferred stock, certificate of incorporation and bylaws. This
summary is qualified by reference to our certificate of incorporation, bylaws
and the designations of our preferred stock, which have been previously filed as
exhibits to our public filings with the Securities and Exchange Commission, and
by the provisions of applicable law.
We are authorized to issue 200 million shares of common stock, par
value $.001 per share. As of July 31, 2006, there were 33,138,832 shares of our
sole class of common stock issued and outstanding, and held by approximately 251
record owners. On an "as converted" basis, if all of the common stock underlying
our various convertible and derivative securities, including warrants and
granted employee stock options, outstanding at July 31, 2006 is issued by us,
the number of our outstanding shares of common stock will increase to
approximately 117.4 million shares.
Our common stock is traded over-the-counter (OTC) under the symbol
"CXPI". Fidelity Transfer Company, 1800 South West Temple, Suite 301, Box 53,
Salt Lake City, Utah 84115, (801) 484-7222 is the transfer agent for the common
stock.
Our Common Stock
The holders of our common stock are entitled, among other things, to
one vote per share on each matter submitted to a vote of shareholders and, in
the event of liquidation, to share ratably in the distribution of assets
remaining after payment of liabilities (including preferential distribution and
dividend rights of holders of preferred stock). The common stock does not have
cumulative voting rights. The holders of the outstanding shares of the common
stock, voting with the holders of the Series H Preferred Stock on an as
converted basis, elect, by plurality vote, all of the directors not entitled to
be elected by holders of the Series G Preferred Stock voting as a class, who are
entitled to elect a majority of our Board of Directors.
Holders of common stock have no preemptive or other rights to subscribe
for shares. Holders of common stock are entitled to such dividends as may be
declared by the Board out of funds legally available therefor. We have never
paid cash dividends on the common stock and do not anticipate paying any cash
dividends in the foreseeable future. As described below, the terms of our
preferred stock may limit our ability to declare and pay dividends on the common
stock.
Our Preferred Stock
Our board of directors is authorized, without further shareholder
action, to issue preferred stock in one or more series and to designate the
dividend rate, voting rights and other rights, preferences and restrictions of
each such series.
As of July 31, 2006, there were 103,250 shares of preferred stock, par
value $0.01 per share, issued and outstanding in four series, including 8,000
shares of Series D Preferred Stock (the "Series D Preferred Stock"), 9,000
shares of Cumulative Convertible Preferred Stock, Series E (the "Series E
Preferred Stock"), 81,000 shares of Series G Convertible Preferred Stock (the
"Series G Preferred Stock") and 5,250 shares of Series H Preferred Stock (the
"Series H Preferred Stock"; collectively, "Preferred Stock"). The 8,000 shares
of Series D Preferred Stock are held by a former director, as are the 9,000
shares of Series E Preferred Stock. The 81,000 shares of Series G Preferred
Stock are held by OCM GW Holdings, an officer, and 10 other investors. The 5,250
shares of Series H Preferred Stock are held by 11 parties including 3,000 shares
by a former director and 2,000 shares by OCM GW Holdings. Our preferred stock is
senior to our common stock regarding liquidation. All of our Series F Preferred
Stock and GulfWest Oil & Gas Company's Series A Preferred Stock has either
converted to or been exchanged for common stock or, in the case of the Series A
Preferred Stock exchanged for Series H Preferred Stock.
18
The Series D Preferred Stock does not have voting rights except as
required by law, is not entitled to dividends, nor is it redeemable. However it
is convertible to common stock at any time. None of the 8,000 outstanding shares
of Series D Preferred Stock has been converted. On a fully converted basis, the
8,000 shares of Series D Preferred Stock would convert to 500,000 shares of
common stock. The Series D Preferred Stock is of equal priority with the Series
E Preferred Stock as to liquidation, and has a $500 per share liquidation value.
The Series E Preferred Stock is entitled to receive cumulative
dividends at the rate of 6% per year, expressed as a percentage of the stock's
$500 liquidation value plus accrued and unpaid dividends, payable quarterly.
Except as permitted in the certificate of designation for the Series E Preferred
Stock, dividends may not be paid on the common stock or other junior stock
unless dividends on the Series E Preferred Stock have been paid. Dividends on
the Series E Preferred Stock will accrue but not be paid until March 31, 2009,
at which time we will commence quarterly dividend payments. Deferred dividends
on the Series E Preferred Stock may be paid to the extent the board of directors
elects to do so or dividends on the Series G Preferred Stock are paid for a
quarter. Accrued dividends on the Series E Preferred Stock may be converted to
common stock at a conversion price of $0.90. Accrued and unpaid deferred
dividends are to be paid on liquidation or, at our option, with the consent of
the holders affected, at any time.
The Series E Preferred Stock is redeemable in whole or in part at any
time, at our option, at a price of $500 per share, plus all accrued and
undeclared or unpaid dividends; except that, prior to our redemption, the
holders of record shall be given a 60-day written notice of our intent to redeem
and the opportunity to convert the Series E Preferred Stock to common stock. The
conversion price for the Series E Preferred Stock is based on $2.00 per share of
common stock. Upon a change of control, the Series E Preferred Stock is
redeemable at the holder's election at the same redemption price, provided that
holders may convert their shares to common stock prior to the redemption date.
The Series E Preferred Stock automatically converts to common stock to the
extent OCM GW Holdings and its affiliates convert their shares of Series G
Preferred Stock. The consent of a majority of the Series E Preferred Stock is
required to amend, alter, waive or repeal our charter or bylaws, if the result
would adversely affect the Series E Preferred Stock, or to increase the number
of directors above nine. None of the 9,000 outstanding shares of Series E
Preferred Stock has been redeemed or converted. On a fully converted basis, the
9,000 shares of Series E Preferred Stock would convert to 2,250,000 shares of
common stock, or approximately 2.7 million shares, including dividends accrued
to the last dividend payment date.
19
The Series G Preferred Stock ranks senior to all outstanding classes of
capital stock. The Series G Preferred Stock provides for an 8% cumulative cash
dividend, expressed as a percentage of the stock's $500 liquidation value plus
accrued and unpaid dividends, which will accrue but not be paid until the
dividend owing April 1, 2009 is required to be paid, at which time we will
commence quarterly dividend payments. Deferred dividends may be paid to the
extent the board of directors elects to do so. Accrued dividends on the Series G
Preferred Stock may be converted to common stock at a conversion price of $0.90.
Accrued and unpaid deferred dividends are to be paid on liquidation or, at our
option, with the consent of the holders affected, at any time. The Series G
Preferred Stock may be redeemed by us after February 28, 2009 if a share of the
underlying common stock trades at a price greater than the $.90 (as adjusted)
conversion price for 30 consecutive trading days, at a price per share of Series
G Preferred Stock equal to $500 plus accrued and unpaid dividends. In addition,
we may be required to redeem the Series G Preferred Stock upon a change of
control or if requested by a majority of holders if we breach the document
governing the Series G Preferred Stock or if OCM GW Holdings and it affiliates
suffer more than $3 million in damages arising from our breaches of covenants,
representations or warranties under the Series G Preferred Stock subscription
agreement or Shareholders Rights Agreement between us and OCM GW Holdings,
provided that holders may convert their shares to common stock prior to the
redemption date. If a dividend, other than a common stock dividend, is declared
on our common stock we will be required to declare a similar distribution with
respect to shares of Series G Preferred Stock on an as-converted basis. The
consent of a majority of the Series G Preferred Stock is required to pay a
dividend or make a distribution on or make any other payment with respect to the
capital stock of the company, except as permitted in the certificate of
designation for the Series G Preferred Stock, or to effect a change in control.
In addition, the consent of the majority of the Series G preferred Stock is
required to issue senior stock or parity stock or to amend, modify or repeal the
Series G certificate of designation or any other preferred stock certificate of
designation, or the charter or bylaws if the result could reasonably be expected
to adversely affect the Series G Preferred Stock. On a fully converted basis,
the 81,000 shares of Series G Preferred Stock would convert to approximately 45
million shares of common stock, or approximately 49.8 million shares, including
dividends accrued up to the last dividend payment date.
The Series H Preferred Stock is convertible into common stock at a
conversion price of $0.35 a share and ranks junior to the Series G Preferred
Stock as to dividends and liquidation but senior to all other outstanding
classes of preferred stock of the Company. Holders of the Series H Preferred
Stock are entitled to cumulative quarterly dividends of 10 shares of common
stock per share of Series H Preferred Stock, or 40 shares of common stock
annually per share of Series H Preferred Stock. The Series H Preferred Stock may
be redeemed by us if we elect to redeem the Series G Preferred Stock, at a price
per share of $500, the amount each share is entitled to upon liquidation,
provided that holders may convert their shares to common stock prior to the
redemption date. The Series H Preferred Stock automatically converts to common
stock to the extent OCM GW Holdings and its affiliates convert their Series G
Preferred Stock. The consent of a majority of the Series H Preferred Stock is
required to amend, modify or repeal the certificate of designation for the
Series H Preferred Stock, or the charter if the result could reasonably be
expected to adversely affect the Series H Preferred Stock. In addition, the
consent of a majority of the Series H Preferred Stock is required to pay a
dividend or make a distribution on or make any other payment with respect to our
capital stock, except as permitted in the certificate of designation for the
Series H Preferred Stock. On a fully converted basis, the 5,250 shares of Series
H Preferred Stock would convert into approximately 7.5 million shares of common
stock.
Holders of both the Series G Preferred Stock and Series H Preferred
Stock vote on an as-converted basis with the holders of the common stock. The
Series G Preferred Stock, voting as a class, has the right to elect a majority
of our board. The Series E Preferred Stock has the right to appoint one director
in the event of two or more dividend defaults or our insolvency or similar
events. The conversion rights of each series of preferred stock are subject to
anti-dilution adjustments set forth in the certificate of designation for each
series.
Outstanding Options and Warrants
At July 31, 2006, we had outstanding warrants and options for the
purchase of 23,889,000 shares of common stock at prices ranging from $.01 to
$1.81 per share, including employee stock options to purchase 23,644,000 shares
at prices ranging from $.45 to $1.81 per share. If we issue additional shares,
the existing shareholders' percentage ownership of the Company may be further
diluted.
Anti-Takeover Effects of Delaware Laws and Our Charter and Bylaws Provisions
Certificate of Incorporation and Bylaws. Certain provisions in our
Certificate of Incorporation and Bylaws summarized below may be deemed to have
an anti-takeover effect and may delay, deter or prevent a tender offer or
takeover attempt that a shareholder might consider to be in its best interests,
including attempts that might result in a premium being paid over the market
price for the shares held by shareholders.
20
Our Certificate of Incorporation and Bylaws contain provisions that
(unless, as a general matter, a preferred stock designation provides otherwise
for that series of preferred stock):
o permit us to issue, without any further vote or action by the
shareholders, additional shares of preferred stock in one or more
series and, with respect to each such series, to fix the number
of shares constituting the series and the designation of the
series, the voting powers (if any) of the shares of the series,
and the preferences and relative, participating, optional and
other special rights, if any, and any qualification, limitations
or restrictions, of the shares of such series;
o require special meetings of the shareholders to be called by the
Chairman of the Board, the Chief Executive Officer, the President
or by resolution of a majority of the Board;
o require business at special meetings to be limited to the stated
purpose or purposes of that meeting;
o require that shareholder action to be taken at a meeting rather
than by written consent, unless approved by our board of
directors;
o require that shareholders follow certain procedures, including
advance notice procedures, to bring certain matters before an
annual meeting or to nominate a director for election; and
o permit directors to fill vacancies in our Board of Directors.
The foregoing provisions of our Certificate of Incorporation and Bylaws
could discourage potential acquisition proposals and could delay or prevent a
change in control. These provisions are intended to enhance the likelihood of
continuity and stability in the composition of the board of directors and in the
policies formulated by the board of directors and to discourage certain types of
transactions that may involve an actual or threatened change of control. These
provisions are designed to reduce our vulnerability to an unsolicited
acquisition proposal. The provisions also are intended to discourage certain
tactics that may be used in proxy fights. However, such provisions could have
the effect of discouraging others from making tender offers for our shares and,
as a consequence, they also may inhibit fluctuations in the market price of our
common stock that could result form actual or rumored takeover attempts. Such
provisions also may have the effect of preventing changes in our management.
Limitation on Liability of Directors
Section 145 of the Delaware General Corporation Law permits us
to indemnify directors, officers, employees or agents, or persons serving in
such capacity at our request at another entity, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred, other than an action by or in the right of the company, to
which such director, officer, employee or agent may be a party, provided such
person shall have acted in good faith and shall have reasonably believed that
his conduct was in or not opposed to our best interests and, in the case of a
criminal proceeding, that he had no reasonable cause to believe his conduct was
unlawful. In connection with an action by or in the right of the company against
a director, officer, employee or agent, we have the power to indemnify such
director, officer, employee or agent for actual and reasonable expenses
(including attorneys' fees) incurred in connection with the defense or
settlement of such suit (a) if such person acted in good faith and in a manner
he reasonably believed to be in or not opposed to our best interest, and (b) if
found liable to us only if ordered by a court of law. Section 145 provides that
such section is not exclusive of any other indemnification rights granted by us
to directors, officers, employees or agents. The Delaware General Corporation
Law provides for mandatory indemnification of directors and officers where such
director or officer is successful on the merits in the types of proceedings
discussed above.
21
Our Certificate of Incorporation and Bylaws provide for mandatory
indemnification of directors to the fullest extent authorized or permitted by
applicable law. The right to indemnification is a contract right and includes
the right to be paid by us the expenses incurred in defending any such
proceeding in advance of its final disposition. Our Bylaws provide that, if the
Delaware General Corporation Law requires, an advancement of expenses incurred
by a director in his capacity as a director or officer may be made only upon
delivery to us of an undertaking to repay all advanced amounts if it is
ultimately determined by final nonappealable judicial decision that such person
is not entitled to be indemnified for those expenses. Such provisions may have
the effect of preventing changes in our management.
Our Certificate of Incorporation also contains a provision eliminating
the liability of a director to us or our shareholders for monetary damages for
breach of fiduciary duty as a director, except to the extent such exemption from
liability or limitation thereof is not permitted by the Delaware General
Corporation Law. The inclusion of these provisions in our Certificate of
Incorporation may have the effect of reducing the likelihood of derivative
litigation against directors and may discourage or deter shareholders or
management from bringing lawsuits against directors for breach of their duty of
care, even though such an action, if successful, might otherwise have benefited
us and our shareholders.
Additionally, we have entered into director indemnification agreements
with all of our directors and our executive officers named in this prospectus
providing for indemnification and advancement of expenses in connection with
legal proceedings. We also maintain directors and officers liability insurance
for our officers and directors.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, we have been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to incorporate by
reference 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 part of this
prospectus. We incorporate by reference the documents listed below.
o Our Annual Report on Form 10-K for the year ended December 31,
2005, filed March 31, 2006, as amended on Form 10-K/A on April
27, 2006, on June 9, 2006 and on July 18, 2006
o Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2006, filed May 16, 2006, as amended on Form 10-Q/A on July 18,
2006
o Our Quarterly Report on Form 10-Q for the quarter ended June 30,
2006, filed August 14, 2006
o Our Current Report on Form 8-K filed June 9, 2006
o Our Current Report on Form 8-K filed March 27, 2006
22
o Our Current Report on Form 8-K filed March 21, 2006
o Our Preliminary Information Statement on Schedule 14C filed
August 7, 2006
o Our Definitive Information Statement on Schedule 14C filed August
18, 2006
o Our Definitive Proxy Statement on Schedule 14A filed April 12,
2006
o Our Registration Statement on Form 8-A/A filed July 26, 2005,
including any amendment or report filed for the purpose of
updating such description
A copy of these filings will be provided at no cost to each person,
including any beneficial owner, to whom a prospectus is delivered, upon request
by writing or orally to E. Joseph Grady, Senior Vice President and Chief
Financial Officer, at the following address: Crimson Exploration Inc., 480 N.
Sam Houston Parkway, Suite 300, Houston, Texas 770760, telephone number (281)
820-1919. These filings may also be accessed on our web site, the address of
which is www.crimsonexploration.com.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date on the front of those documents.
LEGAL MATTERS
The validity of the securities offered by this prospectus have been
passed upon for us by Akin Gump Strauss Hauer & Feld LLP, Houston, Texas.
EXPERTS
The financial statements and schedule of Crimson Exploration Inc. and
subsidiaries as of December 31, 2005 and 2004 and for the years then ended
incorporated by reference in this prospectus have been audited by Grant Thornton
LLP, independent registered public accountants as indicated in their reports
with respect thereto, and are incorporated herein in reliance upon the authority
of said firm as experts in accounting and auditing in giving said reports. The
consolidated statements of operations, stockholders' equity and cash flows of
Crimson Exploration Inc. for the year ended December 31, 2003 have been
incorporated by reference in this prospectus in reliance upon the report of
Weaver and Tidwell, L.L.P., independent registered public accountants, upon the
authority of said firm as experts in accounting and auditing.
23
CRIMSON EXPLORATION INC.
15,101,959 Shares
Common Stock
, 2006
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses to be paid by the Company in
connection with the offering described in this Registration Statement. All
amounts are estimates, except the Securities and Exchange Commission
Registration Fee.
SEC Registration Fee*................................... $924
Legal Fees and Expenses................................. 40,000
Accounting Fees and Expenses............................ 20,000
Miscellaneous........................................... 4,076
------------
Total.............................................. $65,000
============
* The registration fee was paid in connection with the
initial filing of the registration statement. No
additional fee is required in connection with this
post-effective amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits the
Registrant to indemnify directors, officers, employees or agents, or persons
serving in such capacity at the Registrant's request at another entity, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred, other than an action by or in the
right of the Registrant, to which such director, officer, employee or agent may
be a party, provided such person shall have acted in good faith and shall have
reasonably believed that his conduct was in or not opposed to the best interests
of the Registrant and, in the case of a criminal proceeding, that he had no
reasonable cause to believe his conduct was unlawful. In connection with an
action by or in the right of the Registrant against a director, officer,
employee or agent, the Registrant has the power to indemnify such director,
officer, employee or agent for actual and reasonable expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
suit (a) if such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interest of the Registrant, and (b)
if found liable to the Registrant, only if ordered by a court of law. Section
145 provides that such section is not exclusive of any other indemnification
rights granted by the Registrant to directors, officers, employees or agents.
The Delaware General Corporation law provides for mandatory indemnification of
directors and officers where such director or officer is successful on the
merits in the types of proceedings discussed above.
The Certificate of Incorporation and Bylaws of the Registrant provides
for mandatory indemnification of directors to the fullest extent authorized or
permitted by applicable law. The right to indemnification is a contract right
and includes the right to be paid by the Registrant the expenses incurred in
defending any such proceeding in advance of its final disposition. Our Bylaws
provide that, if the Delaware General Corporation Law requires, an advancement
of expenses incurred by a director in his capacity as a director or officer of
the Registrant may be made only upon delivery to the Registrant of an
undertaking to repay all advanced amounts if it is ultimately determined by
final nonappealable judicial decision that such person is not entitled to be
indemnified for those expenses.
The Certificate of Incorporation of the Registrant also contains a
provision eliminating the liability of a director to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except to the extent such exemption from liability or limitation thereof is not
permitted by the Delaware General Corporation Law.
II-1
The Registrant has obtained insurance on behalf of the Registrant and
its directors and officers individually against certain liabilities. In
addition, all of the Registrant's directors and executive officers have entered
into director indemnification agreements with our predecessor providing for
indemnification and advancement of expenses in connection with legal
proceedings, and, furthermore, the terms of the agreements providing for the
filing of this registration statement or inclusion of shares thereon by certain
of the selling shareholders provide for cross-indemnification of the selling
shareholders, on the one hand, and the Registrant, its directors and officers,
on the other hand, for liabilities arising under the Securities Act of 1933
relating to this registration statement.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM
REGISTERED SECURITIES.
As shown in the table that follows, during 2003, 2004 and 2005, we sold
preferred stock convertible to Common Stock, and also issued shares of Common
Stock, not registered under the Securities Act of 1933, as amended, and exempt
under Section 4(2) of the Act. Unless otherwise noted in this Item, we believe
that other issuances described in this Item would be private placements exempt
under Section 4(2) of the Act due to the nature of each transaction,
representations and warranties of such investors and/or the relationship of such
investors with us and their knowledge of the company, except for conversions and
exchanges of outstanding securities with our security holders referred to below,
which we believe are exempt from registration pursuant to Section 3(a)(9) of
Act. No underwriters were used, and no underwriting discounts or commissions
were paid in connection with the sales.
Shares/Exercise/
Underlying Conversion
Date Security Holder(s) Shares Price Consideration
---- -------- --------- ------ ----- -------------
06/12/03 Preferred
Stock Lender 1,000,000 $ 1.00 Loan Penalty
04/27/04 Preferred Accredited
Stock Investors 11,428,571 $ .35 $4,000,000
01/10/05 Warrants Lenders 50,000 $ 0.01 $200,000 Loan
01/21/05 Common
Stock Lender 29,100 N/A Loan Extension
01/21/05 Common Preferred
Stock Holders 356,250 N/A Settlement
02/28/05 Preferred Accredited
Stock Investor 45,000,000 $ .90 $40,500,000
2/28/05 Preferred Accredited
Stock Investor 2,857,143 $ .35 $ 1,500,000
From July 15, 2002 to February 12, 2003, we issued promissory notes to
two accredited investors in the total amount of $300,000, with interest at 8%
per annum and warrants to purchase a total of 100,000 shares of our Common Stock
at $.75 per share; a promissory note to one accredited investor in the total
amount of $300,000 with an original interest rate of 8% that increased to 12% on
January 1, 2003 and warrants to purchase 150,000 shares of our Common Stock at
an exercise price of $.75 per share; and a promissory note to a director in the
amount of $1,200,000, with interest at the prime rate and warrants to purchase
625,000 shares of our Common Stock at $.75 per share. In December 2002 we sold
9,000 shares of Series E Preferred Stock to a director for $800,000, the terms
of which were amended on February 28, 2005 to provide for, among other things, a
6% rather than $30 annual dividend, which may be deferred until 2009 by us.
II-2
On April 27, 2004, we completed an $18,000,000 financing package with
new energy lenders, resulting in the return to the Company of 2,000 shares of
Series F Preferred Stock with an aggregate liquidation preference of $1,000,000.
This preferred stock, at the request of the Company, was transferred by the
previous lender to a financial advisor to the Company and to two companies
affiliated with two directors of the Company in satisfaction of Company
obligations to them, and 140 of the 400 shares of Series F Preferred Stock held
by the financial advisor were transferred to three investors. In October 2004,
60 shares of Series F Preferred Stock had converted into 30,000 shares of Common
Stock. On December 22, 2004, 1,600 shares of Series F Preferred Stock held by
three investors converted to 800,000 shares of Common Stock, and on March 11 and
March 15, 2005, the remaining 340 shares of Series F Preferred Stock converted
to 170,000 shares of Common Stock. We issued the new lenders warrants to
purchase 2,035,621 shares of our Common Stock at an exercise price of $.01 per
share, expiring in five years, and on April 1 and April 4, 2005, the warrants
were exercised for an aggregate of 2,018,224 shares of Common Stock by
"cashless" exercise.
Simultaneously, GulfWest Oil & Gas Company completed the initial phase
of a private offering of its Series A Preferred Stock for $4,000,000. As part of
an advisory fee, we issued $500,000 of the Series A Preferred Stock to a
financial advisor. One of our former directors acquired $1,500,000 of the Series
A Preferred Stock. In October 2004, 50 shares of the Series A Preferred Stock
had been exchanged by one investor for 71,428 shares of our Common Stock. By
March 15, 2005, pursuant to a charter amendment, five holders holding 6,700
shares of Series A Preferred Stock had elected to exchange their shares of
Series A Preferred Stock for Series H Preferred Stock, convertible into common
stock on the same basis as the Series A Preferred Stock, and the remainder not
previously exchanged had converted into 4,642,859 shares of Common Stock. One
such holder affiliated with a director immediately elected, upon exchange of the
Series A Preferred Stock for Series H Preferred Stock on February 28, 2005, to
convert its 200 Series H shares to 285,715 shares of Common Stock, and on April
22, 2005 an additional 1,250 shares of Series H Preferred Stock converted into
approximately 1.8 million shares of Common Stock.
On January 7, 2005, we amended our April 2004 credit agreement to
extend the target date for repayment to February 28, 2005. We exercised this
option on January 26, 2005. We issued 29,100 shares of our Common Stock to our
lender on February 15, 2005 in an exempt private placement in connection with
this amendment.
On January 21, 2005 we issued 356,250 shares of Common Stock to certain
holders of the Series A Preferred Stock in settlement of a dispute regarding the
terms of the Series A Preferred Stock.
In January 2005, a current officer and another individual lent an
aggregate of $200,000 to us, which was repaid in full on February 28, 2005. In
connection with that loan we issued warrants to purchase 50,000 shares of our
common stock; on March 22, 2005 one of the individuals exercised his warrants
and received 20,000 shares of our Common Stock.
On February 28, 2005, we sold in a private placement, 81,000 shares of
our Series G Preferred Stock to OCM GW Holdings, LLC for an aggregate offering
price of $40.5 million. In addition, GulfWest Oil & Gas Company issued, in a
private placement, 2,000 shares of our Series A Preferred Stock, having a
liquidation preference of $1.0 million, to OCM GW Holdings, LLC for $1.5
million, which by March 15, 2005 had been exchanged for 2,000 shares of Series H
Preferred Stock pursuant to a charter amendment.
At the June 1, 2005 meeting of the Company's board of directors, each
non-employee director, B. James Ford, Skardon F. Baker, Lee B. Backsen and Lon
McCain, in accordance with our director compensation plan, was granted a
restricted stock award representing 17,045 shares of the Company's Common Stock.
However, B. James Ford and Skardon F. Baker elected not to receive such awards
and they were subsequently rescinded by the board of directors. On March 1,
2006, the Company's board of directors approved restricted stock awards
representing 262,334 shares of our Common Stock to our executive officers.
II-3
In connection with our acquisition of Core Natural Resources, Inc. in
March 2006, we issued 3,235,624 shares of our Common Stock to six shareholders
of the company. We also issued an additional 462,231 shares of Common Stock to a
Core shareholder as consideration for the assignment of a 2% overriding royalty
interest owned by that shareholder in the oil and gas leases.
II-4
ITEM 16 Exhibits and Financial Statement Schedules.
(a) The following documents are filed as part of this Registration
Statement:
Number Description
------ -----------
2.1 Agreement and Plan of Merger, dated March 14, 2006, among Crimson Exploration,
Inc., Crimson Exploration Operating, Inc., Core Natural Resources, Inc. and its
stockholders. (Previously filed with our Annual Report on Form 10-K for the
year ended December 31, 2005, File No. 000-21644 filed with the Commission on
March 31, 2006.)
3.1 Certificate of Incorporation of the Registrant. (Previously filed on our
current report on Form 8-K filed July 5, 2005.)
3.2 Certificate of Designation, Preferences and Rights of Series D Preferred
Stock. (Previously filed on our current report on Form 8-K filed July 5,
2005.)
3.3 Certificate of Designation, Preferences and Rights of Cumulative Convertible
Preferred Stock, Series E. (Previously filed on our current report on Form 8-K
filed July 5, 2005.)
3.4 Certificate of Designation, Preferences and Rights of Series G Convertible
Preferred Stock. (Previously filed on our current report on Form 8-K filed
July 5, 2005.)
3.5 Certificate of Designation, Preferences and Rights of Series H Convertible
Preferred Stock. (Previously filed on our current report on Form 8-K filed
July 5, 2005.)
3.6 Bylaws of the Registrant. (Previously filed on our current report on Form 8-K
filed July 5, 2005.)
4.1 Letter Agreement by and among GulfWest Energy Inc., a Texas corporation, GulfWest
Oil & Gas Company and the investors listed on the signature page thereof, dated April
22, 2004. (Previously filed with our Current Report on Form 8-K, dated April 29,
2004 and filed with the Commission on May 10, 2004.)
4.2 Warrant Agreement made by and between GulfWest Energy Inc., and
Highbridge/Zwirn Special Opportunities Fund, L.P., and Drawbridge Special
Opportunities Fund LP, Grantees, dated and effective April 29, 2004.
(Previously filed with our Current Report on Form 8-K dated April 29, 2004 and
filed with the Commission on May 10, 2004.)
4.3 Shareholders Rights Agreement between GulfWest Energy Inc. and OCM GW
Holdings, LLC dated February 28, 2005. (Previously filed with the Form 13D,
Reg. No. 005-54301, filed with the Commission on March 10, 2005.)
4.4 Omnibus and Release Agreement among GulfWest Energy Inc., OCM GW Holdings, LLC
and those signatories set forth on the signature page thereto, dated as of
February 28, 2005. (Previously filed with the Form 13D, Reg. No. 005-54301,
filed with the Commission on March 10, 2005.)
4.5 Share Transfer Restriction Agreement between J. Virgil Waggoner and OCM GW
Holdings, LLC, dated February 28, 2005. (Previously filed with the Form 13D,
Reg. No. 005-54301, filed with the Commission on March 10, 2005.)
4.6 Irrevocable Proxy executed by J. Virgil Waggoner dated February 28, 2005.
(Previously filed with our Annual Report on Form 10-K for the year ended
December 31, 2004, File No. 001-12108, filed with the Commission on March 31,
2005.)
II-5
4.7 Exchange Agreement between GulfWest Energy Inc. and GulfWest Oil & Gas Company, dated
February 28, 2005. (Previously filed with our Annual Report on Form 10-K for the year
ended December 31, 2004, File No. 001-12108, filed with the Commission on
March 31, 2005.)
4.8 Letter Agreement among OCM GW Holdings, LLC, OCM Principal Opportunities Fund III,
L.P., OCM Principal Opportunities Fund III GP, LLC, Oaktree Capital Management, LLC,
GulfWest Energy Inc., GulfWest Oil & Gas Company and J. Virgil Waggoner dated
February 28, 2005 (Previously filed with our Annual Report on Form 10-K for the year
ended December 31, 2004, File No. 001-12108, filed with the Commission on
March 31, 2005.)
4.9 Subscription Agreement among OCM GW Holdings, LLC, Allan D. Keel and those
individuals listed on the signature page thereto, dated February 28, 2005.
(Previously filed with the Form 13D, Reg.No. 005-54301, filed with the Commission on
March 10, 2005.)
4.10 First Amendment to Warrant Agreement among GulfWest Energy Inc., D.B. Zwirn
Special Opportunities Fund, L.P. and Drawbridge Special Opportunities Fund,
dated February 28, 2005. (Previously filed with our Annual Report on Form
10-K for the year ended December 31, 2004, File No. 001-12108, filed with the
Commission on March 31, 2005.)
4.11 Registration Rights Agreement, dated March 20, 2006, among Crimson Exploration
Inc. and the stockholders of Core Natural Resources, Inc. (Previously filed
with our Annual Report on Form 10-K, as amended, for the year ended December
31, 2005, File No. 000-21644 initially filed with the Commission on March 31,
2006.)
5.1* Opinion of Akin Gump Strauss Hauer & Feld LLP
10.1 Employment Agreement between Allan D. Keel and GulfWest Energy, Inc., dated
February 28, 2005. (Previously filed with our Annual Report on Form 10-K for
the year ended December 31, 2004, File No. 001-12108, filed with the
Commission on March 31, 2005.)
10.2 Employment Agreement between E. Joseph Grady and GulfWest Energy, Inc., dated
February 28, 2005. (Previously filed with our Annual Report on Form 10-K for
the year ended December 31, 2004, File No. 001-12108, filed with the
Commission on March 31, 2005.)
10.3 GulfWest Oil Company 1994 Stock Option and Compensation Plan, amended and
restated as of April 1, 2001 and approved by the shareholders on May 18,
2001. (Previously filed with our Proxy Statement on Form DEF 14A, filed with
the Commission on April 16, 2001.)
10.4 GulfWest Energy Inc. 2004 Stock Option Incentive Plan. (Previously filed with
our Annual Report on Form 10-K for the year ended December 31, 2004, File No.
001-12108, filed with the Commission on March 31, 2005.)
10.5 GulfWest Energy Inc. 2005 Stock Option Incentive Plan. (Previously filed with
our Annual Report on Form 10-K for the year ended December 31, 2004, File No.
001-12108, filed with the Commission on March 31, 2005.)
10.6 Form of 2005 Stock Incentive Plan Stock Option Agreement. (Previously filed
with our Annual Report on Form 10-K, as amended, for the year ended December
31, 2005, File No. 000-21644 initially filed with the Commission on March 31,
2006.)
10.7 Form of Warrant Agreement. (Previously filed with our Annual Report on Form
10-K for the year ended December 31, 2004, File No. 001-12108, filed with the
Commission on March 31, 2005.)
II-6
10.8 Form of Indemnification Agreement for directors and officers. (Previously
filed with our Form 8-K, Reg. No. 001-12108, filed with the Commission on July
21, 2005.)
10.9 Letter Agreement among D.B. Zwirn Special Opportunities Fund, LP, GulfWest Oil & Gas
Company, and Drawbridge Special Opportunities Fund, LP, dated January 7,
2005. (Previously filed with our Annual Report on Form 10-K for the year ended
December 31, 2004, File No. 001-12108, filed with the Commission on March 31,
2005.)
10.10 Series G Subscription Agreement between GulfWest Energy Inc. and OCM GW
Holdings, LLC dated February 28, 2005. (Previously filed with the Form 13D,
Reg. No. 005-54301, filed with the Commission on March 10, 2005.)
10.11 Series A Subscription Agreement between GulfWest Oil & Gas Company and OCW GW
Holdings, LLC dated February 28, 2005. (Previously filed with the Form 13D,
Reg. No. 005-54301, filed with the Commission on March 10, 2005.)
10.12 Letter Agreement between W.L. Addison Investment, L.L.C., GulfWest Energy
Inc., and Setex Oil and Gas Company dated February 24, 2005 extending Option
Agreement for the Purchase of Oil and Gas Leases dated March 5, 2004.
(Previously filed with our Annual Report on Form 10-K for the year ended
December 31, 2004, File No. 001-12108, filed with the Commission on March 31,
2005.)
10.13 Letter Agreement between W.L. Addison Investment, L.L.C., GulfWest Energy
Inc., and Setex Oil and Gas Company dated July 15, 2004 extending Option
Agreement for the Purchase of Oil and Gas Leases dated March 5, 2004.
(Previously filed with our Annual Report on Form 10-K for the year ended
December 31, 2004, File No. 001-12108, filed with the Commission on March 31,
2005.)
10.14* Oil and Gas Property Acquisition, Exploration and Development Agreement with
Summit Investment Group-Texas, L.L.C. effective December 1, 2001.
10.15* Credit Facility between GulfWest Energy Inc. and Highbridge/Zwirn Special
Opportunities Fund, L.P., and Drawbridge Special Opportunities Fund LP,
Grantees, dated and effective April 29, 2004.
10.16* Employment Agreement between Tracy Price and GulfWest Energy Inc., dated April
1, 2005.
10.17* Employment Agreement between Tommy Atkins and GulfWest Energy Inc., dated
April 1, 2005.
10.18* Employment Agreement between Jay S. Mengle and GulfWest Energy Inc., dated
April 1, 2005.
10.19* Employment Agreement between Thomas R. Kaetzer and GulfWest Energy Inc., dated
April 1, 2005.
10.20* Summary terms of June 2005 Director Compensation Plan.
10.21 Credit Agreement, dated July 15, 2005, among Crimson Exploration Inc., Wells
Fargo, N.A., as agent and a lender, and each lender from time to time a party
thereto. (Previously filed with our Form 8-K, Reg. No. 001-12108, filed with
the Commission on July 21, 2005.)
10.22 Form of director restricted stock grant. (Previously filed with our Form 8-K,
Reg. No. 001-12108, filed with the Commission on July 21, 2005.)
II-7
10.23 First Amendment to Credit Agreement, dated as of March 6, 2006, among Crimson
Exploration, Inc., Crimson Exploration Operating, Inc., LTW Pipeline Co., and
Wells Fargo Bank, National Association. (Previously filed with our Annual
Report on Form 10-K for the year ended December 31, 2005, File No. 000-21644
filed with the Commission on March 31, 2006.)
21.1* Subsidiaries of the Registrant.
23.1 Consent of Akin Gump Strauss Hauer & Feld LLP. (Included in Exhibit 5.1.)
23.2** Consent of Grant Thornton LLP
23.3** Consent of Weaver and Tidwell, L.L.P.
25* Power of Attorney
* Previously Filed
**Filed Herewith
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That, for the purpose of determining liability under the Securities
Act of 1933 to any purchaser each prospectus filed pursuant to Rule 424(b) as
part of a registration statement relating to an offering, other than
registration statements relying on Rule 430B or other prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such date of first use.
II-8
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-9
S I G N A T U R E S
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Post Effective Amendment No. 4 to this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on the 23rd day of
August 2006.
CRIMSON EXPLORATION INC.
By: /s/ Allan D. Keel
-------------------------------------------
Allan D. Keel, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Post
Effective Amendment No. 4 to the Registration Statement has been signed below by
the following persons and in the capacities and on the dates indicated.
Signature Title Date
/s/ Allan D. Keel President, Chief Executive
--------------------------------- Officer and Director August 23, 2006
Allan D. Keel
/s/ E. Joseph Grady Senior Vice President and Chief
--------------------------------- Financial Officer August 23, 2006
E. Joseph Grady
/s/ Richard L. Creel Vice President of Finance and
--------------------------------- Controller August 23, 2006
Richard L. Creel
/s/ B. James Ford* Director August 23, 2006
---------------------------------
B. James Ford
/s/ Skardon F. Baker* Director August 23, 2006
---------------------------------
Skardon F. Baker
/s/ Lee B. Backsen* Director August 23, 2006
---------------------------------
Lee B. Backsen
/s/ Lon McCain* Director August 23, 2006
---------------------------------
Lon McCain
*By:/s/ Allan D. Keel
----------------
Allan D. Keel
Attorney-in-fact
pursuant to a power of
attorney previously filed
II-10
Index to Exhibits
The following documents are filed as part of this Registration Statement:
Number Description
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2.1 Agreement and Plan of Merger, dated March 14, 2006, among Crimson Exploration,
Crimson Inc., Crimson Exploration Operating, Inc., Core Natural Resources, Inc. and its
stockholders. (Previously filed with our Annual Report on Form 10-K for the
year ended December 31, 2005, File No. 000-21644 filed with the Commission on
March 31, 2006.)
3.1 Certificate of Incorporation of the Registrant. (Previously filed on our
current report on Form 8-K filed July 5, 2005.)
3.2 Certificate of Designation, Preferences and Rights of Series D Preferred
Stock. (Previously filed on our current report on Form 8-K filed July 5,
2005.)
3.3 Certificate of Designation, Preferences and Rights of Cumulative Convertible
Preferred Stock, Series E. (Previously filed on our current report on Form 8-K
filed July 5, 2005.)
3.4 Certificate of Designation, Preferences and Rights of Series G Convertible
Preferred Stock. (Previously filed on our current report on Form 8-K filed
July 5, 2005.)
3.5 Certificate of Designation, Preferences and Rights of Series H Convertible
Preferred Stock. (Previously filed on our current report on Form 8-K filed
July 5, 2005.)
3.6 Bylaws of the Registrant. (Previously filed on our current report on Form 8-K
filed July 5, 2005.)
4.1 Letter Agreement by and among GulfWest Energy Inc., a Texas corporation, GulfWest
Oil & Gas Company and the investors listed on the signature page thereof, dated April
22, 2004. (Previously filed with our Current Report on Form 8-K, dated April 29,
2004 and filed with the Commission on May 10, 2004.)
4.2 Warrant Agreement made by and between GulfWest Energy Inc., and
Highbridge/Zwirn Special Opportunities Fund, L.P., and Drawbridge Special
Opportunities Fund LP, Grantees, dated and effective April 29, 2004.
(Previously filed with our Current Report on Form 8-K dated April 29, 2004 and
filed with the Commission on May 10, 2004.)
4.3 Shareholders Rights Agreement between GulfWest Energy Inc. and OCM GW
Holdings, LLC dated February 28, 2005. (Previously filed with the Form 13D,
Reg. No. 005-54301, filed with the Commission on March 10, 2005.)
4.4 Omnibus and Release Agreement among GulfWest Energy Inc., OCM GW Holdings, LLC
and those signatories set forth on the signature page thereto, dated as of
February 28, 2005. (Previously filed with the Form 13D, Reg. No. 005-54301,
filed with the Commission on March 10, 2005.)
4.5 Share Transfer Restriction Agreement between J. Virgil Waggoner and OCM GW
Holdings, LLC, dated February 28, 2005. (Previously filed with the Form 13D,
Reg. No. 005-54301, filed with the Commission on March 10, 2005.)
4.6 Irrevocable Proxy executed by J. Virgil Waggoner dated February 28, 2005.
(Previously filed with our Annual Report on Form 10-K for the year ended
December 31, 2004, File No. 001-12108, filed with the Commission on March 31,
2005.)
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4.7 Exchange Agreement between GulfWest Energy Inc. and GulfWest Oil & Gas Company, dated
February 28, 2005. (Previously filed with our Annual Report on Form 10-K for the year
ended December 31, 2004, File No. 001-12108, filed with the Commission on
March 31, 2005.)
4.8 Letter Agreement among OCM GW Holdings, LLC, OCM Principal Opportunities Fund III,
L.P., OCM Principal Opportunities Fund III GP, LLC, Oaktree Capital Management, LLC,
GulfWest Energy Inc., GulfWest Oil & Gas Company and J. Virgil Waggoner dated
February 28, 2005 (Previously filed with our Annual Report on Form 10-K for the year
ended December 31, 2004, File No. 001-12108, filed with the Commission on
March 31, 2005.)
4.9 Subscription Agreement among OCM GW Holdings, LLC, Allan D. Keel and those
individuals listed on the signature page thereto, dated February 28, 2005.
(Previously filed with the Form 13D, Reg.No. 005-54301, filed with the Commission on
March 10, 2005.)
4.10 First Amendment to Warrant Agreement among GulfWest Energy Inc., D.B. Zwirn
Special Opportunities Fund, L.P. and Drawbridge Special Opportunities Fund,
dated February 28, 2005. (Previously filed with our Annual Report on Form
10-K for the year ended December 31, 2004, File No. 001-12108, filed with the
Commission on March 31, 2005.)
4.11 Registration Rights Agreement, dated March 20, 2006, among Crimson Exploration
Inc. and the stockholders of Core Natural Resources, Inc. (Previously filed
with our Annual Report on Form 10-K, as amended, for the year ended December
31, 2005, File No. 000-21644 initially filed with the Commission on March 31,
2006.)
5.1* Opinion of Akin Gump Strauss Hauer & Feld LLP
10.1 Employment Agreement between Allan D. Keel and GulfWest Energy, Inc., dated
February 28, 2005. (Previously filed with our Annual Report on Form 10-K for
the year ended December 31, 2004, File No. 001-12108, filed with the
Commission on March 31, 2005.)
10.2 Employment Agreement between E. Joseph Grady and GulfWest Energy, Inc., dated
February 28, 2005. (Previously filed with our Annual Report on Form 10-K for
the year ended December 31, 2004, File No. 001-12108, filed with the
Commission on March 31, 2005.)
10.3 GulfWest Oil Company 1994 Stock Option and Compensation Plan, amended and
restated as of April 1, 2001 and approved by the shareholders on May 18,
2001. (Previously filed with our Proxy Statement on Form DEF 14A, filed with
the Commission on April 16, 2001.)
10.4 GulfWest Energy Inc. 2004 Stock Option Incentive Plan. (Previously filed with
our Annual Report on Form 10-K for the year ended December 31, 2004, File No.
001-12108, filed with the Commission on March 31, 2005.)
10.5 GulfWest Energy Inc. 2005 Stock Option Incentive Plan. (Previously filed with
our Annual Report on Form 10-K for the year ended December 31, 2004, File No.
001-12108, filed with the Commission on March 31, 2005.)
10.6 Form of 2005 Stock Incentive Plan Stock Option Agreement. (Previously filed
with our Annual Report on Form 10-K, as amended, for the year ended December
31, 2005, File No. 000-21644 initially filed with the Commission on March 31,
2006.)
10.7 Form of Warrant Agreement. (Previously filed with our Annual Report on Form
10-K for the year ended December 31, 2004, File No. 001-12108, filed with the
Commission on March 31, 2005.)
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10.8 Form of Indemnification Agreement for directors and officers. (Previously
filed with our Form 8-K, Reg. No. 001-12108, filed with the Commission on July
21, 2005.)
10.9 Letter Agreement among D.B. Zwirn Special Opportunities Fund, LP, GulfWest Oil & Gas
Company, and Drawbridge Special Opportunities Fund, LP, dated January 7,
2005. (Previously filed with our Annual Report on Form 10-K for the year ended
December 31, 2004, File No. 001-12108, filed with the Commission on March 31,
2005.)
10.10 Series G Subscription Agreement between GulfWest Energy Inc. and OCM GW
Holdings, LLC dated February 28, 2005. (Previously filed with the Form 13D,
Reg. No. 005-54301, filed with the Commission on March 10, 2005.)
10.11 Series A Subscription Agreement between GulfWest Oil & Gas Company and OCW GW
Holdings, LLC dated February 28, 2005. (Previously filed with the Form 13D,
Reg. No. 005-54301, filed with the Commission on March 10, 2005.)
10.12 Letter Agreement between W.L. Addison Investment, L.L.C., GulfWest Energy
Inc., and Setex Oil and Gas Company dated February 24, 2005 extending Option
Agreement for the Purchase of Oil and Gas Leases dated March 5, 2004.
(Previously filed with our Annual Report on Form 10-K for the year ended
December 31, 2004, File No. 001-12108, filed with the Commission on March 31,
2005.)
10.13 Letter Agreement between W.L. Addison Investment, L.L.C., GulfWest Energy
Inc., and Setex Oil and Gas Company dated July 15, 2004 extending Option
Agreement for the Purchase of Oil and Gas Leases dated March 5, 2004.
(Previously filed with our Annual Report on Form 10-K for the year ended
December 31, 2004, File No. 001-12108, filed with the Commission on March 31,
2005.)
10.14* Oil and Gas Property Acquisition, Exploration and Development Agreement with
Summit Investment Group-Texas, L.L.C. effective December 1, 2001.
10.15* Credit Facility between GulfWest Energy Inc. and Highbridge/Zwirn Special
Opportunities Fund, L.P., and Drawbridge Special Opportunities Fund LP,
Grantees, dated and effective April 29, 2004.
10.16* Employment Agreement between Tracy Price and GulfWest Energy Inc., dated April
1, 2005.
10.17* Employment Agreement between Tommy Atkins and GulfWest Energy Inc., dated
April 1, 2005.
10.18* Employment Agreement between Jay S. Mengle and GulfWest Energy Inc., dated
April 1, 2005.
10.19* Employment Agreement between Thomas R. Kaetzer and GulfWest Energy Inc., dated
April 1, 2005.
10.20* Summary terms of June 2005 Director Compensation Plan.
10.21 Credit Agreement, dated July 15, 2005, among Crimson Exploration Inc., Wells
Fargo, N.A., as agent and a lender, and each lender from time to time a party
thereto. (Previously filed with our Form 8-K, Reg. No. 001-12108, filed with
the Commission on July 21, 2005.)
10.22 Form of director restricted stock grant. (Previously filed with our Form 8-K,
Reg. No. 001-12108, filed with the Commission on July 21, 2005.)
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10.23 First Amendment to Credit Agreement, dated as of March 6, 2006, among Crimson
Exploration, Inc., Crimson Exploration Operating, Inc., LTW Pipeline Co., and
Wells Fargo Bank, National Association. (Previously filed with our Annual
Report on Form 10-K for the year ended December 31, 2005, File No. 000-21644
filed with the Commission on March 31, 2006.)
21.1* Subsidiaries of the Registrant.
23.1 Consent of Akin Gump Strauss Hauer & Feld LLP. (Included in Exhibit 5.1.)
23.2** Consent of Grant Thornton LLP
23.3** Consent of Weaver and Tidwell, L.L.P.
25* Power of Attorney
* Previously Filed
**Filed Herewith
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