Greka Energy Corp – ‘8-K/A’ for 3/15/99

On:  Monday, 6/7/99, at 5:35pm ET   ·   For:  3/15/99   ·   Accession #:  1076636-99-74   ·   File #:  0-20760   ·   Correction:  This Filing’s “Filed as of” Date was Corrected and “Changed as of” 6/10/99 by the SEC on 6/10/99. ®

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Amendment to Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K/A       Amendment to Current Report                            6±    23K 

Document Table of Contents

SECURITIES AND EXCHANGE COMMISSION    

Washington, D.C.  20549   

FORM 8-K/A  

CURRENT REPORT    

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934  

Date of Report (Date of earliest event reported): March 15, 1999  

GREKA Energy Corporation      
(Exact name of registrant as specified in its charter)  

  Colorado                  0-20760                     84-1091986
(State or other jurisdiction     (Commission                 (IRS Employer      
    of incorporation)          File Number)              Identification No.)

630 Fifth Avenue, Suite 1501                                                    
New York, NY                                                      10111         
(Address of principal executive offices)                        (Zip Code)      

Registrant's telephone number, including area code: (212) 218-4680              

Horizontal Ventures, Inc.   
   (Former name or former address, if changed since last report)

Item 2.   Acquisition or Disposition of Assets.                                 

This amendment includes the required proforma financial information for the     
acquisition of Saba Petroleum Company at Item 7(b).                             

Item 7.   Financial Statements and Exhibits.                                    

(b)   The pro forma financial statements of the registrant giving       
  effect to the acquisition of Saba are included in this report.

The following unaudited proforma consolidated statements of operations for the  
year ended December 31, 1998, and for the three months ended March 31, 1999,    
are derived from the historical statements of Greka Energy Corporation          
("Company") and Saba Petroleum Company ("Saba"). Each statement of operations   
reflects the Company's acquisition of Saba, which became effective on March     
24, 1999, as if the transaction took place at the beginning of 1998.            

The unaudited proforma financial information should be read in conjunction      
with the notes thereto and the Consolidated Financial Statements of the         
Company previously filed with the Securities and Exchange Commission.  The      
proforma consolidated statements of operations do not purport to be indicative  
of the results of operations that would actually have been reported if the      
acquisition had been in effect for the periods presented.  In addition, future  
results may vary significantly from the results reflected in the proforma       
statements due to the Company's assumption of the marketing and distribution    
operations of Saba's asphalt refinery in Santa Maria, California, hydrocarbon   
production declines, changes in prices received for the sale of produced        
hydrocarbons, future acquisitions and dispositions of producing oil and gas     
properties, changes in estimates of proved reserves and other factors.          

The unaudited proforma consolidated statements of operations reflect the        
application of the purchase method of accounting.  Under this method of         
accounting, the purchase price of the acquisition, measured by the closing      
price of the Company's Common Stock on March 24, 1999, was allocated to the     
assets acquired and liabilities assumed based on their estimated fair value at  
the time of closing of the merger.  See the Company's March 31, 1999 Form       
10-QSB for further information. Changes to the adjustments included in the      
proforma consolidated statements of operations may occur as additional          
information becomes available during the year 1999.                             

      GREKA ENERGY CORPORATION

                                                                [Download Table]


Pro-Forma Consolidated Statement of Operations                                
For the Year Ended December 31, 1998                                          
(Unaudited)                                                                   

                                HVI         Saba      Proforma                
                            Historical   Historical  adjustments    Proforma  
                                                                              
Revenues                                                                      
  Oil and gas sales        $87,663    $19,706,232                $19,793,895  
  Other                     58,150      3,625,099                  3,683,249  
                           ___________________________________     __________ 
           Total revenues  145,813    23,331,331                  23,477,144  
                           ___________________________________     __________ 
Expenses:                                                                     
  Production cost          121,016    13,608,466                  13,729,482  
  General and                                                                 
   administrative        1,541,789     6,529,961                   8,071,750  
  Depletion, depreciation                                                     
   and amortization        333,468     7,124,269 (2,615,640)   1    4,842,097 
  Writedown of oil                                                            
   and gas properties    3,171,485    20,092,850 (20,092,850)  1    3,171,485 
                         ____________________________________      __________ 
         Total expenses  5,167,758    47,355,546 (22,708,490)      29,814,814 
                         ____________________________________      __________ 

  Operating loss        (5,021,945)  (24,024,215) 22,708,490       (6,337,670)
                         ____________________________________________________ 

Other income (expense)                                                        
  Interest income           83,242       137,842                      221,084 
  Other                      9,223      (402,495)                    (393,272)
  Interest expense         (32,145)   (3,589,332)   (118,250)   3  (3,739,727)
  Equity in loss of Saba   (586,020)           0     586,020    2           0 
                         _____________________________________      _________ 
       Total other                                                            
        income (expense)   (525,700)  (3,853,985)    467,770       (3,911,915)
                         _____________________________________      _________ 

       Loss before                                                            
        income taxes     (5,547,645) (27,878,200) 23,176,260      (10,249,585)

Provision for taxes on                                                        
 income                           0     (887,050)    (31,150)   4    (918,200)
Minority interest in                                                          
 loss of consolidated                                                         
 subsidiary                              114,427                      114,427 
                          ____________________________________    ___________ 
       Net loss           (5,547,645) (28,650,823) 23,145,110     (11,053,358)

Other comprehensive                                                           
 loss-net of tax                                                              
  Foreign currency                                                            
   translation adjustments         0     (151,720)                   (151,720)
                          ____________________________________    ___________ 

       Comprehensive                                                          
        loss             $(5,547,645)$(28,802,543)$23,145,110    $(11,205,078)
                          ====================================    =========== 

Net loss per Common Share     $(3.42)                                  $(2.67)
  Basic and diluted         =========                                 ======= 

Weighted average Common Shares                                                
 outstanding                                                                  
  Basic and diluted        1,621,483                                4,200,988 
                          ==========                                ========= 


See accompanying notes to proforma consolidated statement of operations.

a. record depreciation on stepped-up value of refinery:                   
(31,119,000-2,123,016)/25/4=289,960                                 

b. record depletion change on decrease in oil and gas properties (in      
total): (29,444,658-32,238,022) * .02 = (55,870)                    

c. reverse equity loss from investment in Saba                            

Pro-forma P&L                                                                   

For the Three Months Ended March 31, 1998                                       

                                                                [Download Table]
                                                   P/F                    
                               HVI       Saba      adj's        Proforma  
                                                                          
 Revenues                     34,689   6,473,469                6,508,158 
                              ___________________________       __________
 Production costs             34,172  3,704,877                 3,739,049 
 G&A                         354,547  1,622,802                 1,977,349 
 DD&A                         38,868  2,019,409   (27,930) a, b 2,030,347 
 Ceiling test writedown              10,700,000 (10,700,000) c            
                             ______________________________     __________
   Total                     427,587 18,047,088 (10,727,930)    7,746,745 
                             ______________________________     __________

 Operating loss             (392,898)(11,573,619) 10,727,930   (1,238,587)
 Other income/(expense)       34,594    (671,200)                (636,606)
                             _______________________________    __________
 Pre-tax loss               (358,304)(12,244,819) 10,727,930   (1,875,193)
 Tax (provision) benefit           0     221,618           0      221,618 
 Minority interest                 0       6,701                    6,701 
                             ________________________________   __________
 Net loss                   (358,304)(12,016,500) 10,727,930   (1,646,874)
                             ================================= ===========

 Per share                                                        (0.3932)
                                                                ==========

   Weighted average shares o/s                                            
     at 12-31-97                       1,558,843                          
     issued for Saba acq.              2,630,000                4,188,843 
                                                                ==========

a.  record depreciation on stepped-up value of refinery:              
(31,119,000-2,084,041)/25/4=290,350                           

b.  record depletion change on decrease in oil and gas properties (in 
total): (29,444,658-45,358,568) * .02 = (318,280)             

c.  reverse Saba writedown as properties would be restated via merger 

Saba NBV at 3/31/98:                                  
Refinery, excluding land              2,084,041 
Oil and gas properties   79,205,396             
                       (33,846,828) 45,358,568

GREKA ENERGY CORPORATION                                                        

NOTES TO UNAUDITED PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS               

The accompanying unaudited proforma statements of operations  have been         
prepared to reflect the following adjustments to the historical statements of   
the Company and Saba Petroleum Company ("Saba").                                

Unaudited Proforma Consolidated Statement of Operations for the Year Ended      
December 31, 1998:                                                              

1.  Adjustments to 1) remove cost depletion ($6,379,835) and ceiling test       
impairment ($20,092,850) amounts reported by Saba during the year, 2) to
record cost depletion ($2,605,000) for Saba's oil and gas properties    
applied to the adjusted basis of Saba's properties using the purchase   
method of accounting and 3) to record additional depreciation expense   
 ($1,159,195) attributable to increase in basis of Saba's asphalt refinery
using the purchase method of accounting.                                

2.  Adjustment to remove the Company's reported equity loss in Saba ($586,020)  
in 1998.                                                                

3.  Adjustments to record 1) additional interest expense ($82,500) due to       
 issuance of IPH note payable in the amount of $1.5 million, with interest
at 6%, as if such note had been issued on  January 1, 1998, and 2)      
  accretion of debt discount ($35,750)  attributable to $286,000 discount of
Saba debentures that have been -------------at fair value using the     
purchase method of accounting.                                          

4.  Adjustment to record additional income tax provision ($31,150)              
attributable to Colombia operations as a result of proforma adjustments 
that decreased the historical depletion and therefore increased the pre-
tax income of such operations.                                          

Proforma Consolidated Statement of Operations for the Three Months Ended March  
31, 1999:                                                                       

1.  Adjustments to 1) remove cost depletion ($1,315,618) reported by Saba       
  during the period, 2) to record cost depletion ($1,259,748) for Saba's oil
and gas properties applied to the adjusted basis of Saba's properties   
using the purchase method of accounting and 3) to record additional     
depreciation expense ($289,960) attributable to increase in basis of    
Saba's asphalt refinery using the purchase method of accounting.        

2.  Adjustment to remove the Company's reported equity loss in Saba ($553,483)  
during the period.                                                      

3.  Adjustment to record accretion of debt discount ($8,940) attributable to    
$286,000 discount of Saba debentures that have been ------------at fair 
value using the purchase method of accounting.                          

(c)   The following exhibits are furnished as part of this report:      

*    Exhibit 3.1    Articles of Amendment to Articles of Incorporation
effective March 22, 1999.     

*    Exhibit 99.1   Press release of GREKA Energy Corporation and     
Saba dated March 22, 1999.    

*Previously filed.                                                              

SIGNATURE 

  Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the        
undersigned hereunto duly authorized.                                           

Date: June 7, 1999                   GREKA ENERGY CORPORATION                   

                   /s/ Randeep S. Grewal
                                 By: ___________________________________
                                    Randeep S. Grewal, Chairman, Chief
                                 Executive Officer and President

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘8-K/A’ Filing		Date		Other Filings
Changed as of / Corrected on:		6/10/99
Filed on:		6/7/99
		3/31/99		10QSB,  NT 10-K,  NT 10-Q
		3/24/99
		3/22/99
For Period End:		3/15/99		8-K,  8-K/A
		12/31/98		10KSB/A,  10KSB40,  10KSB40/A,  4,  DEF 14A,  NT 10-K
		3/31/98		10QSB,  4,  NT 10-K
		1/1/98
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