SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
December 17, 2007
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Date of Earliest Reported Event
AMEN PROPERTIES, INC.
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(Exact name of registrant as specified in its Charter)
Delaware
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(State or other jurisdiction of incorporation)
000-22847
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(Commission File Number)
54-1831588
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(IRS Employer Identification No.)
303 W. Wall Street, Suite 2300
Midland, Texas 79701
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(Address of principal executive offices) (Zip Code)
(432) 684-3821
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(Registrant's telephone number, including area code)
NA
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(Former Name or Former Address, if Changed Since Last Report)
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
FORM 8-K
Item 1.01 - Entry into Material Definitive Agreement
See discussion of agreements under Item 2.01 below.
Item 2.01 - Completion of Acquisition or Disposition of Assets On December 17,
2007 Amen Properties, Inc. (the "Company") completed the acquisition of all of
the net profits royalties owned by Santa Fe Energy Trust (the "Trust") in
accordance with the previously reported Purchase and Sale Agreement (the "Trust
Agreement") which was entered into on November 8, 2007 with Bank of New York
Trust Company, N. A., the trustee of the Trust. Under the terms of Trust
Agreement, the Company purchased assets consisting of the Trust's interests in
certain royalty interests and working interests in oil and gas properties
located in a number of different states. The Trust Agreement provided for an
adjustment to the purchase price for changes in commodity prices between the
date of the Trust Agreement signing and the closing date. After these
adjustments, the final purchase price paid to the Trust was $50.5 million.
The Company owns 139,500 units of the Trust and is part of an affiliated
ownership group, which includes certain of the Company's officers and directors,
that owns 701,393 units of the Trust, approximately 11% of the outstanding
units. The Company will continue to receive regular distributions from the Trust
as a result of its unit ownership until the Trust's liquidation on or before
February 15, 2008.
Additionally, on December XX, 2007 the Company completed the acquisition of the
royalty and working interests of Devon Energy Production Company, L.P. ("Devon")
in the properties subject to the Trust's net profits royalty in accordance with
the previously reported Purchase and Sale Agreement (the "Devon Agreement")
which was entered into on November 8, 2007. The final purchase price paid to
Devon for its interests, after applicable adjustments, was $5.6 million.
Both the Trust Agreement and the Devon Agreement were amended to add an
independent third party as the purchaser of $27 million of the acquired
interests. After this purchase, the net purchase price paid for the remaining
interests was $29.1 million.
The Company has instructed the sellers to convey the remaining interests into
two new entities: the royalty interests will be conveyed to SFF Royalty, LLC and
the working interests will be conveyed to SFF Production, LLC. In exchange for
contributing $10 million in capital, the Company will receive a one third
ownership interest in these new entities. The remaining ownership of the new
entities will be divided amongst the acquisition investment group
proportionately based on the percentage of capital provided. The investment
group and management group of the new entities includes two of the Company's
directors, Eric Oliver and Jon Morgan. Additionally, the two new entities have
entered into a management agreement with Anthem Oil and Gas, Inc. to manage the
interests in exchange for compensation equal to 5% of the gross proceeds. One of
the Company's directors, Jon Morgan, is the president of Anthem Oil and Gas.
The Company paid for $840,000 of its capital contribution to the new entities in
cash. An additional $2.2 million was secured via stub financing provided by
Softvest, LP until the Company is able to liquidate a portion of its investment
in the Trust, which is expected to occur by the end of 2007. One of the
Company's directors, Eric Oliver, is the Managing Partner of Softvest, LP. The
remaining $7 million was financed via a combination of equity and debt. The
Company has entered into a Securities Purchase and Note Agreement (the
"Securities Agreement") that provides for the issuance of $4.3 million in Series
D Preferred Stock and $2.7 million in short-term debt. The Series D Preferred
Stock is non-convertible, has limited voting rights and is entitled to a
dividend of eight and one half percent annually. Additionally, the Series D
Preferred Stockholders will be allowed to designate up to two additional members
of the Company's Board of Directors. The holders of the short term debt received
450,000 warrants which allow them to purchase the Company's common stock at a
price of $6.02, which was the closing price on the day the Trust Agreement and
Devon Agreement were signed. The Securities Agreement provides that the warrants
will expire if not exercised by June 30, 2008 and the Company anticipates that
the proceeds will be used to retire the related debt. Two of the Company's
directors, Eric Oliver and Bruce Edgington, provided a portion of the Company's
financing and are parties to the Securities Agreement, for which they will
receive a portion of the preferred stock and warrants described above. Pursuant
to NASDAQ regulations, the issuance of common stock upon exercise of the
warrants issued under this Securities Agreement will require shareholder
approval. The Company intends to seek such shareholder approval at either a
special meeting called for that purpose or at the next annual shareholder
meeting. The Company has received agreements to vote in favor of the approval of
these warrants from shareholders representing over 50.1% of the outstanding
shares.
Item 3.02 - Unregistered Sales of Equity Securities
See discussion of the issuance of the Series D Preferred Stock and the warrants
in Item 2.01.
Item 5.03 - Amendments to Articles of Incorporation or Bylaws Change in Fiscal
Year
The filing of the Certificate of Designation of Series and Designation of Rights
and Preferences of the Series D Preferred Stock of Amen Properties, Inc. (the
"Certificate of Designation") with the Delaware Secretary of State on December
17, 2007 constituted an amendment to the Company's Certificate of Incorporation,
designating the terms, rights and preferences of a new series of preferred stock
of the Company.
Item 9.01 - Financial Statements and Exhibits
(a) Financial Statements
Financial Information is currently unavailable and is not
included with this filing. The Company expects to have assembled
the required financial information within the required filing
period.
(b) Pro Forma Financial Information
Pro Forma Financial Information is currently unavailable and is
not included with this filing. The Company expects to have
assembled the required pro forma financial information within the
required filing period.
(c) Exhibits
3.1 - Certificate of Designation of Rights and Preferences
of the Series D Preferred Stock of Amen Properties,
Inc. (attached as an Exhibit to Exhibit 10.5 hereto)
4.1 - Form of Warrant (attached as an Exhibit to Exhibit
10.5 hereto)
10.1 - Amendment to Trust Agreement (Redacted)
10.2 - Amendment to Devon Agreement (Redacted)
10.3 - SFF Royalty, LLC Operating Agreement
10.4 - SFF Production, LLC Operating Agreement
10.5 - Amen Properties Securities Purchase and Note Agreement
10.6 - Amen Properties Promissory Note to Softvest, LP
99.1 - Amen Properties Press Release
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMEN Properties, Inc.
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(Registrant)
By: /s/ Jon M Morgan
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Date: December 18, 2007 Jon M Morgan, Chief Executive Officer
(Signature)