8-K 1 a4340597.txt VENUS EXPLORATION 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 31, 2003 VENUS EXPLORATION, INC. (Exact name of registrant specified in its charter) Delaware (State of incorporation) 0-14334 13-3299127 (Commission File Number) (IRS Employer Identification No.) 1250 N.E. LOOP 410 SUITE 205 SAN ANTONIO, TEXAS 78209 (Address of Registrant's principal executive offices) Registrant's telephone number, including area code: (210) 930-4900 Not Applicable (Former name or former address, if changed since last report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On January 31, 2003, Venus Exploration, Inc. (the "Company") completed the sale of its interest in certain leases, lands and wells in the Constitution Field in Jefferson County, Texas. The purchaser was Samson Lone Star Limited Partnership ("Samson"). The properties sold included interests in four wells, together with certain oil, gas and mineral leases and other agreements relating to properties located in the Constitution Field. The purchase price of $2,115,000 was based on arm's length negotiations between the parties, taking into account a number of considerations, including the location of the properties, the prices be paid for production from those wells, the production rates and the costs of production. After certain adjustments required pursuant to the Purchase and Sale Agreement dated January 15, 2003, by and between the Company and Samson, the Company received net sales proceeds of approximately $1,658,000. The sale to Samson was closed pursuant to an order of the United States Bankruptcy Court for the Eastern District of Texas, Beaumont Division. Pursuant to the bankruptcy court's order, except for approximately $146,000 which was applied by the Company to the payment of ad valorem taxes, all of the proceeds from the sale to Samson have been placed in escrow pending further authorization of the bankruptcy court. ITEM 5. OTHER EVENTS On November 21, 2002, the Company closed on the sale of a development drilling project in the Hansford Field, Hansford County, Texas, under which the Company retained a 5% carried working interest on the first three wells to be drilled, which interest increases to a 15% working interest after payout of all costs of the first three new wells to be drilled. The initial well under this drilling program was drilled to a total depth of 7,840 feet on February 3, 2003, where production casing was run to attempt completion in at least 3 different prospective gas reservoirs which are possibly gas productive according to evaluation of electric logs and other open hole data. The Company received net cash proceeds of approximately $400,000 in connection with the Hansford Field sale. John Y. Ames, President, Chief Operating Officer and a Director of the Company, resigned effective January 31, 2002, from his positions as the Company's President and Chief Operating Officer; however, Mr. Ames continues to serve as a Director of the Company and to perform certain services as a consultant to the Company. Effective December 23, 2002, the Board of Directors appointed Will C. Jones, IV to serve as Director of the Company. Mr. Jones is the son-in-law of Chairman, Chief Executive Officer and Director Eugene L. Ames, Jr., and the brother-in-law of Director John Y. Ames. He is currently a shareholder of Earl & Brown, P.C. Mr. Jones and Earl & Brown, P.C. provide legal counsel to the Company. In 2002, the Company paid Earl & Brown, P.C. in excess of $60,000 for such services. A hearing in the United States Bankruptcy Court for the Eastern District of Texas, Beaumont Division, originally scheduled for January 21, 2003, to consider the involuntary Chapter 11 bankruptcy petition filed against the Company by certain of its creditors on October 8, 2002, has been rescheduled for February 27, 2003. The Company has filed a motion to dismiss and answer in the case, and is continuing to negotiate with its creditors in an effort to reach an out of court settlement and dismissal of the bankruptcy. ITEM 7. FINANCIAL STATEMENT AND EXHIBITS a. Financial Statement of Business Acquired None. b. Pro Forma Financial Information As discussed in Item 2 above, on January 31, 2003, the Company completed the sale of certain oil and gas properties in the Constitution Field in Jefferson County, Texas, to Samson Lone Star Limited Partnership. As discussed in Item 5 above, on November 21, 2002, the Company completed a sale of a development drilling project in the Hansford Field, Hansford County, Texas. The Unaudited Pro Forma September 30, 2002 Consolidated Balance Sheet is presented assuming the sales of the properties occurred on September 30, 2002. The Unaudited Pro Forma Consolidated Statements of Operations for the nine months ended September 30, 2002 is presented as if the sales of the properties occurred on January 1, 2002. The Unaudited Pro Forma Consolidated Financial Statements may not necessarily be indicative of the results which would actually have occurred if the sales of the properties had been in effect as of the date or for the periods indicated.

VENUS EXPLORATION, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS For the Nine Months Ended September 30, 2002 1. BASIS OF PRESENTATION The Unaudited Pro Forma September 30, 2002 Consolidated Balance Sheet is presented assuming the sales of the properties occurred on September 30, 2002. The Unaudited Pro Forma Consolidated Statements of Operations for the nine months ended September 30, 2002 is presented as if the sales of the properties occurred on January 1, 2002. The Unaudited Pro Forma Consolidated Financial Statements may not necessarily be indicative to the results which would actually have occurred if the sales of the properties had been in effect as of the date or for the periods indicated. 2. PRO FORMA ADJUSTMENTS - STATEMENTS OF OPERATIONS The pro forma adjustments to the Unaudited Pro Forma Consolidated Statements of Operations reflect the following: (a) DEPRECIATION, DEPLETION AND AMORTIZATION - The adjustment reflects the pro forma depreciation, depletion and amortization expense based on the use of adjusted capitalized costs and proved reserves. (b) INCOME TAXES - No adjustments to income tax expense or benefit have been reflected in the unaudited pro forma statements of operations due to the net operating losses and the uncertainty of realizing deferred tax benefits. (c) EARNINGS (LOSS) PER SHARE - The weighted average number of shares of Common Stock outstanding is based on the number of shares outstanding. Options and warrants outstanding are not reflected in the pro forma earnings (loss) per share calculations because they would be anti-dilutive. 3. PRO FORMA ADJUSTMENTS - BALANCE SHEET The pro forma adjustments to the Unaudited Pro Forma Consolidated Balance Sheet reflect the following: (a) NET OIL AND GAS PROPERTIES - The adjustment to Net Oil and Gas Properties reflects the net book value of the properties sold. (b) TRADE ACCOUNTS PAYABLE - The adjustments to Trade Accounts Payable reflect payments of accrued revenue payables and trade payables attributable to the properties sold. (c) CURRENT MATURITIES OF LONG-TERM DEBT, INCLUDING LONG-TERM DEBT RECLASSIFIED AS CURRENT - The adjustments to current maturities of long-term debt, including long-term debt reclassified as current reflect the paydown of the debt that actually occurred when the properties were sold. (d) RETAINED EARNINGS (DEFICIT) - The adjustment to Retained Earnings (Deficit) reflects the effect of the sale of the properties on the accumulated deficit. c. Exhibits 2.1 Purchase and Sale Agreement dated January 15, 2003, by and between Venus Exploration, Inc. and Samson Lone Star Limited Partnership. 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: February 17, 2003 VENUS EXPLORATION, INC. BY: /s/ EUGENE L. AMES, JR. ------------------------- Eugene L. Ames, Jr. Chief Executive Officer

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