ptrc8k_dec162015.htm


SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): December 16, 2015
 
PETRO RIVER OIL CORP.
(Exact name of Registrant as specified in its Charter)
 
Delaware
000-49760
9800611188
(State or other jurisdiction
of incorporation)
(Commission File No.)
(IRS Employer
Identification No.)
 
205 East 42nd Street, Fourteenth Floor
New York, New York 10017
 
(Address of principal executive offices)
 
   
(469) 828-3900
 
(Registrant’s Telephone Number)
 
   
Not Applicable
 
(Former name or address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 


 

 
 
Item 2.02 Results of Operations and Financial Condition.

Petro River Oil Corp. (the “Company”) today issued a press release announcing its financial results for the three and six months ended October 31, 2015.  A copy of the press release is attached as Exhibit 99.1.

In accordance with General Instruction B.2 for Form 8-K, the information in this Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 8.01 Other Events.

See Item 2.02.

Item 9.01 Financial Statements and Exhibits.

See Exhibit Index.


 
 

 
 
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.
 

       
   
PETRO RIVER OIL CORP.
       
Date: December 16, 2015
 
By:
 /s/ Scot Cohen
     
Scot Cohen
     
Executive Chairman
       


 
 

 

EXHIBIT INDEX

Exhibit No.
 
Description
99.1
 
Press Release, dated December 16, 2015

 
ex99-1.htm
Exhibit 99.1
 
Petro River Oil Corp. Reports Second Quarter 2015 Financials

Net Income of $6,293,845 ($0.74 per share)
 
NEW YORK, NY, December 16, 2015 – Petro River Oil Corp. (OTCBB: PTRCD) (“Petro River” or the "Company"), today reported its second quarter 2015 highlights and selected financial results for the three and six months ended October 31, 2015, as well as an overview of recent developments focusing on the Company’s restructuring and corporate strategy.
 
Highlights for Quarter ending October 31, 2015.

 
Recorded second quarter net income of $6,293,845 ($0.74 per share), compared to a net loss of $(1,103,025) (-$0.27 per share) for quarter ending October 31, 2014.
 
Current assets of $24,995,165, compared to current assets of $1,231,002 as of April 30, 2015.
 
Total liabilities (excluding long term asset retirement obligations) of $1,593,521, compared to liabilities of $794,186 as of April 30, 2015. The Company does not have any bank debt or other secured financing obligations.
 
Working capital of approximately $23.4 million as of October 31, 2015.
 
The second quarter results include the income generated from the transaction between the Company and its wholly owned subsidiary, Megawest Kansas Energy Corporation (“Megawest”), and Fortis Property Group, LLC (“Fortis”), pursuant to the contribution agreement, dated as of October 30, 2015 and effective as of October 15, 2015 (the “Megawest Transaction”).  As a result of the Megawest Transaction, the Company recorded approximately $18.3 million in amounts due from a related party; this amount was collected by Megawest subsequent to the quarter ended October 31, 2015.
 
Recent Developments.
 
The Company, led by its newly appointed President, Stephen Brunner, is involved in capitalizing on the current oil market by identifying and acquiring highly attractive oil and gas assets.  When asked about the Company’s positioning and strategy, Mr. Brunner stated the following:
 
“While other companies are struggling with high debt and low oil prices, management believes this period presents an opportunity to secure assets not previously available to small oil and gas exploration and development companies.  Securing financing under the Megawest Transaction and the Horizon Transaction (described below) puts Petro River in an unprecedented position for growth going forward.”
 
Acquisition of Horizon Investments:

On December 1, 2015, the Company entered into a purchase agreement to acquire Horizon I Investments, LLC in an all-stock deal (the “Horizon Transaction”).  Upon closing, the acquisition will provide Petro River with approximately $5.0 million in cash plus a 20% membership interest in Horizon Energy Partners, LLC (“Horizon Energy Partners”).
 
Horizon Energy Partners is an oil and gas exploration and development company owned and managed by former senior oil and gas executives.  It has a portfolio of domestic and international assets, including two assets located in the United Kingdom, adjacent to the giant Wytch Farm oil field, the largest onshore oil field in Western Europe.  Other projects include the proposed redevelopment of a large oil field in Kern County, California and the development of an additional recent discovery in Kern County. The Company will provide more details on each project on or prior to the closing of the Horizon Transaction.
 
 
 

 
 
Megawest Transaction:
 
On October 30, 2015, the Company entered into a contribution agreement with Megawest and Fortis, pursuant to which the Company and Fortis each agreed to assign certain assets to Megawest in exchange for shares of MegaWest common stock.
 
The Company transferred its 50% membership interest in Bandolier Energy, LLC, together with Megawest’s existing assets, and Fortis transferred certain indirect interests held in certain real estate assets and the rights to any profits and proceeds therefrom, to Megawest.  As consideration for the assignment of the Bandolier Interest, Megawest issued 58,510 (58.51%) of its common stock to the Company; as consideration for the assets assigned to Megawest by Fortis, Megawest  issued 41,490 (41.49%) of its common stock to Fortis. The joint venture plans to invest in oil and gas assets, including the Company’s assets in Osage County, Oklahoma.
 
Steve Brunner commented “We are happy to work with Fortis on finding attractive opportunities in oil and gas assets, including the possible investment in a vertical drilling program for our Pearsonia West Concession, consisting of 106,500 contiguous acres in Osage County, Oklahoma.”
 
Reverse Stock Split:
 
On December 7, 2015, the Company effected a one (1) for two hundred (200) reverse split of its issued and outstanding common stock as a step toward the Company’s intention to have its common stock listed on the NYSE MKT.  The Company's common stock will begin trading under a new CUSIP number (71647K303). The Company's ticker symbol, "PTRC", will remain unchanged; however, the ticker symbol will be represented as "PTRCD" for 20 trading days commencing on the Effective Date to designate the Reverse Split.
 
Executive Chairman Statement.
 
Scot Cohen commented "While other oil companies are playing defense, turning off production, shutting down exploration activity and divesting assets, we are now playing offense.  We have taken advantage of this low priced oil environment to execute key strategic initiatives.  We have acquired access to potentially lucrative domestic and international assets, recapitalized our balance sheet and established new leadership.  I'm thrilled to have Stephen Brunner on board, his track record speaks for itself.”
 
 Financial Highlights.
 
The following tables set forth selected financial information for the three and six months ended October 31, 2015 and October 31, 2014.  The information is derived from the Company's financial statements included in its Quarterly Report on Form 10-Q for the three and six months ended October 31, 2015 and October 31, 2014.  All of this information should be read in conjunction with the Form 10-Q and the financial statements contained therein, including the notes to the financial statements. 

 
 

 

Petro River Oil Corp. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)

   
As of
 
   
October 31,
2015
   
April 30,
2015
 
Assets
           
Current Assets:
           
Cash and cash equivalents
 
$
526,135
   
$
1,010,543
 
Certificate of deposit - restricted
   
125,000
     
125,000
 
Accounts receivable – oil and gas
   
1,806
     
42,688
 
Accounts receivable - related party
   
18,271,716
     
-
 
Real estate – held for sale
   
6,021,779
     
-
 
Prepaid expenses and other current assets
   
48,729
     
52,771
 
Total Current Assets
   
24,995,165
     
1,231,002
 
                 
Oil and gas assets, net
   
15,403,605
     
15,757,011
 
Property, plant and equipment, net of accumulated depreciation of $304,090 and $313,508, respectively
   
2,720
     
60,953
 
Intangible assets, net of accumulated amortization of $80,519 and $20,293, respectively
   
2,143,167
     
2,203,393
 
Other assets
   
28,132
     
27,922
 
Total Other Assets
   
17,577,625
     
18,049,279
 
Total Assets
 
$
42,572,790
   
$
19,280,281
 
                 
Liabilities and Equity
               
Current Liabilities:
               
Accounts payable and accrued expenses
 
$
163,187
   
$
252,227
 
Deposit on real estate sales
   
888,375
     
-
 
Asset retirement obligations, current portion
   
541,959
     
541,959
 
Total Current Liabilities
   
1,593,521
     
794,186
 
                 
Long-term Liabilities:
               
Asset retirement obligations, net of current portion
   
396,798
     
376,471
 
Total Long-term Liabilities
   
396,798
     
376,471
 
                 
Total Liabilities
   
1,990,319
     
1,170,657
 
                 
Commitments and contingencies
               
                 
Equity:
               
Preferred shares - 5,000,000 authorized; par value $0.00001; 0 shares issued and outstanding
   
-
     
-
 
Preferred B shares - 29,500 authorized; par value $0.00001; 0 shares issued and outstanding
   
-
     
-
 
Common shares – 100,000,000 authorized; par value $0.00001; 4,259,505 issued and outstanding
   
43
     
43
 
Additional paid-in capital
   
38,659,215
     
31,115,291
 
Accumulated deficit
   
(14,167,061
)
   
(16,650,486
)
Total Petro River Oil Corp. Equity
   
24,492,197
     
14,464,848
 
Non-controlling interest
   
16,090,274
     
3,644,776
 
Total Equity
   
40,582,471
     
18,109,624
 
Total Liabilities and Equity
 
$
42,572,790
   
$
19,280,281
 
 
 
 

 
 
Petro River Oil Corp. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)

   
For the
Three Months Ended
October 31,
    For the
Six Months Ended
October 31,
 
    2015    
2014
   
2015
   
2014
 
                                 
Revenues
                               
Oil and natural gas sales
 
$
-
   
$
757,485
   
$
62,841
   
$
1,423,761
 
Sales of real estate
   
18,347,111
     
-
     
18,347,111
     
-
 
Total Revenues
   
18,347,111
     
757,485
     
18,409,952
     
1,423,761
 
                                 
Cost of revenues – sales of real estate
   
10,486,373
     
-
     
10,486,373
     
-
 
                                 
Gross margin
   
7,860,738
     
757,485
     
7,923,579
     
1,423,761
 
                                 
Operating expenses
                               
Lease operating expenses
   
84,035
     
446,829
     
259,988
     
787,497
 
Depreciation, depletion and accretion
   
39,777
     
218,681
     
105,750
     
400,833
 
Amortization of intangibles
   
30,113
     
-
     
60,226
     
-
 
Gain on sale of equipment
   
(5,519
)
   
-
     
(5,519
)
   
-
 
General and administrative
   
1,418,386
     
1,195,000
     
1,978,361
     
3,052,032
 
Total expenses
   
1,566,792
     
1,860,510
     
2,398,806
     
4,240,362
 
                                 
Operating income (loss)
   
6,293,946
     
(1,103,025
)
   
5,524,773
     
(2,816,601
)
                                 
Other income (expense)
   
(101
)
   
  -
     
782
     
  33
 
                                 
Net income (loss)
   
6,293,845
     
(1,103,025
)
   
5,525,555
     
(2,816,568
)
                                 
Net income (loss) attributable to non-controlling interest
   
3,125,489
     
55,680
     
3,042,130
     
(347,031
)
                                 
Net income (loss) attributable to Petro River Oil Corp. and Subsidiaries
 
$
3,168,356
   
$
(1,158,705
)
 
$
2,483,425
   
$
(2,469,537
)
                                 
Basic and diluted net income (loss) per common share
 
$
0.74
   
$
(0.28
)
 
$
0.58
   
$
(0.60
)
                                 
Weighted average number of common shares outstanding - Basic and diluted
   
4,259,505
     
4,092,839
     
4,259,505
     
4,092,839
 
 
 
 

 

 Petro River Oil Corp. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
 
    For the Six 
Months Ended
October 31,
2015
    For the Six 
Months Ended
October 31,
2014
 
Cash Flows From Operating Activities:
               
Net income (loss)
 
$
5,525,555
   
$
(2,816,568
)
Adjustments to reconcile net income (loss) to net cash used in operating activities
               
Depreciation, depletion and accretion
   
105,750
     
400,834
 
Amortization of intangibles
   
60,226
     
-
 
Stock-based compensation
   
1,402,910
     
674,254
 
Non-cash cost of real estate properties sold
   
9,522,603
     
-
 
Gain on sale of equipment
   
(5,519
)
   
-
 
Changes in operating assets and liabilities:
               
Accounts receivable – oil and gas
   
40,882
     
(225,805
Accounts receivable – related party
   
(17,383,341
)
   
-
 
Prepaid expenses and other current assets
   
4,042
     
(45,564
Accounts payable and accrued expenses
   
(89,036
   
(78,981
Net Cash Used in Operating Activities
   
(815,928
)
   
(2,091,830
)
                 
Cash Flows From Investing Activities:
               
Purchase of certificate of deposit - restricted
   
-
     
(125,000
Capitalized expenditures on oil and gas assets
   
(7,283
)
   
(8,333,510
)
Cash received upon disposal of oil and gas assets
   
279,013
     
-
 
Purchase of equipment
   
-
     
(39,756
Proceeds from sale of equipment
   
60,000
     
-
 
Payments on deposits
   
(210
)
   
(10,999
Net Cash Provided by (Used in) Investing Activities
   
331,520
     
(8,509,265
)
                 
Cash Flows From Financing Activities:
               
Cash payments of note payable
   
-
     
(1,926
)
Cash received from non-controlling interest contribution
   
-
     
5,000,000
 
Net Cash Provided by Financing Activities
   
-
     
4,998,074
 
                 
Decrease in cash and cash equivalents
   
(484,408
)
   
(5,603,021
)
                 
Cash and cash equivalents, beginning of period
   
1,010,543
     
8,352,949
 
Cash and cash equivalents, end of period
 
$
526,135
   
$
2,749,928
 
                 
Supplementary Cash Flow Information:
               
Cash paid during the period for:
               
Income taxes
 
$
14,482
   
$
7,975
 
Interest paid
 
$
-
   
$
-
 
                 
Non-cash Investing and Financing Activities:
               
Real estate contributed by non-controlling interest
 
$
15,544,382
   
$
-
 
Accounts receivable for deposit received on real estate sales in escrow
 
$
888,375
   
$
-
 
Acquisition of oil and gas assets
 
$
-
   
$
48,763
 
Issuance of note payable for purchase of fixed assets
 
$
-
   
$
27,280
 
 
 
 

 
 
About: Petro River Oil Corp.
 
Petro River Oil Corp. (OTCBB: PTRC) is an independent exploration and development company focused on applying modern technologies to oil and gas assets. Petro River’s core holdings are in the Mid- Continent region in Oklahoma. Petro River utilizes its local and global expertise in the region and globally to exploit hydrocarbon-prone resources to build reserves and to create value for the Company and its shareholders. The Company also wholly owns Petro Spring, a technology focused business.  For more information, please visit our website at www.petroriveroil.com.

Forward-Looking Statements.

This news release contains forward-looking and other statements that are not historical facts. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward looking statements.  These forward looking statements, projections and statements are subject to change and could differ materially from final reported results. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.   Petro River assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. Additionally, Petro River undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect to the matters discussed above. Readers should also carefully review the “Risk Factors” in Petro River’s annual report on Form 10-K, its quarterly report on Form 10-Q, and its other reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.
 
For further information, please contact:
 
Investor Relations
ir@petroriveroil.com
(469) 828-3900