UNITED STATES
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) August 30, 2002
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CAL DIVE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 95-3409686
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
400 N. SAM HOUSTON PARKWAY E., SUITE 400, HOUSTON, TEXAS 77060
(Address of Principal Executive Offices) (Zip Code)
(281) 618-0400
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since
last report)
Item 2. Acquisition or Disposition of Assets.
On August 30, 2002, Energy Resource Technology, Inc. (ERT), a wholly
owned subsidiary of Cal Dive International, Inc. acquired the 74.8% working
interest of Shell Exploration & Production Company in the South Marsh Island 130
(SMI 130) field. ERT paid $10.3 million in cash and assumed Shell's pro-rata
share of the related decommissioning liability. ERT also completed the purchase
of seven Gulf of Mexico fields from Amerada Hess including its 25% ownership
position in SMI 130 for $9.3 million in cash and assumption of Amerada Hess's
pro-rata share of the related decommissioning liability. As a result, ERT will
take over as operator with an effective 100% working interest in that field. SMI
130 consists of two blocks, located in approximately 215 feet of water, with
approximately 155 wells on five 8-pile platforms. Currently the field produces
approximately 4,000 barrels of oil per day from 50 active wells. It has produced
in excess of 200 million barrels of oil equivalent since first production in
1976.
In July 2002, CDI purchased the Subsea Well Operations Business Unit of
CSO Ltd., a wholly owned subsidiary of Technip-Coflexip, for $68.6 million. The
acquisition was accounted for as a purchase with the acquisition price allocated
to the assets acquired and liabilities assumed based upon their estimated fair
values, with the excess being recorded as goodwill, which totaled approximately
$28.6 million. The allocation of the purchase price to the fair market value of
the net assets acquired in this acquisition are based on preliminary estimates
of fair market values and may be revised when additional information concerning
asset and liability valuation is obtained; however, management does not
anticipate the adjustments, if any, will have a material impact on the Company's
results of operations or financial position. Under the terms of this agreement,
CSO Ltd. transferred to Well Ops (U.K.) Ltd., a wholly owned subsidiary of Cal
Dive, all activities and resources dedicated to Subsea Well Intervention,
including the specialized, dynamically positioned vessel Seawell as well as
assignment of current client and vendor contracts. Purpose built for well
operations, the Seawell, a 111-meter, DP3 vessel, was recently upgraded for
coiled tubing deployment and well testing.
In June 2002, ERT acquired a package of offshore properties from
Williams Production RMT Company, a subsidiary of Williams Companies, Inc. ERT
paid $5.2 million and assumed the pro- rata share of the abandonment obligation
for the acquired interests. The blocks purchased represent an average 30% net
working interest in 26 Gulf of Mexico leases.
In April 2002, ERT acquired a 100% interest in East Cameron Block 374,
including existing wells, equipment and improvements. The property, located in
425 feet of water, was jointly owned by Murphy Exploration & Production Company
and Callon Petroleum Operating Company. Terms included a cash payment of $3.3
million to reimburse the owners for the inception-to-date cost of the subsea
wellhead and umbilical, and an overriding royalty interest in future production.
Cal Dive has completed the temporarily abandoned number one well and performed a
subsea tie-back to a host platform. The cost of completion and tie-back is
estimated at $7 million, with first production occurring in August 2002.
In January 2002, CDI purchased Canyon Offshore, Inc. (Canyon), a
supplier of remotely operated vehicles (ROVs) and robotics to the offshore
construction and telecommunications industries. CDI purchased approximately 85%
of Canyon's stock for cash of $52.9 million, the assumption of $9.0 million of
Canyon debt (offset by $3.1 million of cash acquired) and 181,000 shares of our
common stock
(143,000 shares of which we purchased as treasury shares during the fourth
quarter of 2001). Cal Dive committed to purchase the remaining 15% for cash at a
price to be determined by Canyon's performance during the years 2002 through
2004 from continuing employees at a minimum purchase price of $13.53 per share.
As they are employees, amounts paid, if any, in excess of the $13.53 per share
will be recorded as compensation expense. These remaining shares were classified
as redeemable stock in subsidiary in CDI's balance sheet and will be adjusted to
their estimated redemption value at each reporting period based on Canyon's
performance. The acquisition was accounted for as a purchase with the
acquisition price allocated to the assets acquired and liabilities assumed based
upon their estimated fair values, with the excess being recorded as goodwill,
which totaled approximately $45.1 million. The allocation of the purchase price
to the fair market value of the net assets acquired in the Canyon acquisition
are based on preliminary estimates of fair market values and may be revised when
additional information concerning asset and liability valuation is obtained;
however, management does not anticipate the adjustments, if any, will have a
material impact on the Company's results of operations or financial position.
These acquisitions were funded with existing cash balances, proceeds
received in CDI's equity offering completed during the second quarter of 2002,
along with borrowings under CDI's revolving credit facility led by Fleet Capital
and, in the case of Canyon, with CDI common stock.
The consideration for these acquisitions was based on arm's length
negotiations with the sellers, none of whom were affiliated with Cal Dive.
The Company is currently assessing whether the impact of these
acquisitions, in the aggregate, requires furnishing of separate audited
financial statements for the businesses acquired. If required, the financial
statements will be provided by an amendment to this Form 8-K no later than 60
days from the date of this filing.
CAL DIVE INTERNATIONAL, INC.
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 thereunto duly authorized.
Date: September 16, 2002
CAL DIVE INTERNATIONAL, INC.
By: /S/ S. JAMES NELSON
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S. James Nelson
Vice Chairman
By: /S/ A. WADE PURSELL
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A. Wade Pursell
Senior Vice President and
Chief Financial Officer