As filed with the Securities and Exchange Commission on October 5, 2004
Registration No. 333-117182
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PYR ENERGY CORPORATION
----------------------
(Exact Name of Registrant as Specified in Its Charter)
Maryland
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(State or Other Jurisdiction of Incorporation or Organization)
95-4580642
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(I.R.S. Employer Identification No.)
1675 Broadway, Suite 2450
Denver, Colorado 80202
(303) 825-3748
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(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
D. Scott Singdahlsen, President
PYR Energy Corporation
1675 Broadway, Suite 2450
Denver, Colorado 80202
(303) 825-3748
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(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
Copies to:
Alan L. Talesnick, Esquire
Lloyd Spencer, Esquire
Patton Boggs LLP
1660 Lincoln Street, Suite 1900
Denver, Colorado 80264
(303) 830-1776
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]___________.
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]_____________.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of each class of Proposed maximum Proposed maximum
securities to be Amount to be offering price per aggregate offering Amount of
registered registered(4) share(5) price registration fee
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Common Stock, par value 11,445,403 $1.21 $13,848,938 $1,755
$.001(1)
Common Stock, par value 5,094,885 $1.21 $6,164,811 $781
$.001(2)
Common Stock, par value 1,423,817 $1.24 $1,765,533 $224
$.001 (6)
Common Stock, par value 675,000 $1.21 $816,750 $103
$.001(3)
TOTAL 18,639,105 $22,553,318 $2,863
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(1) Consists of (i) 7,500,000 shares of common stock acquired by certain
selling stockholders in May and June 2004 in connection with a private
offering of common stock (the "Private Offering"), and (ii) 3,945,403
shares of common stock held by certain selling stockholders.
(2) Consists of 5,094,885 shares of common stock into which the principal and
interest accrued as of May 31, 2004 of outstanding convertible promissory
notes are convertible.
(3) Consists of 675,000 shares issuable to certain selling stockholders upon
exercise of warrants for the purchase of shares of common stock.
(4) Pursuant to Rule 416 under the Securities Act of 1933, this registration
statement also covers such additional shares of common stock of as may be
issued as a result of stock splits, dividends and combinations.
(5) The proposed maximum offering price per share is estimated solely for the
purpose of calculating the registration fee pursuant to Rule 457 under the
Securities Act of 1933 based upon (i) with respect to all shares other than
the 1,423,817 shares described in note (6), the average of the high and low
sales prices of the Registrant's common stock as reported on the American
Stock Exchange on July 2, 2004, which is within five business days of the
date of filing initial filing of this Registration Statement (July 6,
2004), and (ii) with respect to the 1,423,817 shares described in note (6),
the average high and low sales prices of the Registrant's common stock as
reported on the American Stock Exchange on October 1, 2004, which is within
five business days of the date of filing Amendment No. 1.
(6) Consists of 1,423,817 shares of common stock, the maximum number of share
into which the interest accruable on outstanding convertible promissory
notes during the period from June 1, 2004 through the convertible
promissory note maturity date of May 24, 1009, is convertible.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that the Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed. The
stockholders may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS DATED OCTOBER 6, 2004
SUBJECT TO COMPLETION
PYR ENERGY CORPORATION
18,639,105 Shares of Common Stock
Selling stockholders of PYR Energy Corporation identified in this
prospectus may from time to time offer and sell up to an aggregate of 18,639,105
shares of common stock to the public under this prospectus. We are registering
the sales of the shares of common stock offered in this prospectus to satisfy
registration rights of the selling stockholders. We are not selling any shares
of common stock under this prospectus and will not receive any of the proceeds
from the sale of the shares to be sold under this prospectus. All sale proceeds
will be received by the selling stockholders.
The selling stockholders may sell their shares at market prices prevailing
at the time of transfer, at prices related to the prevailing market prices or at
negotiated prices.
Our common stock is listed on the American Stock Exchange under the symbol
"PYR". On October 1, 2004, the closing sale price of our common stock was $1.24
per share.
Investing in the common stock involves risks. See "Risk Factors" beginning
on page 2 to read about factors you should consider before buying shares of our
common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is October , 2004.
TABLE OF CONTENTS
Page
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PROSPECTUS SUMMARY.............................................................1
RISK FACTORS...................................................................2
THE COMPANY....................................................................8
RECENT DEVELOPMENTS............................................................9
SELLING STOCKHOLDERS..........................................................12
PLAN OF DISTRIBUTION..........................................................14
LEGAL MATTERS.................................................................15
EXPERTS.......................................................................15
SECURITIES AND EXCHANGE COMMISSION POSITION ON CERTAIN
INDEMNIFICATION...........................................................15
WHERE YOU CAN FIND MORE INFORMATION...........................................15
INCORPORATION OF INFORMATION WE FILE WITH THE SEC.............................15
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS AND
CAUTIONARY STATEMENTS.....................................................15
You should rely only on the information in this prospectus or any
supplement. We have not authorized anyone to provide you with information that
is different. This document may only be used where it is legal to sell these
securities. You should assume that the information in this document is accurate
only as of the date of this document.
i
PROSPECTUS SUMMARY
The following summary highlights information contained in this prospectus.
It may not be complete and may not contain all the information that you should
consider before investing in our common stock. You should read this entire
prospectus carefully, including the "Risk Factors" section.
The Company We are an independent oil and gas exploration
company whose strategic focus is the application of
advanced seismic imaging and computer aided
exploration technologies in the systematic search
for commercial hydrocarbon reserves, primarily in
the onshore western United States. We attempt to
leverage our technical experience and expertise with
seismic data to identify exploration and
exploitation projects with significant potential
economic return. We intend to participate in
selected exploration projects as a working interest
owner, sharing both risk and rewards with other
participants. We do not currently operate any
projects in which we own a working interest,
although we may operate some projects in the future.
We do not have the financial ability to commence
exploratory drilling operations without third party
participation. We have pursued, and will continue to
pursue, exploration opportunities in regions in
which we believe significant opportunity for
discovery of oil and gas exists. By attempting to
reduce drilling risk through seismic technology, we
also seek to improve the expected return on
investment in our oil and gas exploration projects.
We were incorporated in March 1996 in the state of
Delaware under the name Mar Ventures Inc. Effective
as of August 6, 1997, we purchased all the ownership
interests of PYR Energy, LLC, an oil and gas
exploration company. On November 12, 1997, we
changed our name to PYR Energy Corporation.
Effective as of July 2, 2001, we reincorporated in
Maryland. In May 2004, we acquired both producing
and non-producing oil and gas interests from Venus
Exploration, Inc., which was involved in a U.S.
federal bankruptcy proceeding at that time.
The Offering The selling stockholders may sell a total of
18,639,105 shares of common stock, consisting of the
following: (i) 7,500,000 shares issued to certain
selling stockholders in our private offering in May
and June, 2004, (ii) 3,945,403 shares held by
certain selling stockholders, (iii) 6,518,702 shares
into which the principal and interest, currently
accrued and accruable, of outstanding convertible
promissory notes are convertible, through the notes'
maturity date of May 24, 2009, and (iv) 675,000
shares issuable upon the exercise of warrants held
by certain selling stockholders.
We will not receive any proceeds from the sale of
common stock by the selling stockholders.
1
Corporate Information Our offices are located at 1675 Broadway, Suite
2450, Denver, Colorado 80202, telephone number (303)
825-3748. Our World Wide Web site address is
www.pyrenergy.com. Information contained in our Web
site is not incorporated by reference into this
prospectus, and you should not consider information
contained in our Web site as part of this
prospectus.
RISK FACTORS
The purchase of shares of our common stock involves a high degree of risk.
Before purchasing our common stock, you should read this entire prospectus and
consider the following factors concerning PYR Energy Corporation in addition to
the other information in this prospectus, including our financial statements and
related notes, before you purchase any shares of our common stock.
Our business is difficult to evaluate because we have a limited operating
history in the oil and gas business.
Through December 31, 2003, our operations have consisted solely of
evaluating geological and geophysical information, acquiring acreage positions,
generating exploration prospects, and drilling a limited number of wells on deep
oil and gas prospects. During 2004, we and our partners are beginning to
undertake drilling activities on some of our property. We currently have six
full-time employees. Our future financial results depend primarily on:
o our ability to discover commercial quantities of oil and gas;
o the market price for oil and gas;
o our ability to continue to generate potential exploration prospects;
and
o our ability to fully implement our exploration and development
program.
We cannot predict that our future operations will be profitable. In addition,
our operating results may vary significantly during any financial period. These
variations may be caused by significant periods of time between discovery and
development of oil or gas reserves, if any, in commercial quantities.
Our ongoing overhead exceeds our incoming revenue, and our cash resources are
not unlimited.
We need to increase our sources of revenue and/or funding in order to
sustain operations for the long run. There is no assurance that this will occur.
We may not discover commercially productive reserves.
Our future success depends on our ability to economically locate oil and
gas reserves in commercial quantities. Except to the extent that we acquire
properties containing proved reserves or that we conduct successful exploration
and development activities, or both, our proved reserves, if any, will decline
as reserves are produced. Our ability to locate reserves is dependent upon a
number of factors, including our participation in multiple exploration projects
and our technological capability to locate oil and gas in commercial quantities.
We cannot predict that we will have the opportunity to participate in projects
that economically produce commercial quantities of oil and gas in amounts
necessary to meet our business plan or that the projects in which we elect to
participate will be successful. There can be no assurance that our planned
projects will result in significant reserves or that we will have future success
in drilling productive wells at economical reserve replacement costs.
2
Exploratory drilling is an uncertain process with many risks, and any future
drilling may not be successful.
Exploratory drilling involves numerous risks, including the risk that we
will not find any commercially productive oil or gas reservoirs. The cost of
drilling, completing and operating wells is often uncertain, and a number of
factors can delay or prevent drilling operations, including:
o unexpected drilling conditions;
o pressure or irregularities in formations;
o equipment failures or accidents;
o adverse weather conditions;
o compliance with governmental requirements;
o shortages or delays in the availability of drilling rigs and the
delivery of equipment; and
o shortages of trained oilfield service personnel.
Our future drilling activities may not be successful, nor can we be sure
that our overall drilling success rate or our drilling success rate for
activities within a particular area will not decline. Unsuccessful drilling
activities could have a material adverse effect on our results of operations and
financial condition. Also, we may not be able to obtain any options or lease
rights in potential drilling locations that we identify. Although we have
identified a number of potential exploration projects, we cannot be sure that we
will ever drill them or that we will produce oil or gas from them or any other
potential exploration projects.
Our reserves and future net revenues may differ significantly from our
estimates.
The documents incorporated by reference into this prospectus contain
estimates of our reserves and future net revenues. The estimates of reserves and
future net earnings are not exact and are based on many variable and uncertain
factors; therefore, the estimates may vary substantially depending, in part, on
the assumptions made and may be subject to adjustment either up or down in the
future. The actual amounts of production, revenues, taxes, development
expenditures, operating expenses and quantities of recoverable oil and gas
reserves to be encountered may vary substantially from the estimated amounts. In
addition, estimates of reserves also are extremely sensitive to the market
prices for oil and gas.
Our exploration and development activities are subject to reservoir and
operational risks.
Even when oil and gas is found in what is believed to be commercial
quantities, reservoir risks, which may be heightened in new discoveries, may
lead to increased costs and decreased production. These risks include the
inability to sustain deliverability at commercially productive levels as a
result of decreased reservoir pressures, large amounts of water, or other
factors that might be encountered. As a result of these types of risks, most
lenders will not loan funds secured by reserves from newly discovered
reservoirs, which would have a negative impact on our future liquidity.
Operational risks include hazards such as fires, explosions, craterings,
blowouts (such as the blowout experienced at our initial exploratory well),
uncontrollable flows of oil, gas or well fluids, pollution, releases of toxic
gas and encountering formations with abnormal pressures. In addition, we may be
liable for environmental damage caused by previous owners of property we own or
lease. As a result, we may face substantial liabilities to third parties or
3
governmental entities, which could reduce or eliminate funds available for
exploration, development or acquisitions or cause us to incur substantial
losses.
We expect to maintain insurance against some, but not all, of the risks
associated with drilling and production in amounts that we believe to be
reasonable in accordance with customary industry practices. The occurrence of a
significant event, however, that is not fully insured could have a material
adverse effect on our financial condition and results of operations.
Our operations require large amounts of capital that we may not be able to
obtain.
Our current development plans will require us to make large capital
expenditures for the exploration and development of our oil and gas projects. We
must also secure substantial capital to explore and develop our other potential
projects. Historically, we have funded our capital expenditures through the
issuance of equity. Volatility in the price of our common stock, which may be
significantly influenced by our drilling and production activity, may impede our
ability to raise money quickly, if at all, through the issuance of equity at
acceptable prices. We currently do not have any sources of additional financing.
Future cash flows and the availability of financing will be subject to a number
of variables, such as:
o our success in locating and producing reserves in other projects;
o the level of production from existing wells; and
o prices of oil and gas.
Issuing equity securities to satisfy our financing requirements could cause
substantial dilution to our existing stockholders. Debt financing, if obtained,
could lead to:
o a substantial portion of our operating cash flow being dedicated to
the payment of principal and interest;
o our being more vulnerable to competitive pressures and economic
downturns; and
o restrictions on our operations.
If our revenues were to decrease due to lower oil and gas prices, decreased
production or other reasons, and if we could not obtain capital through a credit
facility or otherwise, our ability to execute our development plans, obtain and
replace reserves, or maintain production levels could be greatly limited.
In developing our exploration projects, we depend heavily on exploration success
and subsequent success, neither of which can be assured.
Our future growth plans rely heavily on discovering reserves and initiating
production in the areas of our leasehold interests. This lack of diverse types
of business operations subjects us to a high degree of risk.
Our development plan includes the need to discover reserves and establish
commercial production through exploratory drilling and development of our
existing properties. We cannot be sure, though, that our planned projects will
lead to significant reserves that can be economically extracted or that we will
be able to drill productive wells at anticipated finding and development costs.
If we are able to record reserves, our reserves will decline as they are
depleted, except to the extent that we conduct successful exploration or
development activities or acquire other properties containing proved reserves.
4
If we are not able to form industry alliances, our ability to fully implement
our business plan could be limited, which could have a material adverse effect
on our business.
We attempt to limit financial exposure on a project-by-project basis by
forming industry alliances where our technical expertise can be complemented
with the financial resources and operating expertise of more established
companies. While entering into these alliances limits our financial exposure, it
also limits our potential revenue from successful projects. Industry alliances
also have the potential to expose us to uncertainty if our industry partners are
acquired or have priorities in areas other than our projects. Despite these
risks, we believe that if we are not able to form industry alliances, our
ability to fully implement our business plan could be limited, which could have
a material adverse effect on our business.
We have limited control over activities on properties we do not operate, which
could reduce our production and revenue.
We focus primarily on creating exploration opportunities and forming
industry alliances to develop those opportunities. As a result, we have only a
limited ability to exercise control over a significant portion of a project's
operations or the associated costs of those operations. The success of a project
is dependent upon a number of factors that are outside our areas of expertise
and control. These factors include:
o the availability of leases with favorable terms and the availability
of required permitting for projects;
o the availability of future capital resources to us and the other
participants to be used for purchasing leases and drilling wells;
o the approval of other participants for the purchasing of leases and
the drilling of wells on the projects; and
o the economic conditions at the time of drilling, including the
prevailing and anticipated prices for oil and gas.
Our reliance on other project participants and our limited ability to
directly control project costs could have a material adverse effect on our
expected rates of return.
Oil and gas prices are volatile and an extended decline in prices could hurt our
business prospects.
Our future profitability and rate of growth and the anticipated carrying
value of our oil and gas properties will depend heavily on then prevailing
market prices for oil and gas. We expect the markets for oil and gas to continue
to be volatile. If we are successful in continuing to establish production, any
substantial or extended decline in the price of oil or gas could:
o have a material adverse effect on our results of operations;
o limit our ability to attract capital;
o make the formations we are targeting significantly less economically
attractive;
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o reduce our cash flow and borrowing capacity; and
o reduce the value and the amount of any future reserves.
Various factors beyond our control will affect prices of oil and gas, including:
o worldwide and domestic supplies of oil and gas;
o the ability of the members of the Organization of Petroleum Exporting
Countries to agree to and maintain oil price and production controls;
o political instability or armed conflict in oil or gas producing
regions;
o the price and level of foreign imports;
o worldwide economic conditions;
o marketability of production;
o the level of consumer demand;
o the price, availability and acceptance of alternative fuels;
o the availability of processing and pipeline capacity;
o weather conditions; and
o actions of federal, state, local and foreign authorities.
These external factors and the volatile nature of the energy markets make
it difficult to estimate future prices of oil and gas. In addition, sales of oil
and gas are seasonal in nature, leading to substantial differences in cash flow
at various times throughout the year.
Accounting rules may require write-downs.
Under full cost accounting rules, capitalized costs of proved oil and gas
properties may not exceed the present value of estimated future net revenues
from proved reserves, discounted at 10%. Application of the ceiling test
generally requires pricing future revenue at the unescalated prices in effect as
of the end of each fiscal quarter and requires a write-down for accounting
purposes if the ceiling is exceeded. If a write-down is required, it would
result in a charge to earnings, but would not impact cash flow from operating
activities. Once incurred, a write-down of oil and gas properties is not
reversible at a later date.
We face risks related to title to the leases we enter into that may result in
additional costs and affect our operating results.
It is customary in the oil and gas industry to acquire a leasehold interest
in a property based upon a preliminary title investigation. In many instances,
our partners have acquired rights to the prospective acreage and we have a
contractual right to have our interests in that acreage assigned to us. In some
cases, we are in the process of having those interests so assigned. If the title
to the leases acquired is defective, or title to the leases one of our partners
acquires for our benefit is defective, we could lose the money already spent on
6
acquisition and development, or incur substantial costs to cure the title
defect, including any necessary litigation. If a title defect cannot be cured or
if one of our partners does not assign to us our interest in a lease acquired
for our benefit, we will not have the right to participate in the development of
or production from the leased properties. In addition, it is possible that the
terms of our oil and gas leases may be interpreted differently depending on the
state in which the property is located. For instance, royalty calculations can
be substantially different from state to state, depending on each state's
interpretation of lease language concerning the costs of production. We cannot
guarantee that there will be no litigation concerning the proper interpretation
of the terms of our leases. Adverse decisions in any litigation of this kind
could result in material costs or the loss of one or more leases.
Competition in the oil and gas industry is intense, which may adversely affect
our ability to succeed.
We compete in oil and gas exploration with a number of other companies.
Many of these competitors have financial and technological resources vastly
exceeding those available to us. We cannot be sure that we will be successful in
acquiring and developing profitable properties in the face of this competition.
In addition, from time to time, there may be competition for, and shortage of,
exploration, drilling and production equipment. These shortages could lead to an
increase in costs and delays in operations that could have a material adverse
effect on our business and our ability to develop our properties. Problems of
this nature also could prevent us from producing any oil and gas we discover at
the rate we desire to do so.
Technological changes could put us at a competitive disadvantage.
The oil and gas industry is characterized by rapid and significant
technological advancements and introductions of new products and services using
new technologies. As new technologies develop, we may be placed at a competitive
disadvantage, and competitive pressures may force us to implement those new
technologies at a substantial cost. If other oil and gas exploration and
development companies implement new technologies before we do, those companies
may be able to provide enhanced capabilities and superior quality compared with
what we are able to provide. We may not be able to respond to these competitive
pressures and implement new technologies on a timely basis or at an acceptable
cost. If we are unable to utilize the most advanced commercially available
technologies, our business could be materially and adversely affected.
Our industry is heavily regulated, which increases the cost of doing business.
Federal, state and local authorities extensively regulate the oil and gas
industry. Legislation and regulations affecting the industry are under constant
review for amendment or expansion, raising the possibility of changes that may
affect, among other things, the pricing or marketing of oil and gas production.
State and local authorities regulate various aspects of oil and gas drilling and
production activities, including the drilling of wells (through permit and
bonding requirements), the spacing of wells, the unitization or pooling of oil
and gas properties, environmental matters, safety standards, the sharing of
markets, production limitations, plugging and abandonment, and restoration. The
overall regulatory burden on the industry increases the cost of doing business,
which, in turn, decreases profitability.
We are subject to complex environmental regulations that could adversely affect
the cost, manner or feasibility of doing business.
Our operations are subject to complex and constantly changing environmental
laws and regulations adopted by federal, state and local governmental
authorities. New laws or regulations, or changes to current requirements, could
have a material adverse effect on our business. We will continue to be subject
to uncertainty associated with new regulatory interpretations and inconsistent
interpretations between state and federal agencies. We could face significant
7
liabilities to the government and third parties for discharges of oil, natural
gas, produced water or other pollutants into the air, soil or water, and we
could have to spend substantial amounts on investigations, litigation and
remediation. We cannot be sure that existing environmental laws or regulations,
as currently interpreted or enforced, or as they may be interpreted, enforced or
altered in the future, will not have a material adverse effect on our results of
operations and financial condition.
Our business depends on transportation facilities, which are owned by others and
which we cannot control.
The marketability of our anticipated gas production depends in part on the
availability, proximity and capacity of pipeline systems owned or operated by
third parties. Federal and state regulation of oil and gas production and
transportation, tax and energy policies, changes in supply and demand and
general economic conditions could adversely affect our ability to produce,
gather and transport oil and natural gas.
Failure to continue to grow our business could have a material adverse effect on
our business.
Because of our small size, we desire to grow rapidly in order to achieve
certain economies of scale. Although there is no assurance that this rapid
growth will occur, to the extent that it does occur, it will place a significant
strain on our financial, technical, operational and administrative resources. As
we increase our services and enlarge the number of projects we are evaluating or
in which we are participating, there will be additional demands on our
financial, technical and administrative resources. The failure to continue to
upgrade our technical, administrative, operating and financial control systems
or the occurrence of unexpected expansion difficulties, including the
recruitment and retention of geoscientists and engineers, could have a material
adverse effect on our business, financial condition and results of operations.
We depend on a limited number of key personnel who would be difficult to
replace.
We are highly dependent on the services of D. Scott Singdahlsen, our
President and Chief Executive Officer, and our other geological, geophysical and
land staff members. The loss of the services of any of these persons could hurt
our business. We do not have an employment contract with, or key man insurance
covering, Mr. Singdahlsen or any other employee.
There is limited liquidity in our shares, and the prices of our stock are highly
volatile.
There is a limited market for our shares, and an investor cannot expect to
liquidate his investment regardless of the necessity of doing so. The prices of
our shares are also highly volatile, which makes investment in our common stock
more risky. We cannot assure you that an active trading market, if any, will be
sustained. In addition, there is no assurance that an investor will be able to
borrow funds using our shares as collateral.
THE COMPANY
The Company, which was formed in Delaware in March 1996, and reincorporated
in the State of Maryland on July 2, 2001, explores for, develops, produces and
sells natural gas and crude oil. We concentrate our activities in areas in which
we believe we have accumulated detailed geologic knowledge and developed
significant management experience. Current areas of our exploration and
development focus include the Rocky Mountain region, including the Wyoming
Overthrust in southwestern Wyoming, southeast Alberta, Canada, the Rogers Pass
project in northwestern Montana, the Tortuga Grande Prospect in Smith County,
8
Texas, and the Nome and Madison Prospects in Jefferson County, Texas. We also
have undeveloped leasehold acreage in the San Joaquin Basin of central
California, and we are evaluating the possibility of additional activity in
other areas.
Our common stock is traded on the American Stock Exchange under the ticker
symbol "PYR". On October 1, 2004, the last sale price was $1.24 per share of
common stock. Our corporate office is located at 1675 Broadway, Suite 2450,
Denver, Colorado 80202. Our telephone number is (303) 825-3748, and our fax
number is (303) 825-3768.
RECENT DEVELOPMENTS
Wyoming Overthrust Prospects:
In December 2003, we entered into an agreement with two private oil and gas
exploration companies covering two of our exploration projects in the Overthrust
of southwestern Wyoming.
The first agreement relates to the Mallard Prospect, which is located
adjacent to the south end of the Whitney Canyon - Carter Creek field. The
agreement requires the participants to drill the initial test well at the
Mallard Prospect to earn part of our acreage position within our Greater Duck
area of mutual interest, or AMI. We currently control 4,160 net leasehold acres
within the Greater Duck AMI. The partners have paid us approximately $450,000 in
prospect fees and pro-rata development costs. The Mallard well started drilling
in mid-July and as of October 4, 2004 is drilling ahead at approximately
10,800 feet measured depth. Immediate casing has been set fo 9,735 feet in the
Thaynes Formation. We are participating with a 5% working interest in the
drilling of Mallard, and will be carried to casing point, at an estimated total
depth of 15,500 feet, for an additional 23.75% working interest. After casing
point, we will have a 28.75% working interest in the initial test well and all
subsequent wells in the prospect.
The second agreement relates to the Cumberland Prospect. We believe the
Cumberland prospect is on trend with previously drilled and produced Nugget
productive fields, and also is located in the Overthrust of Southwestern
Wyoming, approximately 5 miles northeast of the Ryckman Creek field.
It is currently anticipated that the test well for the Cumberland Prospect
will be commenced in mid to late October 2004, contingent on rig availability.
The partners paid us $186,016 in prospect fees and pro-rata development costs.
An additional $86,004 will be paid upon the well reaching casing point. We will
participate with a 10% working interest in the drilling, and will be carried for
an additional 22.5% working interest to casing point in the initial test well.
After casing point, we will have a 32.5% working interest in the initial well
and all subsequent wells in the Prospect. The anticipated total depth of the
well is estimated to be 10,600 feet. We control 6,233 net leasehold acres within
the Cumberland area of mutual interest.
We have recently leased approximately 1,820 net acres, covering the
majority of the abandoned Ryckman Creek field, in the Overthrust of southwestern
Wyoming. Ryckman Creek, located 5 miles southwest of our Cumberland prospect,
was discovered in 1975 and produced approximately 250 Bcfe prior to abandonment.
We believe that significant remaining recoverable gas reserves were stranded in
Ryckman Creek upon abandonment. We are currently analyzing production and
geologic data to determine potential reserves in multiple zones, including the
Twin Creek, Nugget, and Thaynes Formations, in the field. It is anticipated that
a well may be drilled at Ryckman Creek late in 2004, and based on our analysis,
we may decide to sell down part of our 100% working interest in the project.
9
Montana Foothills Project:
In March 2004, we signed an Exploration Option Agreement with a subsidiary
of Suncor Energy, Incorporated, covering our Rogers Pass exploration project in
the Foothills of west-central Montana. We currently control approximately
241,800 gross and 226,300 net leasehold acres in the Rogers Pass project. Within
the Rogers Pass acreage block, we have undertaken extensive seismic analysis and
geological study, resulting in the identification of multiple untested,
prospective structures. Historically, only one well has been drilled within the
acreage block: the Unocal #1-B30, drilled in 1989 to a depth of 17,817 feet,
which was plugged and abandoned after testing.
Pursuant to our agreement with the subsidiary of Suncor Energy, Suncor
Energy Natural Gas America, Inc. ("SENGAI"), SENGAI has initially paid us a
$500,000 option fee for a technical evaluation period of up to three months.
Subsequently SENGAI paid us $750,000 to exercise its option to drill an initial
test well at Rogers Pass. It is anticipated that the initial test well will be
commenced prior to December 31, 2004. SENGAI will bear 100% of the costs of the
well, to a depth sufficient to evaluate the Mississippian, to earn a 100%
working interest in 100,000 acres of the project area. SENGAI will have the
option to pay a second prospect fee of $1,250,000 and drill a second test well,
to be spud by December 31, 2005. By paying this second prospect fee and bearing
100% of the costs of the second well, SENGAI will earn a 100% working interest
in the remaining acreage within the project area. We will retain a 12.5%
overriding royalty interest, subject to amortized recovery of gas plant and
certain transportation costs, covering all earned acreage within the Rogers Pass
project area.
Interests Acquired from Venus Exploration, Inc.:
As part of our acquisition of oil and gas interests from Venus Exploration,
Inc. ("Venus"), Venus retained a net profits interest payable to the Venus
Exploration Trust. The net profits interest, which applies only to the
exploration and exploitation projects on the acquired Venus acreage, varies from
25% to 50% with respect to different Venus exploration and exploitation project
areas, and decreases by one-half of its original amount after a total of
$3,300,000 has been paid to the Trust.
Oil and gas interests acquired from Venus include producing oil and gas
properties, exploitation drilling projects, and exploration acreage. Producing
assets include both operated and non-operated properties. Current net production
from the acquired properties is approximately 980 Mcfe per day, with estimated
'total proved' reserves of 4.784 Bcfe. Proved developed producing reserves are
estimated to be 2.025 Bcfe, while the proved developed non-producing reserves
are estimated at 1.761 Bcfe. Proved undeveloped reserves are estimated to be
0.998 Bcfe. Present value, discounted at 10%, is $6,941,000 for total proved
reserves and $3,089,000 for proved developed producing reserves.
In Texas, we have interests in three projects recently acquired from Venus.
The test wells in these three projects are currently at total depth, and are
being production tested, and evaluated. The three wells currently engaged in
operations are subject to a 50% net profits interest payable to the Venus
Exploration Trust.
The Tortuga Grande prospect, located in east Texas, is a re-entry of an
existing well, drilled on a large turtle structure, to test the productivity of
the Cotton Valley Sand section at depths ranging from 13,000 to 14,500 feet.
Drilled originally in 1984 for deeper targets, the Brady #1 is the only deep
well on the structure and had shows in the Cotton Valley Sand but was never
fracture stimulated. Log analysis of the re-entry in which we are currently
involved indicates that the well contains approximately 322 feet of potential
10
pay greater than 8% porosity. Multiple Cotton Valley Sand section have been
fracture treated, and as of October 4, 2004 the partners are evaluating
production test data. Should the fracture treatment prove successful, we believe
that multiple additional development locations would be available to us. We have
a 10% carry through the tanks with an additional 10% working interest, after
well payout, on the initial test well. In all additional locations within the
Tortuga Grande area of mutual interest, we will participate with a cost bearing
20% working interest. We currently control approximately 5,600 net leasehold
acres within the project.
The Nome Field was discovered in 1994, and our interpretation of
subsequently acquired 3D seismic over the field indicates the presence of
numerous undeveloped fault blocks. Multiple structural closures and associated
bright spot locations have been identified at Nome based on the 3D seismic, and
we own a 1.5% overriding royalty interest with an additional 8.33% working
interest, after project payout, in the project. Production from the upper Yegua
was initiated in late May 2004, and as of September 22, 2004 well production had
stabilized at rates in excess of 11 MMcf/d with approximately 700 barrels of oil
per day. We and our partners control approximately 4,200 acres of gross
leasehold acres in the project. We also own additional acreage in the Cotton
Creek prospect, located adjacent to the Nome project.
The Madison prospect, located in the northern part of the Constitution
Field, is an exploitation project to test multiple sand intervals within the
expanded Yegua section, downthrown to a major growth fault. The prospect
involves sidetracking an existing cased hole updip to test multiple sand targets
at a location offsetting, but significantly high to Doyle sand production from
the Texaco #1 Doyle well within the field. The location is also offset to the
Texaco #1 Sanders Gas Unit well which tested the Doyle sand interval at a rate
of 1,176 Bcp/d and 2.7 MMcf/d with no water. This well was subsequently junked
and abandoned in the Doyle interval and never produced from the zone. The
Sanders Gas Unit location represents a proved undeveloped location for Doyle
sand, 183 feet structurally high to the equivalent produced zone in the Texaco
Doyle #1 well. The current well has been drilled to total depth, production
casing has been run, and as of September 22, 2004, the well was producing at
restricted rates of approximately 1.6 MMcf/d with 450 barrels of oil per day. We
own a 0.5% overriding royalty interest that converts to a 12.5% working interest
in the project after payout of the initial test well.
Southeast Alberta Shallow Gas Redevelopment Project:
We have entered into two joint ventures, the Atlas Joint Venture and the
Blue River Joint Venture, to redevelop shallow gas reserves in southeastern
Alberta, Canada. Southeastern Alberta has been the site of significant shallow
gas development drilling and production over the last two decades. Numerous
sandstone reservoirs (including Milk River, Belly River, Medicine Hat, Bow
Island, Glauconite, and Viking), generally shallower than 4,000 feet, have
produced in excess of 10 tcf of natural gas. We have undertaken geologic and
engineering studies of the region, and believe that many wellbores in the region
were prematurely suspended and/or abandoned due to water coning and production.
These premature well abandonments suggest that significant additional reserves
may remain in a number of shallow gas reservoirs in local areas within the
Southeastern Alberta.
Reworking of existing prematurely abandoned wellbores can potentially
result in increased production rates and capture of incremental reserves if
water coning can be reversed and surface water disposal can be mitigated. To
this end, the partners in the Atlas Joint Venture have entered into Exclusive
Supply Agreements with a down hole water disposal tool design and manufacturing
company to supply separation and disposal tools for use in Canada. These tools
are intended to gravity separate gas and water in the wellbore, reverse the flow
11
of water, and inject the water into a disposal zone below the existing
production interval. In this manner, existing wells with water production issues
can potentially have increased gas productivity due to the lack of water coning
and lifting. These down hole disposal tools also remove the issues related to
surface handling and disposal of produced fluids.
We own a 5% working interest in the Atlas Joint Venture, which has
identified multiple potential re-entry and redevelopment opportunities for which
the Joint Venture intends to acquire the right to participate. The first well
has been re-entered, re-perforated, and completed in the upper Bow Island sand.
The well is currently producing into a sales line during long term testing. An
offset wellbore is currently being permitted for re-entry based on results from
the initial well. A number of other prospects are being leased and permitted at
this time.
12
We also own a 25% working interest in the Blue River Joint Venture, which
intends to operate in different areas of southeastern Alberta. Initial
investigation indicates multiple wells that exhibit an appropriate production
type decline curve, potential disposal interval, and gas reservoir. We are
currently undertaking detailed geologic and production analysis to refine
certain areas, for which the Joint Venture will undertake to acquire and develop
prospects for recompletion or drilling.
SELLING STOCKHOLDERS
The table below sets forth the names of each selling stockholder, the
number of shares of common stock owned by each selling stockholder before the
offering and the number of shares of common stock to be offered by each selling
stockholder. This prospectus relates to a total of 18,639,105 shares of common
stock, including (i) 675,000 shares that may be acquired upon exercise of
warrants and (ii) 6,518,702 shares that may be acquired upon conversion of
convertible promissory notes.
Number Of Shares Percentage Of
Number of Shares Number Of Shares Owned After Shares Owned After
Name Owned Before Offering To Be Offered Offering(1) Offering(1)
----------------------------------------------------------------------------------------------------------------------
Crestview Capital Master, L.L.C. 2,627,000(2) 2,627,000 0 0
Ironman Energy Capital, L.P. 1,500,000(2) 1,500,000 0 0
BFS US Special Opportunities Trust 917,500(2) 917,500 0 0
PLC
Renaissance US Growth Investment 917,500(2) 917,500 0 0
Trust PLC
Salt Run Capital, Inc. 918,000(2) 918,000 0 0
James W. Gorman 300,000(2) 300,000 0 0
Joe Sam Robinson, Jr. 125,000(2) 125,000 0 0
12
Number Of Shares Percentage Of
Number of Shares Number Of Shares Owned After Shares Owned After
Name Owned Before Offering To Be Offered Offering(1) Offering(1)
----------------------------------------------------------------------------------------------------------------------
Orrie Lee Tawes 46,000(2) 46,000 0 0
John C. Thompson 46,000(2) 46,000 0 0
U.S. Trust Company, N.A., Trustee 46,000(2) 46,000 0 0
for Charles Knowles Jr., IRA
Bruce E. Lazier 37,000(2) 37,000 0 0
Martin Oring 20,000(2) 20,000 0 0
Black Bear Offshore Master Fund, 6,486,816(3)(4) 6,486,816 0 0
L.P.
Black Bear Fund I, L.P. 3,312,798(3)(5) 3,312,798 0 0
Black Bear Fund II, LLC 353,088(3)(6) 353,088 0 0
Westport Petroleum Inc. 411,403(7) 411,403 0 0
Stonington Corporation 575,000(8) 575,000 0 0
TOTAL SHARES OFFERED 18,639,105 18,639,105 0 0
----------------------------------------------------------------------------------------------------------------------
(1) The Number of Shares Owned After Offering and Percentage Of Shares Owned
After Offering assumes that all shares offered in this prospectus are
actually sold.
(2) These are shares of common stock purchased in our private offering of an
aggregate of 7,500,000 shares of our common stock.
(3) These shares are beneficially owned by Eastbourne Capital Management,
L.L.C., a registered investment advisor that currently holds over 10% of
our equity securities, by Richard Jon Barry, Manager of Eastbourne, and by
the following companies to which Eastbourne is investment advisor: Black
Bear Offshore Master Fund, L.P., a Cayman Islands limited partnership,
Black Bear Fund I, L.P., a California limited partnership, and Black Bear
Fund II, L.L.C., a California limited liability company. When aggregated,
these shares consist of (i) 3,634,000 currently issued and outstanding
shares and (ii) 6,518,702 shares into which the principal and interest
accrued as of May 31, 2004 and accruable through maturity on May 24, 2009
on the convertible promissory notes held by Black Bear Offshore Master
Fund, L.P., Black Bear Fund I, L.P. and Black Bear Fund II, LLC are
convertible. The notes provide, among other things, that the number of
shares of common stock that may be acquired by the noteholders upon any
13
conversion of the notes shall be limited to the extent necessary to ensure
that, following exercise, the total number of shares of common stock then
beneficially owned by a noteholder and its affiliates and any other persons
whose beneficial ownership of common stock would be aggregated with the
beneficial ownership of the noteholders for purposes of Section 13(d) of
the Securities Exchange Act of 1934, as amended, does not exceed 9.999% of
the total number of issued and outstanding shares of common stock
(including for such purposes the shares issuable upon conversion of the
notes). By written notice to the Company at least 60 days prior to the
effective date of the subject of the notice, the noteholder may waive the
provisions limiting conversion or increase or decrease the limiting
percentage to any other percentage specified in the notice.
(4) These shares consist of (i) 2,317,019 currently issued and outstanding
shares and (ii) 4,169,797 shares into which the principal and interest
accrued as of May 31, 2004 and accruable through maturity on May 24, 2009
on the convertible promissorynote held by Black Bear Offshore Master Fund,
L.P. are convertible.
(5) These shares consist of (i) 1,190,310 currently issued and outstanding
shares and (ii) 2,122,488 shares into which the principal and interest
accrued as of May 31, 2004 and accruable through maturity on May 24, 2009
on the convertible promissory note held by Black Bear Fund II, LLC are
convertible.
(6) These shares consist of (i) 126,671 currently issued and outstanding shares
and (ii) 226,417 shares into which the principal and interest accrued as of
May 31, 2004 and accruable through maturity on May 24, 2009 on the
convertible promissoty note held by Black Bear Fund I, L.P. are
convertible.
(7) These shares consist of (i) 311,403 currently issued and outstanding shares
and (ii) 100,000 shares issuable upon exercise of warrants to purchase
shares of common stock . We granted a warrant to purchase 100,000 shares of
our common stock at an exercise price of $0.65 per share to Westport
Petroleum Inc. in connection with a joint venture agreement with Westport
dated December 1, 2003 to redevelop shallow gas reserves in southeastern
Alberta. This warrant expires on December 1, 2006.
(8) These shares consist of 575,000 shares issuable upon exercise of warrants
to purchase shares of common stock. We granted a warrant to purchase
200,000 shares of our common stock at an exercise price of $1.55 per share
to Stonington Corporation, a broker-dealer registered with the National
Association of Securities Dealers, as partial payment for financial
advisory services performed in connection with an undertaking to raise
project financing for the exploration and development of our properties.
This warrant expires on May 9, 2007. We also granted (i) a warrant to
purchase 225,000 shares of our common stock at an exercise price of $1.30
per share and (ii) a warrant to purchase 150,000 shares of our common stock
at an exercise price of $1.24 per share to Stonington Corporation in
partial payment of a commission for financial advisory services performed
in connection with the private placement of our common stock in May and
June, 2004. These warrants expire on May 5, 2009 and June 11, 2009,
respectively.
PLAN OF DISTRIBUTION
We are registering the sale or other transfer of up to 18,639,105 shares of
our common stock on behalf of the selling stockholders, We will bear all fees
and expenses incident to the registration of these shares. We will not receive
any of the proceeds from the sale of these shares.
14
The selling stockholders, or their donees, pledgees, transferees or other
successors in interest, may choose to sell their shares from time to time on any
national securities exchange or quotation service, in the over-the-counter
market, or through the writing of options, at market prices prevailing at the
time of the sale, at prices related to the then prevailing market prices, in
privately negotiated transactions or through a combination of these methods.
The selling stockholders may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the shares in the
course of hedging in positions they assume. The selling stockholders also may
sell shares short and deliver shares to close out short positions, or loan or
pledge shares to broker-dealers that in turn may sell the shares.
If the selling stockholders effect any such transactions by selling shares
to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or commissions from
purchasers of shares from whom they may act as agent or to whom they may sell as
principal (which discounts, concessions or commissions as to particular
underwriters, broker-dealers or agents may be in excess of those customary in
the types of transactions involved).
The selling stockholders and any broker-dealers who act in connection with
the sale of their shares of our common stock under this prospectus may be deemed
to be "underwriters" within the meaning of Section 2(11) of the Securities Act
of 1933 and any commissions received by them and profit on any resale of their
shares of our common stock as principals might be deemed to be underwriting
discounts and commissions under the Securities Act. We have agreed to indemnify
the selling stockholders and any such brokers against certain liabilities,
including liabilities under the Securities Act as underwriters or otherwise.
The selling stockholders and any other person participating in the
distribution will be subject to applicable provisions of the Securities Exchange
Act and the rules and regulations under the Securities Exchange Act, including,
without limitation, Regulation M of the Securities Exchange Act, which may limit
the timing of purchases and sales of any of the offered securities by the
selling stockholders and any other relevant person. Furthermore, Regulation M
may restrict the ability of any person engaged in the distribution of the
offered securities to engage in market-making activities with respect to the
particular shares being distributed. All of the above may affect the
marketability of the shares and the ability of any person or entity to engage in
market-making activities with respect to the shares.
LEGAL MATTERS
Patton Boggs LLP, Denver, Colorado, has acted as our counsel in connection
with this offering, including the validity of the issuance of the securities
offered under this prospectus. Attorneys employed by that law firm beneficially
own approximately 34,000 shares of our common stock.
EXPERTS
The financial statements of PYR Energy Corporation appearing in our Annual
Report on Form 10-K for the fiscal year ended August 31, 2003 have been audited
by Wheeler Wasoff, P.C., independent auditors, as set forth in their report
included in the Annual Report and incorporated in this prospectus by reference.
The Historical Summaries of Revenues and Direct Operating Expenses of the
Properties Acquired in May 2004 by PYR Energy Corporation for the year ended
August 31, 2003 appearing in our Form 8-K/A (Amendment No. 1), filed with the
15
Securities and Exchange Commission on July 2, 2004 have been audited by Hein &
Associates LLP, independent auditors, as set forth in their report included in
that Form 8-K/A and incorporated in this prospectus by reference. The foregoing
financial statements are incorporated in this prospectus by reference in
reliance upon the reports of the independent auditors and upon the authority of
those firms as experts in auditing and accounting.
SECURITIES AND EXCHANGE COMMISSION
POSITION ON CERTAIN INDEMNIFICATION
The General Corporation Law of the State of Maryland (the "Maryland Code")
provides for mandatory indemnification against reasonable expenses incurred by
directors and officers of a corporation in connection with an action, suit or
proceeding brought by reason of their position as a director or officer if they
are successful, on the merits or otherwise, in defense of the proceeding. The
Maryland Code also allows a corporation to indemnify directors or officers in
such proceedings if the director or officer acted in good faith, in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, in the case of a criminal proceeding, he had no reasonable
cause to believe that his conduct was unlawful.
The Maryland Code permits a corporation to expand the rights to
indemnification by a provision in its bylaws, by an agreement, by resolution of
stockholders or directors not involved in the proceeding, or otherwise. However,
a corporation may not indemnify a director or officer if the proceeding was one
by or on behalf of the corporation and in the proceeding the director or officer
is adjudged to be liable to the corporation. Our Bylaws provide that we are
required to indemnify our directors and officers to the fullest extent permitted
by law, including those circumstances in which indemnification would otherwise
be discretionary.
In addition to the general indemnification described above, we have
adopted, in our articles of incorporation, a provision under the Maryland Code
that eliminates and limits certain personal liability of directors and officers
for monetary damages for breaches of the fiduciary duty of care.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, we have been informed that, in the opinion
of the SEC, indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus constitutes a part of a registration statement on Form S-3
we filed with the SEC under the Securities Act. This prospectus does not contain
all the information set forth in the registration statement and exhibits
thereto, and statements included in this prospectus as to the content of any
contract or other document referred to are not necessarily complete. For further
information, please review the registration statement and the exhibits and
schedules filed with the registration statement.
In each instance where a statement contained in this prospectus regards the
contents of any contract or other document filed as an exhibit to the
registration statement, you shall review the copy of that contract or other
document filed as an exhibit to the registration statement for complete
information. Those statements are qualified in all respects by this reference.
We are subject to the informational requirements of the Securities Exchange
Act, and we file reports, proxy statements and other information with the SEC in
accordance with the Securities Exchange Act. These reports, proxy statements and
other information can be inspected and copied at the public reference facilities
16
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. In
addition, these materials filed electronically by the Company with the SEC are
available at the SEC's World Wide Web site at http://www.sec.gov. The SEC's
World Wide Web site contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the SEC.
Information about the operation of the SEC's public reference facilities may be
obtained by calling the SEC at 1-800-SEC-0330.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" the information we file
with them, which means: incorporated documents are considered part of this
prospectus; we can disclose important information to you by referring to those
documents; and information we file with the Securities and Exchange Commission
will automatically update and supersede this incorporated information.
We incorporate by reference the documents listed below, which were filed
with the SEC under the Securities Exchange Act:
o Our Annual Report on Form 10-K for the year ended August 31, 2003;
o Our Quarterly Reports on Form 10-QSB for the quarters ended November
30, 2003, February 29, 2004 and May 31, 2004;
o Our Current Reports on Form 8-K reporting events occurring on each of
December 11, 2003, December 15, 2003, January 14, 2004, January 20,
2004, March 17, 2004, April 5, 2004, April 15, 2004, May 6, 2004, May
12, 2004, July 2, 2004, July 16, 2004, July 19, 2004, September 9,
2004 and September 22, 2004;
o Our Proxy Statement dated May 7, 2004 concerning our Annual Meeting of
Stockholders held on June 11, 2004;
o Any documents filed under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act subsequent to the date of this prospectus and
prior to the termination of the offering made under this prospectus;
and
o The description of our common stock contained in our Form 8-A filed
with the SEC on December 7, 1999.
We will provide without charge to each person to whom a copy of this
prospectus has been delivered, upon request, a copy of any or all of the
documents referred to above that have been or may be incorporated in this
prospectus by reference. Requests for copies should be directed to D. Scott
Singdahlsen, President, PYR Energy Corporation, 1675 Broadway, Suite 2450,
Denver, Colorado 80202, telephone (303) 825-3748.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
AND CAUTIONARY STATEMENTS
This prospectus and the documents incorporated into this prospectus by
reference include "forward-looking statements" within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act. All statements other
than statements of historical fact included in or incorporated into this
prospectus regarding our financial position, business strategy, plans and
objectives of our management for future operations and capital expenditures are
forward-looking statements. Although we believe that the expectations reflected
17
in the forward-looking statements and the assumptions upon which the
forward-looking statements are based are reasonable, we can give no assurance
that those expectations and assumptions will prove to have been correct.
Additional statements concerning important factors that could cause actual
results to differ materially from our expectations ("Cautionary Statements") are
disclosed in the "Risk Factors" section and elsewhere in this prospectus and the
documents incorporated into this prospectus by reference. All written and oral
forward-looking statements attributable to us or persons acting on our behalf
subsequent to the date of this prospectus are expressly qualified in their
entirety by the Cautionary Statements.
Our intentions and expectations described in this prospectus and the
documents incorporated into this prospectus by reference with respect to
possible exploration and other testing activities concerning properties in which
we hold interests may be deemed to be forward-looking statements. These
statements are made based on management's current assessment of the exploratory
merits of the particular property in light of the geological information
available at the time and based on our relative interest in the property and our
estimate of our share of the exploration costs. Subsequently obtained
information concerning the merits of any property as well as changes in
estimated exploration cost and ownership interests may result in revisions to
management's expectations and intentions and thus we may delete one or more of
these intended exploration activities. Further, circumstances beyond our control
may cause such prospects to be eliminated from further consideration as
exploration prospects. Actual results could differ materially from these
forward-looking statements as a result of, among other things:
o failure to obtain, or a decline in, oil or gas production, or a
decline in oil or gas prices;
o incorrect estimates of required capital expenditures;
o increases in the cost of drilling, completion and gas collection or
other costs of production and operations;
o an inability to meet growth projections; and
o other risk factors set forth under "Risk Factors" in this prospectus.
In addition, the words "believe", "may", "could", "will", "when",
"estimate", "continue", "anticipate", "intend", "expect" and similar
expressions, as they relate to PYR Energy, our business or our
management, are intended to identify forward-looking statements.
18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
-----------------------------------------------------
The following is an itemization of all expenses (subject to future
contingencies) incurred or to be incurred by the Registrant in connection with
the registration of the securities being offered. The selling stockholders will
not pay any of the following expenses.
Registration Fee $ 2,863
American Stock Exchange Additional Listing Fee 50,000
Accounting Fees and Expenses* 3,000
Legal Fees and Expenses* 20,000
Registrar and Transfer Agent Fee* 700
-------
Total $76,563
* Estimated
Item 15. Indemnification of Directors and Officers.
---------------------------------------------------
Section 2-418 of the General Corporation Law of the State of Maryland (the
"Maryland Code") provides for mandatory indemnification against reasonable
expenses incurred by directors and officers of a corporation in connection with
an action, suit or proceeding brought by reason of their position as a director
or officer if they are successful, on the merits or otherwise, in defense of the
proceeding. In addition, a corporation may indemnify directors or officers in
such proceedings if the director or officer acted in good faith, in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, in the case of a criminal proceeding, he had no reasonable
cause to believe that his conduct was unlawful.
The Maryland Code also permits a corporation to expand the rights to
indemnification by a provision in its bylaws, by an agreement, by resolution of
stockholders or directors not involved in the proceeding, or otherwise. However,
a corporation may not indemnify a director or officer if the proceeding was one
by or on behalf of the corporation and in the proceeding the director of officer
is adjudged to be liable to the corporation.
The Company's Bylaws provide that the Company is required to indemnify its
directors and officers to the fullest extent permitted by law, including those
circumstances in which indemnification would otherwise be discretionary. The
Company also has adopted, in its Articles of Incorporation, a provision under
Section 2-405.2 of the Maryland Code that eliminates and limits certain personal
liability of directors and officers for monetary damages for breaches of the
fiduciary duty of care.
Item 16. Exhibits.
------------------
4.1 Specimen Common Stock Certificate. Incorporated by reference from the
Company's Form 10-KSB/A1 for the year ended August 31, 1997.
5.1* Opinion of Patton Boggs LLP regarding legality.
19
23.1* Consent of Wheeler Wasoff, P.C.
23.2* Consent of Hein + Associates, LLP.
23.3* Consent of Patton Boggs LLP (included in the opinion regarding
legality set forth in Exhibit 5.1).
24.1 Power of Attorney (included on the signature page of this registration
statement).
---------------
* Filed herewith.
20
Item 17. Undertakings.
----------------------
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3, and if
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 and are incorporated by
reference to the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
20
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado, on the 5th day of October,
2004.
PYR ENERGY CORPORATION
By: /s/ D. Scott Singdahlsen
-------------------------------------
D. Scott Singdahlsen, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and directors
of the Registrant, by virtue of their signatures to this registration statement
appearing below, hereby constitute and appoint D. Scott Singdahlsen, with full
power of substitution, as attorney-in-fact in their names, place and stead to
execute any and all amendments to this registration statement in the capacities
set forth opposite their name and hereby ratify all that said attorney-in-fact
or his substitutes may do by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ D. Scott Singdahlsen Chairman of the Board, October 5, 2004
------------------------ Chief Executive Officer
D. Scott Singdahlsen and President (Principal
Executive Officer)
/s/ S.L. Hutchinson Director October 5, 2004
------------------------
S. L. Hutchison
/s/ David Kilpatrick Director October 5, 2004
------------------------
David Kilpatrick
/s/ Bryce W. Rhodes Director October 5, 2004
------------------------
Bryce W. Rhodes
/s/ D. Scott Singdahlsen Principal Financial and October 5, 2004
------------------------ Accounting Officer
D. Scott Singdahlsen
EXHIBIT INDEX
(Attached To And Made A Part Of This Registration Statement On Form S-3
For PYR Energy Corporation Dated October 5, 2004)
The following is a complete list of Exhibits filed as part of this Registration
Statement, which exhibits are incorporated by reference herein:
Number Description
------ -----------
4.2 Specimen Common Stock Certificate. Incorporated by reference from
the Company's Form 10-KSB/A1 for the year ended August 31, 1997.
5.1* Opinion of Patton Boggs LLP regarding legality.
23.1* Consent of Wheeler Wasoff, P.C.
23.2* Consent of Hein + Associates, LLP.
23.3* Consent of Patton Boggs LLP (included in the opinion regarding
legality set forth in Exhibit 5.1).
24.1 Power of Attorney (included on the signature page of this
registration statement).
---------------
* Filed herewith.