UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): December 1,
2010
West Canyon Energy
Corp.
(Exact name of registrant as specified in charter)
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Nevada
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333-130673
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20-8756823
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(State or other jurisdiction of
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(Commission File Number)
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(IRS Employer Identification No.)
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incorporation)
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20333 State Highway 249
Suite 200 - 113
Houston, TX
77070-26133
Registrant's telephone number, including area code: (281)
378-1563
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 1.01 Entry into a Material Definitive
Agreement.
On October 27, 2010, the Company
entered into a letter agreement with Petrodorado Energy Ltd. (“Petrodorado”)
with respect to the sale by the Company of its wholly-owned subsidiary
PetroSouth Energy Corp. BVI, including the Company’s interest in the Talora
Exploration Block but excluding the Company’s interest in the Buenavista Block,
to Petrodorado for $1.5 million. Upon executing the letter agreement,
Petrodorado advanced the entire $1.5 million purchase price to the Company. The
Company was obligated to pay a finder’s fee related to the sale.
On December 1, 2010, the Company
completed all the conditions stipulated to close the transaction.
Item 2.01 Completion of Acquisition or
Disposition of Assets.
On October 27, 2010, the Company
entered into a letter agreement with Petrodorado Energy Ltd. (“Petrodorado”)
with respect to the sale by the Company of its wholly-owned subsidiary
PetroSouth Energy Corp. BVI, including the Company’s interest in the Talora
Exploration Block but excluding the Company’s interest in the Buenavista Block,
to Petrodorado for $1.5 million. Upon executing the letter agreement,
Petrodorado advanced the entire $1.5 million purchase price to the Company. The
Company was obligated to pay a finder’s fee related to the sale.
On December 1, 2010, the Company
completed all the conditions stipulated to close the transaction.
Item 9.01 Financial Statements and
Exhibits
(a) Financial statements of businesses
acquired.
Not applicable
(b) Pro forma financial information.
On October 27, 2010, the Company
entered into a letter agreement with Petrodorado Energy Ltd. (“Petrodorado”)
with respect to the sale by the Company of its wholly-owned subsidiary
PetroSouth Energy Corp. BVI, including the Company’s interest in the Talora
Exploration Block but excluding the Company’s interest in the Buenavista Block,
to Petrodorado for $1.5 million. Upon executing the letter agreement,
Petrodorado advanced the entire $1.5 million purchase price to the Company. The
Company was obligated to pay a finder’s fee related to the sale.
On December 1, 2010, the Company
completed all the conditions stipulated to close the transaction.
At June 30, 2009, the Company
owned a 6% participation interest in approximately 64,000 acres in the Carbonera
Block located Northeast of Bogota, Colombia. The project was near the Venezuelan
border in the Catatumbo Basin in Northeastern Colombia. On September 22, 2009,
the Company entered into an agreement with Delavco Energy Colombia Inc. Sucursal
Colombia pursuant to which the Company agreed to sell 100% of its 6%
non-operated participation interest in the Carbonera Block for $750,000. Closing
of the agreement took place on October 2, 2009. The Company’s former chief
financial officer and director is also a consultant of Delavco Energy Colombia
Inc. The $750,000 of proceeds was accounted for as a reduction of Unproved
Interest. As this transaction did not represent 25% of the Company’s reserve
base in Colombia, the Company did not recognize any gain or loss on this
transaction at that time.
The unaudited pro forma
consolidated financial information presented below illustrates the effect of the
disposition of the Company’s interests in its wholly-owned subsidiary PetroSouth
Energy Corp. BVI, including the Company’s interest in the Talora Exploration
Block but excluding the Company’s interest in the Buenavista Block, and the
Company’s 6% participation interest in the Carbonera Block (“Sold Assets”). The
unaudited pro forma consolidated balance sheet as of September 30, 2010 is based
on the historical statements of the Company as of September 30, 2010, after
giving effect to the disposition of the Sold Assets as if it had occurred on
September 30, 2010. The unaudited pro forma consolidated statements
of operations for the three months ended September 30, 2010, and the fiscal year ended June 30, 2010, are based on the historical financial statements of the Company for such periods after giving effect to the disposition of the Sold Assets, as if
it had occurred on July 1, 2009. The unaudited pro forma financial information should be read in conjunction with the Company’s historical consolidated financial statements and notes thereto contained in the Company’s 2010 Form 10-K
filed with the SEC on November 15, 2010.
The preparation of the unaudited pro forma consolidated financial information is based on financial statements prepared in accordance with accounting principles generally accepted in the United States of America. These
principles require the use of estimates that affect the reported amounts of revenues and expenses. Actual results could differ from those estimates. The unaudited pro forma consolidated financial information is provided for illustrative purposes
only and does not purport to represent what the actual results of operations would have been had the transactions occurred on the respective date assumed, nor is it necessarily indicative of the Company’s future operating results. However, the
pro forma adjustments reflected in the accompanying unaudited pro forma consolidated financial information reflect estimates and assumptions that the Company’s management believes to be reasonable.
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WEST CANYON ENERGY CORP. AND SUBSIDIARY
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(An Exploration Stage Company)
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UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
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(Stated in U.S. Dollars)
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September 30, 2010
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Historical
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Adjustments
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Pro
Forma
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ASSETS
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CURRENT ASSETS:
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Cash and Cash Equivalents
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$
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20,938
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$
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1,410,000
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(1)
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$
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1,430,938
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Advances to Operators
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146,043
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-
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146,043
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Accounts Receivable
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27,065
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-
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27,065
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Prepaid Expenses and Other Current Assets
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44,914
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-
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44,914
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Total Current Assets
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238,960
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1,410,000
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1,648,960
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Unproved Interest
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3,640,533
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(1,396,853
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)
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(2)
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2,243,680
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Furniture & Equipment, net
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1,827
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-
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1,827
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Total Assets
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$
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3,881,320
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$
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13,147
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$
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3,894,467
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
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Accounts Payable - Trade
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$
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263,357
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$
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-
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$
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263,357
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Accrued Interest Payable
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56,626
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-
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56,626
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Accrued Liabilities
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9,260
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-
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9,260
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Advances
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1,190,000
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-
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1,190,000
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Note Payable
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600,000
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-
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600,000
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Other Liabilities
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87,218
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-
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87,218
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Total Current Liabilities
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2,206,461
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-
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2,206,461
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STOCKHOLDERS’ EQUITY:
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Common Stock:
Authorized:
150,000,000 shares, par value $0.001
Issued and outstanding:
21,206,667 shares at September 30, 2010
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21,207
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-
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21,207
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Additional Paid-In Capital
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6,421,969
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-
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6,421,969
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Deficit Accumulated During the Exploration
Stage
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(4,759,368
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)
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13,147
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(2)
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(4,746,221
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)
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Accumulated Other Comprehensive Loss
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(8,949
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)
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-
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(8,949
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)
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Total Stockholders' Equity
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1,674,859
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13,147
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1,688,006
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Total Liabilities and Stockholders' Equity
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$
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3,881,320
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$
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13,147
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$
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3,894,467
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Pro Forma Adjustments:
The unaudited pro forma consolidated balance sheet at September
30, 2010, reflects the following adjustments:
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(1)
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Adjustment to reflect the net cash proceeds from the sale
by the Company of its wholly-owned subsidiary, PetroSouth Energy Corp.
BVI, including the Company’s interest in the Talora Exploration
Block.
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(2)
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Adjustment to eliminate the net carrying value of the
Unproved Interest associated with the Sold Assets and recognition of the
net gain on the sale as if the disposition had occurred June 30,
2010.
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WEST CANYON ENERGY CORP AND SUBSIDIARY
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(An Exploration Stage Company)
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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF
OPERATIONS
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(Stated in U.S. Dollars)
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For the Three Months Ended September 30, 2010
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Historical
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Adjustments
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Pro Forma
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REVENUE
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$
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-
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$
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-
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$
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-
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OPERATING EXPENSES:
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General & Administrative
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61,017
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(4,370
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)
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(1)
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56,647
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61,017
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(4,370
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)
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56,647
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OPERATING LOSS
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(61,017
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)
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4,370
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(56,647
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)
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Gain on Sale of Assets
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-
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13,147
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(2)
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13,147
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Interest Expense, net
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(15,638
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)
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-
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(15,638
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)
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Income (Loss) Before Income Taxes
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(76,655
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)
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17,517
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(59,138
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Income Taxes
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-
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-
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-
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Net Income (Loss)
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(76,655
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)
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17,517
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(59,138
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)
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Foreign Currency Translation
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(3,043
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)
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-
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(3,043
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)
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Comprehensive Income (Loss)
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$
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(79,698
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)
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$
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17,517
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$
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(62,181
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)
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Pro Forma Adjustments:
The unaudited pro forma statement of consolidated operations
for the three months ended September 30, 2010, reflects the following
adjustments:
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(1)
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Adjustment to eliminate General and Administrative
expenses associated with the Sold Assets.
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(2)
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Adjustment to record gain on disposition of the Sold
Assets as if the disposition has occurred on July 1,
2009.
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WEST CANYON ENERGY CORP AND SUBSIDIARY
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(An Exploration Stage Company)
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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF
OPERATIONS
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(Stated in U.S. Dollars)
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For the Year Ended June 30, 2010
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Historical
|
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Adjustments
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Pro Forma
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REVENUE
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$
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-
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$
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-
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$
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-
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OPERATING EXPENSES:
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General & Administrative
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487,845
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(78,543
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)
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(1)
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409,302
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487,845
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(78,543
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)
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409,302
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OPERATING LOSS
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(487,845
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)
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78,543
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(409,302
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)
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Interest Expense, net
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(63,780
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)
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-
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(63,780
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)
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Gain on Forgiveness of Debt
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906,250
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-
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906,250
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Gain on Sale of Assets
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-
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13,147
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(2)
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13,147
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Other Income, net
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2,193
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-
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2,193
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Income Before Income Taxes
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356,818
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91,690
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448,508
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Income Taxes
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-
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-
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-
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Net Income
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356,818
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91,690
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448,508
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Foreign Currency Translation
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(1,009
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)
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-
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(1,009
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)
|
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Comprehensive Income
|
$
|
355,809
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$
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91,690
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$
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447,499
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Pro Forma Adjustments:
The unaudited pro forma statement of consolidated operations
for the year ended June 30, 2010, reflects the following adjustments:
|
(1)
|
Adjustment to eliminate General and Administrative
expenses associated with the Sold Assets.
|
|
(2)
|
Adjustment to record gain on disposition of the Sold
Assets as if the disposition has occurred on July 1,
2009.
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(c) Shell company transactions.
Not applicable
(d) Exhibits
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.
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WEST CANYON ENERGY CORP.
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Dated: December 6, 2010
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By:
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/s/
Shane Reeves
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Name:
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Shane Reeves
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Title:
|
President
|
West Canyon Energy (CE) (USOTC:WCYN)
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