UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 31, 2007
ISRAMCO, INC.
(Exact name of registrant as specified in its charter)
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Delaware 0-12500 13-3145265
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
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4801 WOODWAY DRIVE SUITE 100E, HOUSTON, TX 77056
(Address of principal executive offices, including Zip Code)
713-621-3882
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
EXPLANATARY NOTE
Isramco Inc. hereby amends the Current Report that it filed on January 7, 2008
(the "Original 8-K"), to correct the financial statement implications of the
transactions described therein. In the last paragraph under Item 2.01 of the
Original 8-K, the Company mistakenly disclosed that it anticipated reporting in
its financial statements for the year ended December 31, 2007 a $5 million loss
(before tax) in connection with the reported transaction. The Original 8-k is
being revised to reflect an anticipated reduction in such financial statements
of $5 million of additional capital paid in rather than a loss.
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
The disclosures contained in Item 2.01 below are hereby incorporated by
reference.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
On December 31, 2007, Isramco Inc. (the "Company") and I.O.C- Israel Oil Company
Ltd, an Israeli company and related party ("IOC"), entered into an agreement
pursuant to which the Company sold and transferred to IOC its Israeli based
activities and assets currently conducted and managed by the Company's Israel
branch office (the "Branch Office") for aggregate consideration of approximately
$13.6 million. Following the sale of these assets, the Company no longer
conducts operations in Israel though it will continue to hold working interests
in certain oil and gas assets offshore Israel. The decision was taken in light
of the Company's expanding oil and gas operations in the United States and
management's decision that it is the Company's best interests that the Company
focus on the oil and gas operations in the United States and terminate
activities in Israel which, prior to the sale transaction reported hereunder,
comprised a relatively insignificant component of the Company's overall
operations.
The principal assets transferred to IOC include participation units in the
Israeli oil and gas limited partnerships Isramco Negev 2 ("Negev") and INOC Dead
Sea ("Dead Sea"), both of which were held by the Branch Office. The
participation units of each of Negev and Dead Sea trade on the Tel Aviv Stock
Exchange. The sale of the units was completed through a private non-market
transaction with IOC where the sale price of the Negev and Dead Sea units was
established at, respectively, a 7% and 10% discount to the closing sale price of
these units on the Tel Aviv Stock Exchange on December 30, 2007. The discounts
were established by an independent appraiser. The Branch Office also transferred
to IOC all operating activities at the Branch Office, including, employees,
fixed assets, marketable securities and certain rights and liabilities, as well
as the Company's holdings of Isramco Oil and Gas Ltd. and title to undeveloped
real estate located in Israel.
IOC is a wholly-owned subsidiary of Naphtha Israel Petroleum Corp, Ltd.
("Naphtha"). Naphtha holds 100% of Naphtha Holdings Ltd. , which holds
approximately 48% of the Company's issued and outstanding stock.
The proceeds of the sale were used by the Company to retire in full the loan
that IOC advanced to the Company in March 2007 for purposes of enabling the
Company to complete the acquisition from Five States Company, L.L.C. ("Five
States") of certain oil and gas properties in the United States. The outstanding
balance of the loan from IOC to the Company as of December 31, 2007 was
approximately $12.9 million. The remaining proceeds of the sale were used to pay
down part of the interest accrued on the loan advanced by Naphtha to the Company
in connection with the acquisition from Five States.
The difference between the investment in the Negev 2 and Dead Sea units as
recorded in the Company's financial statements (equity method) and the
consideration paid by IOC for said participation units in the above reported
transaction (i.e., the closing sale price of these units on the Tel Aviv Stock
Exchange on December 30, 2007, LESS the discounts referred to above that were
determined by the independent appraiser) was $5 million. Since this is a
transaction between entities under common control, the Company anticipates that
it will record in its financial statements for the year ended December 31, 2007,
the $5 million excess of net book value over sale price as a reduction of
additional paid in capital.
ITEM 2.05. COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES
The disclosures contained in Item 2.01 below are hereby incorporated by
reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits:
None
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.
DATED: JANUARY 17, 2008 ISRAMCO, INC.
BY: /s/ Haim Tsuff
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HAIM TSUFF
CHIEF EXECUTIVE OFFICER