Abraxas (AXAS) to Sell Nordheim Project Stake in $19.1M Deal; Will Reduce Borrowings
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Abraxas Petroleum Corporation (NASDAQ: AXAS) is pleased to provide the following divestiture and financial update.
Nordheim Definitive Agreement
Abraxas today signed an agreement to sell the Company’s 25% working interest at the Nordheim Project in the Eagle Ford shale to a large institutional buyer for proceeds of $19.1mm. The sale is subject to customary closing conditions and purchase price adjustments and reflects an effective date of September 1, 2012. The asset consists of 544 net acres in DeWitt County, Texas and approximately 64 boepd (56% gas; 26% NGLs; 26% oil) of net production. Abraxas will retain the rights to its Edwards production, reserves and upside across both its Nordheim and Wagner lease blocks. Closing is scheduled for December 17, 2012. Petrie Partners acted as financial advisor for Abraxas on the sale.
Financial Update
Per the Abraxas’ November 12, 2012 release, the Company’s borrowing base was recently raised to $150mm from its previous level of $140mm. As of quarter end September 30, 2012, the Company had $134mm drawn on the facility and $2.6mm in cash. The $150mm borrowing base already reflects the removal of reserves and production associated with the Nordheim sale. In addition to the $19.1mm Nordheim sale, the company recently announced the sale of its Alberta Basin properties in Montana for $2.85mm. The approximately $22mm of combined proceeds from these sales will immediately go to reducing borrowings on the revolver, which stood at $134mm at quarter end. Thus, pro forma liquidity post the sales will reflect current borrowings, less net proceeds from the sales, compared to a $150mm borrowing base.
Nordheim Definitive Agreement
Abraxas today signed an agreement to sell the Company’s 25% working interest at the Nordheim Project in the Eagle Ford shale to a large institutional buyer for proceeds of $19.1mm. The sale is subject to customary closing conditions and purchase price adjustments and reflects an effective date of September 1, 2012. The asset consists of 544 net acres in DeWitt County, Texas and approximately 64 boepd (56% gas; 26% NGLs; 26% oil) of net production. Abraxas will retain the rights to its Edwards production, reserves and upside across both its Nordheim and Wagner lease blocks. Closing is scheduled for December 17, 2012. Petrie Partners acted as financial advisor for Abraxas on the sale.
Financial Update
Per the Abraxas’ November 12, 2012 release, the Company’s borrowing base was recently raised to $150mm from its previous level of $140mm. As of quarter end September 30, 2012, the Company had $134mm drawn on the facility and $2.6mm in cash. The $150mm borrowing base already reflects the removal of reserves and production associated with the Nordheim sale. In addition to the $19.1mm Nordheim sale, the company recently announced the sale of its Alberta Basin properties in Montana for $2.85mm. The approximately $22mm of combined proceeds from these sales will immediately go to reducing borrowings on the revolver, which stood at $134mm at quarter end. Thus, pro forma liquidity post the sales will reflect current borrowings, less net proceeds from the sales, compared to a $150mm borrowing base.
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