CREDO Petroleum Corporation Announces Closing of Strategic Investment in the Company by RCH Energy
July 10 2008 - 7:00AM
Business Wire
CREDO Petroleum Corporation (NASDAQ:CRED), an independent oil and
gas company, reported today that the previously announced
transaction with RCH Energy closed on July 3, 2008, and that Alford
B. Neely has been elected to serve as the company�s Vice President
and Chief Financial Officer. RCH ENERGY INVESTMENT IN CREDO CLOSED
AND TWO RCH REPRESENTATIVES ELECTED TO THE BOARD OF DIRECTORS RCH
Energy Opportunity Fund II, LP and RCH Energy Opportunity Fund III,
LP (�RCH� or the �Funds�) have acquired 17.5% of CREDO�s
outstanding common stock, or 1,837,000 shares, at a price of $14.50
per share. The Funds are public/private oil and gas exploration and
production equity investment funds based in Dallas, Texas. All of
the shares acquired by RCH will initially be restricted and not
freely tradable in the open market, however, RCH has certain future
registration rights. The stock purchase agreement contains a
standstill provision providing that RCH will not purchase
additional CREDO stock for a period of two years from the date of
the agreement without the consent of the Board of Directors.
Pursuant to the agreements, CREDO�s Board of Directors has been
expanded to seven members including two directors nominated by RCH,
W. Mark Meyer and John A. Rigas, who have been elected to the
Board. Mr. Meyer is President of RR Advisors, LLC, the General
Partner of the Funds, and he is a Principal of the Funds. Mr. Meyer
graduated from Texas A&M University in 1986 with a Bachelor of
Science Degree (cum laude) in Petroleum Engineering. His industry
career involved domestic and international operational engineering
and managerial assignments with Exxon, Chevron and Union Texas
Petroleum. After receiving his MBA from the University of Chicago
in 1996, he worked as a management consultant with A.T. Kearney.
More recently, Mr. Meyer was an energy Portfolio Manager for
CastleArk Management, a Chicago-based investment counsel, and a
Senior Equity Research Analyst of the exploration and production
sector for Simmons & Company International and Goldman Sachs.
Mr. Meyer is a past director of GFI Oil & Gas Corp. and is
currently a director of several RCH Energy portfolio companies. Mr.
Rigas is Vice President of RR Advisors, LLC and a Partner in the
Funds. He graduated from Texas A&M University in 1986 with a
Petroleum Engineering degree. His industry career has involved oil
and gas operation and energy trading assignments with Atlantic
Richfield Company (ARCO) and Vastar Oil and Gas. In 1998, Mr. Rigas
served on the senior management team of the energy capital group at
Mirant Energy. While at Mirant he was responsible for originating,
structuring, closing and managing upstream mezzanine debt and
equity facilities. More recently, Mr.�Rigas was a principal in
Odyssey Energy Capital I, LP, managing a portfolio of oil and gas
mezzanine loans and an independent consultant in business
development for various oil and gas companies. He is currently a
director of several RCH Energy portfolio companies. James T.
Huffman, CREDO�s Chief Executive Officer and Chairman of the Board
of Directors, stated, �The RCH transaction represents the
culmination of an extensive evaluation process started last year
whereby the company�s management and directors, in consultation
with Merrill Lynch & Co., have thoroughly reviewed and explored
strategic options and alternatives available to CREDO. In addition
to new capital, this transaction brings directors to CREDO�s Board
who have extensive oil and gas engineering backgrounds as well as
financial and capital market experience in the oil and gas
industry. RCH is a successful and highly regarded investor in oil
and gas companies, both public and private. We are excited about
the knowledge and experience they will bring to our business, and
we are pleased to have RCH as a strategic partner.� �CREDO has a
strong asset base with excellent growth potential in both its
conventional oil and gas and intellectual property assets,� Huffman
said. �The RCH transaction will allow us to accelerate development
of our oil and gas properties and to consolidate our Calliope
ownership. Both CREDO and RCH expect this relationship to
substantially increase CREDO�s opportunities to monetize Calliope.�
ALFORD B. NEELY ELECTED VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Effective immediately, Alford B. Neely has been elected as the
company�s Vice President and Chief Financial Officer. Mr. Neely has
served as the company�s Manager of Regulatory Compliance since July
2006 and was formerly the company�s Vice President and Chief
Financial Officer from 1998 to 2000. Mr. Neely replaces David E.
Dennis who has been serving on a part time basis as the company�s
interim Chief Financial Officer. Huffman further stated, �Al Neely
served as CREDO�s Vice President and Chief Financial Officer until
he left to join his family business. He returned to CREDO in 2006
just as we were implementing Sarbanes-Oxley regulations and he has
managed the company�s regulatory compliance during the critical
period of SOX implementation. We are very confident in Al�s
capabilities and we are pleased to elevate him back to the position
of Chief Financial Officer.� Mr. Neely was previously Vice
President Finance of Unidata, Inc. He also served as a Director of
Sprint Corporation and Senior Vice President Finance and
Administration of Technical Oil Tool Corporation (a subsidiary of
Baker Oil Tools). He graduated with a B. S. Degree in Accounting
from California State Polytechnic University and initially joined
the audit staff at Deloitte & Touche. About CREDO Petroleum
Corporation � CREDO Petroleum Corporation is a publicly traded
independent energy company headquartered in Denver, Colorado. The
company is engaged in the exploration for and the acquisition,
development and marketing of natural gas and crude oil and in
application of its patented Calliope Gas Recovery System. CREDO
owns working and royalty interests in approximately 1,445 wells.
The company�s stock is traded on the NASDAQ System under the symbol
�CRED� and is quoted daily in the �NASDAQ Global Market� section of
The Wall Street Journal. About RCH Energy Opportunity Fund II, LP
and RCH Energy Opportunity Fund III, LP � RCH Energy Opportunity
Fund II, LP and RCH Energy Opportunity Fund III, LP are private
investment funds headquartered in Dallas, Texas that focus
exclusively on the oil and gas sector. The Funds� investments in
CREDO Petroleum Corporation are managed by John A. Rigas and W.
Mark Meyer, both of whom have extensive operating, technical and
financial experience in the oil and gas industry. For more
information about the company, visit http://www.credopetroleum.com.
This press release includes certain statements that may be deemed
to be �forward-looking statements� within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements
included in this press release, other than statements of historical
facts, address matters that the company reasonably expects,
believes or anticipates will or may occur in the future. Such
statements are subject to various assumptions, risks and
uncertainties, many of which are beyond the control of the company.
Investors are cautioned that any such statements are not guarantees
of future performance and that actual results or developments may
differ materially from those described in the forward-looking
statements. Investors are encouraged to read the �Forward-Looking
Statements� and �Risk Factors� sections included in the company�s
2007�Annual Report on Form 10-K for more information. Although the
company may from time to time voluntarily update its prior forward
looking statements, it disclaims any commitment to do so except as
required by securities laws.
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