Resaca Exploitation Inc Planned Asset Dispositions (1075O)
October 08 2012 - 1:00AM
UK Regulatory
TIDMRSOX
RNS Number : 1075O
Resaca Exploitation Inc
08 October 2012
For immediate release 8 octoBER 2012
Resaca Exploitation, Inc.
("Resaca" or "the Company")
Planned Asset Dispositions
Resaca (AIM:RSOX), the oil and natural gas production,
exploitation, and development company focused on the Permian Basin
in the USA, announces an update on certain corporate matters.
After considerable effort over the past year to pursue
alternative opportunities for Resaca and its shareholders, Resaca's
Board of Directors has determined the best course of action for the
Company's is the sale of its Cooper Jal Unit and Langlie Jal Unit
located within the prolific Southeastern New Mexico portion of the
Permian Basin. The Company has engaged Albrecht & Associates,
Inc. to market the sale of these properties. Sales proceeds from a
disposition of Cooper Jal and Langlie Jal would be used to reduce
indebtedness, bring the Company's credit facilities into
compliance, and provide liquidity for capital expenditures on the
Company's remaining properties or potential acquisitions. As the
profits attributable to the assets being marketed represent over
75% of Resaca's total profits, any transaction to sell the
properties would require shareholder approval in accordance with
the AIM Rules. The sale of these properties would require
shareholder approval. The marketing process for our two properties
will begin mid-October 2012 with anticipated final bids to be
submitted on or about the 21st of November. The Company anticipates
a closing on the sale of these properties by 31 December 2012.
Resaca's Management believes Cooper Jal and Langlie Jal are
truly exceptional properties. A large measure of the Company's
cash-flow and borrowings under its credit facilities have been
deployed at the Cooper Jal Unit to modernize the field, improve
water injection, in addition to behind pipe recompletions and the
drilling of new wells. The results have been encouraging relating
not only to daily production but more specifically in the increase
in reservoir pressure needed for both secondary and tertiary CO(2)
recovery. The Company's third party reserve consultants have
estimated a combined 500 million barrels of original oil in place
for the Cooper Jal and Langlie Jal Units. The Company recently
received the preliminary results of on an extensive study on the
three formations within the Cooper Jal Unit performed by
Netherland, Sewell and Associates. The results of this study
affirmed that the Company's original oil in place figures for
Cooper Jal were within the range of most likely estimates. This
additional scrutiny further validates Management's position on the
potential for additional recoverable oil at Cooper Jal and, by
analogy, the potential for recoverable oil at Langlie Jal, which
should provide additional credibility during the sales process.
At the Company's Langlie Jal Unit, which was acquired in August
2011, gross production has increased approximately 40% to 138
barrel of oil equivalents per day primarily through returning idle
wells to production and the optimization of water injection. While
Langlie Jal is at an earlier stage in its waterflood development
process, Management continues to believe this property is analogous
to the Cooper Jal Unit, thus further validating our thesis on the
potential value of the Langlie Jal Unit.
Management will work diligently to keep Resaca's shareholders
informed of its progress during the sales process and welcomes any
questions or comments in the interim. Furthermore, Management
anticipates meeting with shareholders upon signing of definitive
agreements related to the property sales to discuss the future
plans for Resaca, which include a variety of opportunities in the
resource plays in the Permian Basin as well as global opportunities
that have presented to the Company, as well as introduce the newest
member to the Resaca team, Mr. E. Will Gray II, Executive Vice
President and Head of Capital Markets and Business Development. Mr.
Gray has been tasked to assist Management in the creation and
execution of strategies to build future shareholder value in
addition to providing oversight to our asset divestiture
process.
Houston based Albrecht & Associates, Inc. has provided oil
and gas asset and corporate divestment services to the energy
industry for 25 years and has a significant amount of experience
marketing properties with profiles similar to Cooper Jal and
Langlie Jal.
J.P. Bryan, Resaca Chairman and CEO commented
"We have made considerable efforts to pursue alternative
opportunities for Resaca and its shareholders and have concluded
that a sale of the Company's Cooper Jal and Langlie Jal Units is
the best course of action this time. While we believe these
properties posses a substantial amount of upside potential that has
yet to be realized, we believe this is the best strategy currently
available to the Company to reduce corporate debt while continuing
to pursue strategies to increase shareholder value. Resaca's
Management has worked with Albrecht & Associates for 25 years
and we are confident they run an excellent sales effort."
For further information please contact:
Resaca Exploitation, Inc.
J.P. Bryan, Chairman and Chief Executive
Officer +1 713-753-1300
John J. ("Jay") Lendrum, III, Vice Chairman +1 713-753-1400
Dennis Hammond, President and Chief
Operating Officer +1 713-753-1281
Chris Work, Chief Financial Officer +1 713-753-1406
Buchanan (Investor Relations) +44 (0)20 7466 5000
Tim Thompson
Helen Chan
Ben Romney
finnCap Limited (Nomad and Broker) + 44 (0) 20 7220 0500
Matt Goode, Corporate Finance
Christopher Raggett, Corporate Finance
Victoria Bates, Corporate Broking
About Resaca
Resaca is an independent oil and gas development and production
company based in Houston, Texas. Resaca is focused on the
acquisition and exploitation of long-life oil and gas properties,
utilizing a variety of primary, secondary and tertiary recovery
techniques. Resaca's current properties are located in the Permian
Basin of West Texas and Southeast New Mexico. Additional
information is available at www.resacaexploitation.com.
In accordance with the AIM Rules, the information in this
announcement has been reviewed and approved by Dennis Hammond,
President. Mr. Hammond has a Bachelor of Science degree in
Petroleum Engineering, is a registered professional engineer in the
State of Texas, and has over 30 years relevant experience within
the sector.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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