Each one in plain English, with the numbers worked through for a shareholder.
31 Aug 2015bankruptcy or receivership▼ BadMajor
On August 28, 2015 Armada and its subsidiaries ceased operations and filed for Chapter 7 bankruptcy in the Eastern District of Texas, Sherman Division. A trustee will take control and liquidate the assets. The filing defaulted the Prosperity Bank term note, with about $3,486,664 now due, and the CFO and COO have left. The filing does not state what shareholders will receive; that Chapter 7 liquidation could leave equity with little or nothing is an inference, not stated.
On March 5, 2015 Armada and Prosperity Bank converted the matured credit line into a $3,472,693 term loan with no further advances. Interest is paid monthly, principal of $50,000 a month starts October 5, 2015, and everything is due March 5, 2016. The rate is prime plus 1% with a 5.75% floor, secured by the Kansas leases. The bank removed the financial covenants and waived earlier violations, which resolves the default thread; Armada paid an $8,681.73 fee.
17 Dec 2014material agreement termination▼ BadMajor
Armada ended the $16,350,000 Tabbs Bay purchase on December 11, 2014, citing the sharp fall in oil prices, the high operating cost of the properties, and WTI closing below $76.74; the $100,000 deposit is to be returned. The year-end release says the related financing also fell away, Bear Creek #1 remains uncompleted, and Armada is seeking a working-interest sale or joint venture for it. It is also seeking a lender extension and says it received an offer for all or part of the Kansas property at or above the payoff. It plans to cut expenses. This resolves the Tabbs Bay thread.
Armada sold its remaining 27.124% of TNR Holdings to Gulfstar on November 26, 2014 for $5,012,473, so it no longer has any interest in the South Louisiana fields. This completes the exit from the Louisiana assets that came from the Mesa deal. The bank credit facility matured November 22, 2014 and Armada failed to repay it; $4,600,000 of principal was paid from the sale proceeds, leaving $3,472,693 owed, secured by the Kansas leases. Armada is working to refinance, with no assurance it will succeed, and says the bank could enforce its rights if not.
On October 16, 2014 Armada agreed to buy eight leases (about 576 acres, Harris County, Texas, about 190 net barrels a day) from Tabbs Bay Energy for $16,350,000 cash, with the price adjusted by the WTI oil price at closing. It paid a $100,000 non-refundable deposit, and closing was due by November 14, 2014 (extendable to December 12 with another $100,000). Funding was to come from a new bank facility and equity or debt sales, but no firm commitment existed, and without financing Armada would forfeit the deposit.
Armada says it breached a general-and-administrative-expense-to-revenue covenant on its Prosperity Bank (formerly F&M) credit facility for the quarters ended March 31 and June 30, 2014 (140.89% against a 27% limit), which is an event of default. About $8,111,375 was outstanding at June 30, 2014, the bank could demand immediate repayment, and Armada has asked for a waiver but has no answer yet. Armada attributes the breach to the Gulfstar asset reallocation and the move to midcontinent and Rocky Mountain operations.
A press release says Armada began drilling the Bear Creek #1 well in Carbon County, Wyoming (100% working interest, target depth about 8,457 feet, roughly 15 days of drilling expected). Starting the well means it met its drilling obligation under the Anadarko farmout and keeps the rest of the farmout acreage, resolving that open thread. The release also says Armada sold its remaining Oklahoma acreage to focus on Kansas and Wyoming; no price or buyer is given.
On April 10, 2014 Armada closed Gulfstar's second purchase (Tranche B, $6,700,053 for 25.925% of TNR Holdings), taking Gulfstar to 60.3% and control, so Armada will stop consolidating TNR Holdings and will account for its stake under the equity method. Armada also closed the Kansas purchase from Piqua Petro (six leases, about 1,040 acres, Woodson County), paying the $6,400,000 balance after the $100,000 deposit, subject to an operating-cost adjustment; current production is about 80 barrels a day. The F&M/Prosperity loan was amended: $4,603,125 of letters of credit moved off Armada's borrowings, the borrowing base was reset to $8,200,000, and the Kansas leases were pledged to the bank. This resolves the pending Tranche B and Piqua threads.
On March 14, 2014 Armada agreed to buy six oil and gas leases from Piqua Petro covering about 1,040 acres in Woodson County, Kansas, producing about 80 barrels a day, for $6,500,000 in cash. It paid a $100,000 non-refundable deposit, targets closing by April 3, 2014, and the deal is subject to due diligence conditions. Armada plans to pay by drawing the Tranche B Gulfstar funding ($6,700,053), which would raise Gulfstar's stake in TNR Holdings to 60.3%. This continues the Gulfstar thread and adds Kansas as a new area.
On December 20, 2013 Armada agreed with Gulfstar Resources to sell interests in a new subsidiary, TNR Holdings, which holds the Louisiana oil properties that came from Mesa. Gulfstar bought a 34.375% stake for $6,250,000 and is obliged to buy another 25.925% for $6,700,053 within 90 days of the first closing. It has an option on a further 9.7% for $4,549,968, which would bring it to 70% if all are funded. Gulfstar gets 8% cumulative priority on distributions, approval rights over major decisions, and royalty interests in future Wyoming and Oklahoma wells drilled with the proceeds. Armada agrees to keep F&M Bank borrowings under $8,222,693 and letters of credit under $4,603,125. This is new funding but gives up part of the ownership of the Louisiana assets.
On October 31, 2013 Armada and Anadarko signed a third amendment to the Wyoming farm-out contract, moving the deadline to start the first test well from December 31, 2013 to July 31, 2014. Armada then has 180 days after reaching contract depth in that well to start a second one. Armada says a location has been tentatively selected and the extra time allows more careful evaluation. This extends the earlier deadline of August 1, 2013 noted for the test well, and the drilling is now later than first set.
On April 26, 2013 Armada agreed with buyers of 700,002 of the 800,002 units sold in its November 2012 private placement at $0.90 per unit to give them 559,998 extra units at no added cost. Their Series D warrants now expire March 1, 2018 and the exercise price drops from $1.25 to $0.75 from May 26, 2013. In return those buyers release Armada from past claims over the purchase. Armada expects similar deals with the remaining buyers but says that is not assured. This dilutes other shareholders, and the release suggests (inference) a concern about possible claims, though the filing does not say why.
On April 19, 2013 the board granted stock options at $0.40 to non-employee directors (50,000 each, plus 10,000 for Wold as Audit chair and 5,000 each for Hern and Zaziski as committee chairs) and 500,000 fully vested options each to Griffin and Cerna. Two-year employment agreements, retroactive to April 1, 2013, set salaries at $210,000 for Griffin (CEO) and $144,000 for Cerna (President); Cerna's replaces his earlier agreement. Directors will also get $750 a month in cash. The options add to the share count if exercised, which is an inference.
The Mesa acquisition closed on March 28, 2013: Armada bought 100% of Mesa Energy, Inc., which holds substantially all of Mesa's assets, and Mesa will distribute 0.40 Armada share per Mesa share to its holders before dissolving. After the distribution, former Mesa and Armada holders will own about 62.4% and 37.6% of Armada. Three old directors (Bhogal, Matthews, Moss) resigned and Griffin, Unruh, Schlumberger and Zaziski joined the board. The F&M Bank & Trust lender consented and released Mesa as guarantor of Mesa Energy, Inc.'s loan, with Armada giving a replacement guaranty. This resolves the pending-deal thread from the S-4 filings. The S-4 was declared effective March 15, 2013.
Pre-Effective Amendment #4 to the Mesa-deal S-4 was filed solely to update the exhibit list in Part II (Item 21). The explanatory note says no other changes were made to the prospectus or Part II. It lists the November 14, 2012 agreement and the February 19, 2013 Amendment No. 1 among the exhibits. The registration still covers 33,732,191 shares and is not yet shown as effective.
On March 5, 2013 Armada signed a third amendment to its Wyoming Purchase and Option Agreement with TR Energy, changing the payment schedule so the first installment is due on or before April 15, 2013. All other terms are stated as unchanged. This continues the 320-acre option payments, whose first installment ($250,000) had been due February 28, 2013; the filing does not give the amount of the installment or say whether later due dates moved, and does not explain the reason.
Armada filed Pre-Effective Amendment #3 to the Mesa-deal S-4. The visible text repeats the same terms (0.40 ratio, 33,732,191 shares, 62.4%/37.6% split, majority written consent of Mesa holders) and still has blank mailing dates. It refers to the agreement 'as amended', matching the February 19 amendment. The filing is truncated and the text shown does not say what else changed. The deal remains pending.
On February 19, 2013 Armada, Mesa and Mesa Energy, Inc. signed Amendment No. 1 to the November 2012 acquisition agreement. It pushes the deadline for Mesa holder consent from February 18 to April 20, 2013 and the closing deadline from February 28 to April 30, 2013. It also revises the planned post-closing leadership: board of Griffin (Chairman), Cerna, Eric Wold, Unruh, Hern, Zaziski and Marceau Schlumberger; management of Griffin as CEO, Cerna as President, David Freeman as COO and Rachel Dillard as CFO. Freeman was earlier listed as EVP Gulf Coast and Unruh as COO. The filing does not state why the dates were extended (that the deal had not closed by the original dates is an inference).
Armada filed Pre-Effective Amendment #2 to the Mesa-deal S-4. The visible text repeats the terms already known: 0.40 Armada share per Mesa share, up to 33,732,191 shares, about 62.4% Mesa and 37.6% Armada holders afterwards, and Mesa holder consent by majority (insiders with voting agreements hold about 37%). The mailing date is still blank and the registration is not yet effective, so the deal is still pending. The text shown does not say what changed from the prior version (the filing is truncated).
On January 10, 2013 Armada amended its Wyoming purchase and option agreement with TR Energy for the second time, acknowledging it has exercised an option to pay $736,000 for an additional 320 acres. Payment is split into $250,000 by February 28, 2013, $243,000 by April 30, 2013 and $243,000 by May 1, 2013. This is a new cash commitment tied to the Overland Trail project, and the filing does not say how it will be funded.
This amendment to the Mesa-deal S-4 was filed only to add exhibits and XBRL data to Part II. The explanatory note says nothing else changed. The registration still covers the same 33,732,191 shares.
Armada furnished an investor presentation on the proposed Mesa combination, with the usual notices. The text shown does not add new terms: it restates the 0.40 ratio, the November 14 agreement, the S-4 filed November 29 (not yet effective) and the closing conditions. Armada is not asking its own shareholders for approval.
Armada filed the S-4 registration statement to register up to 33,732,191 shares to be issued to Mesa holders in the Mesa acquisition; it also serves as Mesa's consent solicitation. It repeats the 0.40 ratio and about 62.4% Mesa / 37.6% Armada ownership after closing. The filing is not yet effective, and the document is still a draft with blanks, such as the mailing date. This is the registration step flagged as open in the context.
On November 14, 2012 Armada signed a binding asset purchase agreement with Mesa Energy Holdings and its subsidiary Mesa Energy, Inc. (MEI), turning the October non-binding letter of intent into a definitive deal. Armada would buy all of MEI (substantially all of Mesa's assets) for 0.40 Armada share per Mesa share (about 34 million shares, fixed ratio); Mesa would then dissolve, and Mesa holders would own about 62% and current Armada holders about 38%, versus the 57%/43% in the LOI. Armada shareholders do not vote on it. Closing needs Mesa holder consent (majority), an effective S-4 and other conditions. Armada would be based in Dallas, with Mesa's Griffin as CEO and Cerna as President.
On November 2, 2012 (effective October 22) Armada Oil signed a Seismic and Farmout Option Contract with Anadarko, giving it a permit until May 1, 2013 to run a 3D survey on Anadarko-owned land. The company committed to drill a test well on that acreage by August 1, 2013 and to give Anadarko the survey data. If it drills and completes a producing test well, it earns a three-year lease on the drillsite section with a 20% royalty. The contract ends automatically if the survey is not finished by May 1, 2013.
On October 3, 2012 Armada Oil announced a non-binding letter of intent to combine with Mesa Energy Holdings, Inc., issuing 0.325 Armada shares per Mesa share (stated as about a 134% premium to Mesa's $0.168 close). Mesa holders would own about 57% and current Armada holders about 43%. The combined company would keep the Armada Oil name, be based in Dallas and be run by Mesa's Randy Griffin as CEO, with James Cerna Jr. as President. A reverse split to support a national exchange listing is contemplated. Closing needs due diligence, definitive agreements and approvals, the aim is year-end, and the company itself cautions that expectations of completion are speculative. For existing holders, this would mean dilution to a minority stake if completed.
This amendment adds unaudited pro forma figures for the March 30, 2012 Armada Oil and Gas purchase. It values the consideration at $24,387,356: 8,870,000 shares at the $1.80 closing price ($15,966,000), Series B warrants at $4,125,716 and Series C warrants at $4,295,640. Of that, $24,020,538 is assigned to the Wyoming property, plus $378,436 cash less $11,618 payables. The property value rests on a valuation firm's range of $19.26 million to $27.67 million, far above the $900,000 the seller was paid for the leasehold, so this is a large accounting value, not cash spent. The filing also repeats the 43.7% ownership by the Armada holders and notes the 10-K was filed June 27, 2012.
Effective July 2, 2012, Armada Oil signed an agreement with Geokinetics USA, Inc. to run a 3-D seismic survey over about 41.05 square miles (26,272 acres) of its Carbon County, Wyoming acreage. This moves the Overland Trail project from older 2D data toward new survey work. The filing does not state the survey's cost, and parts of the supplement are redacted.
15 June 2012asset acquisition disposition● Neutral
This amendment adds the audited accounts of the private company bought on March 30, 2012 (now called Armada Oil and Gas, Inc.; NDB Energy has taken the name Armada Oil, Inc.). For the period from January 19, 2012 (inception) to March 29, 2012 it shows a net loss of $24,985, cash of $378,436, a $900,000 Wyoming leasehold (bought from TR Energy) and equity of $1,266,818. The auditor (MaloneBailey) included a going-concern warning because cash is inadequate for expected expenses. The notes say a vertical test well must be drilled by August 1, 2012 and the option on the remaining 23,700 acres runs to March 31, 2013.
The Armada deal closed on March 30, 2012, on the terms announced on March 27. Armada is now a wholly owned subsidiary, and its former holders own about 43.7% of NDB. Armada's Wyoming project covers 25,000+ acres, of which it has acquired 1,280 acres plus data and 2D seismic, with an option on 23,700+ more acres. David Moss, Armada's founder and President since January 2012, joined the board. Director Derek Cooper, who led the company from 2005, resigned as a director with no stated disagreement. Existing shareholders are diluted to a minority position.
