Each one in plain English, with the numbers worked through for a shareholder.
23 Feb 2007business combination● NeutralMajor
GeoResources issued its definitive proxy for a special meeting on March 29, 2007 (record date February 16) to approve the Southern Bay and Chandler mergers. Existing shareholders would own about 26.2% afterward. Southern Bay bought Texas producing working interests for about $7.4 million plus $870,000 drilling costs on February 13, funded by a $5 million capital call, a $3 million bank drawdown and $270,000 of working capital; GeoResources raised Southern Bay's debt ceiling in the merger agreement to $9.1 million. A leonardite sale at about $1 million could allow a dividend of roughly $.06 per share, but a sale is not assured. This updates the earlier preliminary proxy, which had a December 2006 meeting date.
GeoResources furnished a November 29, 2006 press release giving updates on operations and the pending merger with Southern Bay and Chandler. The filing text itself contains no figures or terms; the substance is only in the press release exhibit, which is not reproduced here.
GeoResources filed a preliminary proxy for a December 14, 2006 special meeting to vote on the Southern Bay and Chandler mergers. Former owners of the acquired businesses would hold about 73.8% of the combined company, so current shareholders would be heavily diluted. Votes are also sought on raising authorized stock to 100 million common and 20 million preferred shares and on enlarging the incentive plan to 2,000,000 shares. If the company sells its leonardite assets before closing, half the proceeds could be paid to shareholders as a dividend.
GeoResources agreed on September 14, 2006 to merge with Southern Bay Oil & Gas, L.P. and Chandler Energy, LLC, issuing 8,263,000 shares to Southern Bay's owners and 1,931,000 to Chandler's owners, plus up to 496,000 shares for working interests in a Colorado project. Existing shareholders must approve the share issuance, a larger authorized share count and a bigger employee incentive plan (300,000 to 1,750,000 shares); Frank Lodzinski would become CEO and Jeffrey Vickers would move to VP, Williston Basin. The company expects closing in late 2006 or Q1 2007, with no assurance.
