1 Aug 2008listing compliance notice▲ GoodMajor
the American Stock Exchange certified HILLTOP ENERGY, LLC.'s securities for listing, clearing them to begin trading.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
12 May 2008material agreement● NeutralMajor
On May 6, 2008 the company borrowed $2,000,000 on a subordinated note from Diversified Dynamics, controlled by William Bruggeman (over 5% owner), giving it a 0.375% net profits interest in Louisiana properties once the debt and Wells Fargo are repaid. On May 8 an amendment to the Wells Fargo agreement raised the revolver borrowing base to $20,000,000 until the next review (scheduled September 1, 2008) and bars prepaying the term loan before March 1, 2010. The extra borrowing funds completion of four Johnson Branch wells and two more Bethany Longstreet wells; this raises debt considerably.
5 Mar 2008material agreement● Neutral
On February 29, 2008 the company signed 36-month employment agreements (effective February 1, 2008) with CEO Calvin Wallen III ($200,000 a year) and Secretary Jon Ross ($150,000 a year). If either is terminated without cause or leaves for 'Good Reason', the company must pay the remaining salary for the term. Routine governance item with no new financing or assets.
16 Mar 2007listing compliance notice▼ Bad
HILLTOP ENERGY, LLC. withdrew a registration statement, abandoning the offering it covered.
9 Mar 2007capital raising announcement▲ GoodMajor
On March 5, 2007 the company signed a credit agreement with Wells Fargo Energy Capital: a $20M revolver plus a $5M convertible term loan, at prime plus 2%, maturing March 1, 2010, secured on substantially all assets. About $5M was used to retire the Petro Capital V debt, ending that dispute-ridden loan. Wells Fargo also got 2.5M warrants at $1.00 (five years) and a promised 5% net profits interest in certain Louisiana properties after repayment; the press release says the term loan converts at $1.00 per share and the revolver's initial borrowing base is $4M.
21 Dec 2006capital raising announcement● NeutralMajor
On December 15, 2006 the company sold 7,880,000 new shares for $3,940,000 ($0.50 per share), with warrants for 3,940,000 shares at $0.70 through November 30, 2011. Investors included William Bruggeman (about 23.0% owner beforehand) and director Bob Clements. The press release says proceeds will go to completing the three S.E. Johnson wells, reworking three western wells, more acreage and general purposes; this adds to the share count and is the financing the company had been seeking, so existing holders are diluted.
What it means for a shareholder
3.9m new shares at $0.700 to raise about $3.9m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
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6 Dec 2006debt financing▼ BadMajor
Petro Capital V, the $5.5M senior lender, wrote on December 4, 2006 that the fixes for its September 19 title-default claim (S.E. Johnson 20 #1 and 29 #1 wells) are not enough, and demanded default interest of 17.5% (5 points above the current rate). Management says it was never in default and that any default was cured in time; the lender also claims a default for lacking a third-party June 30, 2006 reserve report on the Texas properties, on which the company has taken no position. This continues the title dispute and puts the senior loan under pressure.
2 Aug 2006capital raising announcement● NeutralMajor
On July 28, 2006 the company raised $2,100,000 from unaffiliated investors for 3,000,000 shares plus warrants for 1,500,000 shares, exercisable at $0.70 through July 31, 2011. The placement agent gets 2% of the proceeds in cash plus 150,000 shares. The press release says proceeds fund its share of the S.E. Johnson 19 No. 1 Cotton Valley well and working capital, and that more capital is still being sought. This adds dilution at $0.70 per share, below the $0.80 paid in December 2005.
13 June 2006listing compliance notice▼ Bad
HILLTOP ENERGY, LLC. withdrew a registration statement, abandoning the offering it covered.
3 Apr 2006material agreement● Neutral
On March 30, 2006 the company and Tauren, owned by CEO Calvin Wallen III, extended the maturity of the $1,300,000 note from the February 2006 acquisition from April 3, 2006 to April 15, 2007. Any new equity or debt raised before maturity must first go toward repaying this note. This gives the company a year more to repay a related party.
9 Mar 2006listing compliance notice▼ Bad
HILLTOP ENERGY, LLC. withdrew a registration statement, abandoning the offering it covered.
9 Feb 2006asset acquisition disposition● NeutralMajor
On February 6, 2006 the company borrowed $5,500,000 from Petro Capital V, L.P. at 12.5% interest, due February 6, 2009, secured by substantially all its assets. About $1.8 million repaid its prior senior debt, and warrants for 1,833,334 and 250,000 shares at $1.00 went to the lender and its affiliate. It also bought Cotton Valley leasehold (about 5,000 net acres in DeSoto and Caddo Parishes, Louisiana) from Tauren, owned by CEO Calvin Wallen III, for $3.5 million cash, 2,500,000 shares, a $1.3 million convertible note at $0.80, and a $2.1 million drilling credit. A special committee excluding Wallen negotiated it and obtained a fairness opinion. This is the Tauren deal flagged in December 2005.
16 Dec 2005capital raising announcement● NeutralMajor
On December 16, 2005 the company sold 2,500,000 shares at $0.80 each (about $2 million) plus five-year warrants for 1,000,000 shares at $1.00. The press release says the money funds its share of two Cotton Valley wells, and that a larger $10-$12 million financing is being pursued, subject to a deal with Tauren (owned by Calvin Wallen III) and several approvals including shareholder approval to raise authorized shares. That larger deal is not yet agreed.
What it means for a shareholder
2.5m new shares at $0.800 to raise about $2.0m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
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14 Jan 2005capital raising announcement● Neutral
On January 11, 2005 the company issued 1,531,661 shares to Caravel Resources Energy Fund 2003-II, L.P. and 468,339 shares to CEO Calvin Wallen III in exchange for working interests in the Kraemer 24-1 well in Desoto Parish. This appears to be the share-based part of the Kraemer well acquisition flagged in the October 2004 financing (an inference from the matching well and Caravel name). It adds 2,000,000 shares to the count.
12 Oct 2004capital raising announcement● NeutralMajor
On October 6, 2004 the company issued $2,585,000 of 7% senior secured convertible debentures due September 30, 2009, convertible at $0.50 per share, with warrants for 2,585,000 shares at $1.00. Proceeds are for a 25% interest in the Kraemer 24 #1 well in the Bethany-Longstreet play in northern Louisiana and for drilling two more wells. For shareholders this adds secured debt and potential dilution from conversion and the warrants. The attached press release gives the amount as $2.575 million, which differs from the filing's $2,585,000.
17 July 2001asset acquisition disposition● Neutral
This amendment to the April 2001 acquisition report adds the promised financial statements. It also discloses that C. K. Cooper & Company and/or its principals and employees received 111,413 more shares for services on the exchange offer, taking shares outstanding to about 29,989,616. The combined unaudited figures show total assets of $6,705,494 at March 31, 2001, and net income of $200,466 for the period then ended.
14 May 2001asset acquisition disposition● NeutralMajor
The company (filing under the name Cubic Energy, Inc.) completed an exchange offer on April 27, 2001, acquiring 15%-45% working interests in 14 wells plus all units in four LLCs and about 9.85% of a fifth, in Texas and Louisiana. The LLCs hold interests in about 5 producing properties with proved reserves of about 3.984 Bcfe. It paid with about 11,141,256 new shares, valued at $0.50 each for the offer, bringing shares outstanding to about 29,878,203. The wells are operated by Tauren and Fossil, both owned by director and officer Calvin Wallen III, a related-party link the filing says disinterested directors approved. Financial statements were promised by later amendment.