Each one in plain English, with the numbers worked through for a shareholder.
7 Jan 2008asset acquisition disposition● NeutralMajor
On Dec 31, 2007 Isramco sold its Israeli operations and assets (including Negev 2 and Dead Sea partnership units, employees and Israeli land) to related party IOC for about $13.6 million, keeping its offshore Israel working interests. Proceeds repaid in full the IOC loan (about $12.9 million) from the Five States purchase and part of the accrued interest on the Naphtha loan. The company initially said it expected a roughly $5 million pre-tax loss on the sale (corrected in the next amendment).
8 Mar 2007asset acquisition disposition● NeutralMajor
Isramco closed the Five States purchase on March 2, 2007 for $92 million, getting about 650 wells in Texas and New Mexico. It paid $7.7 million from working capital and borrowed the rest: $42 million from Naphtha (its related-party parent group, via IOC) in three loans of $18.5M, $10.5M and $12M due 2014, 2014 and 2012 respectively by the stated terms (7-, 7- and 5-year loans), a $7 million 3-month loan from related party JOEL, and a $35.3 million Wells Fargo credit line due March 2011 at LIBOR+2% with financial covenants. This completes the deal and moves a very small company onto heavy debt, much of it owed to entities linked to CEO Tsuff.
Isramco and Five States signed a new agreement on Feb 20, 2007 to buy Texas and New Mexico oil and gas properties for about $92 million, replacing the $100 million deal Isramco terminated in January. Isramco paid a new $5 million deposit; with the earlier $3 million, $8 million is applied to the price and Five States keeps it as its sole remedy if the deal fails for reasons related to Isramco. Both sides release claims over the old agreement and Isramco drops its arbitration request, resolving the deposit dispute. Closing is scheduled for March 2-12, 2007. Isramco expects to pay up to $7 million from working capital and the rest from loans: a $17 million loan from related party IOC already obtained (LIBOR+5.5%, capped at 11%, due Dec 2013, secured on specified properties), plus agreements-in-principle for a $36 million secured bank loan and $32 million of unsecured related-party loans, none yet final. CEO Haim Tsuff controls IOC and president Jackob Maimon is an IOC director.
25 Jan 2007material agreement termination▼ BadMajor
Isramco terminated the $100 million Five States purchase on January 20, 2007, citing unmet closing conditions (title defects and not being named operator on some properties). Five States rejects this and refuses to return the $3 million deposit, and Isramco says it will take legal action, so the deal collapsed and the deposit is now in dispute.
Isramco sold all shares of its cruise liner subsidiary Magic I Cruise Line to Chesny Estates, the ship's earlier lessee, for about $2.7 million on December 31, 2006. The company says it is exiting to focus mainly on oil and gas, tied to the pending $100 million Five States purchase, ending the cruise venture begun in March 2004.
Isramco agreed on November 15, 2006 to buy oil and gas properties in Texas and New Mexico from Five States Energy for $100 million, including about 660 producing wells, and paid a $3 million deposit. It expects to fund up to 15% from working capital and has no financing commitment yet for the rest, and closing depends on conditions with a January 20, 2007 deadline, so it is a large, uncertain deal relative to the company's size.
Isramco reported 2005 results: revenue of $7,735,000 and a net loss of $1,132,000, versus net income of $993,000 for 2004 (as restated in this release). The company cited higher costs on its US wells, larger losses running the Magic 1 cruise vessel, higher oil and gas impairments, and lower income from affiliates. This is an earnings release, not a transaction.
Isramco settled its February 2004 Los Angeles lawsuit over a joint real estate purchase, receiving $2,500,000 from certain defendants as reimbursement of its costs, with no admission of fault and mutual releases. It expects a net gain of about $2,000,000 in the first quarter of 2006, resolving the dispute.
Isramco reported third-quarter 2005 results: revenue of $3,301,000 and net income of $992,000, versus a $595,000 loss a year earlier. The improvement came mainly from gains at affiliates traded on the Tel Aviv exchange, with cruise liner leasing adding $736,000. This is an earnings release, not a transaction.
Isramco reported second-quarter 2005 results: revenue of $1,621,000 and a net loss of $496,000 per the text (the table shows $596,000, an inconsistency in the release). Cruise liner leasing brought in $568,000, while gas sales volume fell and the ship's costs weighed on results. This is an earnings release, not a transaction.
Isramco reported 2004 results: revenue of $8,943,000 and a net loss of $20,000, versus net income of $2,256,000 in 2003. Revenue included $2,034,000 of leasing income from the Mirage 1 cruise liner, while oil and gas sales fell to $3,173,000 from $3,439,000. The filing only reports earnings, no new transaction.
This continues the cruise liner story: a Isramco subsidiary leased the Mirage 1 (bought in March 2004) to Chesny Estates from April 14 to October 31, 2005 at $8,000 a day, with Chesny bearing operating costs. Isramco also gave Egged's subsidiary a guarantee of up to $1 million against Chesny's breach of a marketing agreement, backed by a $600,000 bank guarantee and a security interest from Chesny, so Isramco carries some risk if Chesny fails.
Isramco's auditor UHY - Mann Frankfort Stein & Lipp resigned on January 20, 2005 and the audit committee appointed Malone & Bailey, PC to audit the 2004 accounts. The filing states there were no disagreements and no adverse or qualified opinions for 2002 and 2003.
22 Mar 2004asset acquisition disposition● NeutralMajor
Isramco won a bankruptcy-court auction on March 19, 2004 to buy a 270-cabin luxury cruise liner for $8,050,000, a purchase well outside oil and gas. It plans to pay from working capital plus a roughly $5 million five-year Bank Leumi loan (only a non-binding agreement-in-principle so far), plus about $750,000 for dry-docking, and is seeking a cruise operator to lease the ship.
