25 Apr 2011listing compliance notice▼ BadMajor
NGAS Resources Inc deregistered its securities, ending its obligation to file reports with the SEC.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
14 Apr 2011business combination● NeutralMajor
On April 13, 2011, the Magnum Hunter arrangement closed and NGAS became a wholly owned subsidiary of Magnum Hunter. Each NGAS share was converted into the right to receive 0.0846 Magnum Hunter share, and former shareholders kept no shareholder rights other than that payment. Magnum Hunter paid off the KeyBank credit agreement and the 2012 convertible notes, and about $6.8 million of Seminole note installments were cancelled. Nasdaq filed to delist the shares and NGAS said it will file to deregister them. All the old directors and executive officers resigned and Magnum Hunter's designees replaced them, including Gary C. Evans as CEO. Severance was paid to Daugherty, Barr, Wallen and Windisch in Magnum Hunter stock: $1,282,736, $1,015,385, $1,041,750 and $803,700. This resolves the pending acquisition, the debt deadlines and the Nasdaq bid-price problem.
13 Apr 2011listing compliance notice● NeutralMajor
NGAS Resources Inc's exchange filed to remove a class of its securities from listing.
11 Apr 2011business combination● NeutralMajor
At the April 8, 2011 special meeting, NGAS shareholders approved the Magnum Hunter arrangement, with 30,509,330 votes for and 1,886,111 against, above the two-thirds needed. The fixed ratio of 0.0846 Magnum Hunter share per NGAS share would mean roughly 6.6 million Magnum Hunter shares issued to NGAS holders. A final British Columbia Supreme Court order is still needed, so the deal has not yet closed. This is the shareholder vote that earlier filings said was required.
31 Mar 2011listing compliance notice● Neutral
On March 29, 2011, Nasdaq approved moving NGAS stock from the Nasdaq Global Select Market to the Nasdaq Capital Market and gave it until September 26, 2011 to regain the $1.00 minimum bid price. Trading on the Capital Market began March 31, 2011. This continues the bid-price deficiency flagged in September 2010 and keeps the listing alive while the Magnum Hunter deal is pending.
16 Mar 2011business combination● NeutralMajor
On March 10, 2011, NGAS, Magnum Hunter and Seminole signed an Omnibus Agreement that settles the Seminole gas gathering restructuring, a closing condition of the Magnum Hunter deal. It takes effect only if the deal closes. NGAS Production would get lower gathering fees and a higher monthly operating fee; Magnum Hunter would pay Seminole $10.275 million in cash or restricted stock at its choice; NGAS Production and Magnum Hunter would commit at least $20 million of drilling a year in 2011 and 2012; and about $6.8 million of Seminole's promissory note installments to NGAS would be cancelled. The agreement ends if the deal is terminated or does not close by April 30, 2011. This resolves the Seminole restructuring thread in the pending deal.
9 Mar 2011business combination● NeutralMajor
NGAS filed its final proxy statement for the Magnum Hunter deal. The special shareholder meeting is set for April 8, 2011 in Vancouver, for holders of record on March 8, 2011, and approval needs two-thirds of the votes cast plus British Columbia court approval. Each NGAS share would convert into 0.0846 Magnum Hunter share, and the filing says NGAS holders would own about 6.7% of Magnum Hunter afterward, assuming the maximum conversion of convertible notes into NGAS shares. This continues the pending deal and fills in the dates and ownership percentage left blank in the January draft; the board recommends a yes vote and the vote has not yet happened.
8 Mar 2011material agreement● Neutral
On March 7, 2011, the KeyBank lenders extended the forbearance deadline to April 15, 2011, the extension the Magnum Hunter agreement had sought. It is conditional on NGAS starting to mail proxy materials for the Magnum Hunter vote by March 15 and getting shareholder approval by April 12, 2011. This continues the pending acquisition and keeps the lenders from acting on the covenant default while the deal proceeds.
31 Jan 2011business combination● NeutralMajor
NGAS filed a preliminary proxy statement for a special shareholder meeting, planned for March 2011 in Vancouver, to vote on the Magnum Hunter arrangement. Holders of record on February 4, 2011 may vote. Approval needs two-thirds of votes cast, plus British Columbia court approval; the board recommends voting for it. Each share would convert into 0.0846 of a Magnum Hunter share, and registered holders get dissent rights to be paid fair value. The filing's fee calculation uses 78,416,385 NGAS shares (up from 33.5M in January 2010, though the cause is not stated here) at $0.575, a deal value of about $45.1 million. Dates and the expected post-deal ownership percentage are left blank in this draft. This continues the pending deal; the vote has not happened.
28 Jan 2011business combination● Neutral
On January 24, 2011, NGAS and its executive officers signed a second amendment cutting change-of-control severance to fit an overall $5 million limit on severance, change of control and retention benefits under the Magnum Hunter deal (including $685,000 for non-executive employees). For example, Mr. Daugherty's potential payout falls from $1,900,000 to $1,371,800 and Mr. Windisch's from $1,187,500 to $803,700. Payment may be in Magnum Hunter stock or cash at Magnum Hunter's choice. This continues the pending acquisition and carries out the severance reduction that was a closing condition.
13 Jan 2011listing compliance notice▼ Bad
NGAS Resources Inc withdrew a registration statement, abandoning the offering it covered.
27 Dec 2010business combination● NeutralMajor
On December 23, 2010, NGAS agreed to be acquired by Magnum Hunter Resources in an all-stock deal: each NGAS share would get 0.0846 of a Magnum Hunter share, valued at $0.55 per share (a 41% premium to the December 23 close) at a $6.50 Magnum Hunter price, with the ratio fixed. This is the qualifying transaction that KeyBank and the note holders required, and it answers the strategic-alternatives search. Closing needs Canadian court approval, a two-thirds shareholder vote, Magnum Hunter paying off the unconverted 6% notes and all credit-facility debt, a restructured gas transportation agreement with Seminole Energy Services, and reduced executive severance paid in Magnum Hunter stock. NGAS cannot solicit other offers and owes a $4 million termination fee in specified circumstances (including a board recommendation change), or expense reimbursement up to $4 million if shareholders vote it down. Certain shareholders signed support agreements to vote in favour. The lender deadline is March 31, 2011, which NGAS will try to extend to April 15. The deal is not yet completed, so shareholders' position is unresolved.
16 Dec 2010material agreement● Neutral
Effective December 14, 2010, the KeyBank lenders moved the deadline for signing a definitive agreement to retire or replace the credit facility from December 15 to December 23, 2010. The repayment deadline of March 31, 2011 is unchanged in this filing. The extension also applies automatically under the December 14 note agreements with the convertible note holders. This is a short reprieve on the condition set in the November waiver.
15 Dec 2010debt financing● NeutralMajor
On December 14, 2010, NGAS signed agreements with all holders of its 2012 convertible notes to deal with the cross default (triggered by the KeyBank covenant breach) that followed the November default notice. After redemption and rescission notices, holders had asked for 3,231,575 shares on conversion of $1,197,000 of notes at an average reset price of $0.37. Conversions are now capped at 32 million shares in total, and holders will disregard stock prices below $0.37 when setting the reset price. This is conditional on NGAS meeting the KeyBank deadlines (possibly extended to Dec 31, 2010 and April 15, 2011). A qualifying deal must pay at least 10% above the reset price and repay all remaining notes in full at 125% of principal plus 12% interest and charges. This continues the note default thread: it caps dilution, but a buyer must pay the notes at the default premium. The filing also says holders of $7.5M principal gave a redemption notice on December 10.
19 Nov 2010debt financing▼ BadMajor
On November 19, 2010, NGAS signed a Limited Waiver and Fifth Amendment with KeyBank, waiving its September 30 leverage covenant breach. Lenders cut commitments to the $35.8 million outstanding, now due March 31, 2011, and the interest rate rose to 4.25% over prime. NGAS must sign a definitive agreement for a qualifying transaction (a sale, merger or other deal to retire or replace the facility) by December 15, 2010. Separately, on November 15 the holder of $15.3 million of the roughly $21.5 million of 2012 convertible notes served a default notice, which allows cash redemption at 125% of principal. NGAS says it lacks cash for the roughly $14.5 million called and cannot assure the negotiations will succeed.
30 Sept 2010listing compliance notice▼ BadMajor
On September 27, 2010, Nasdaq told NGAS its stock was below the $1.00 minimum bid price. The filing says this has no effect on listing or trading for now. Holders of the amortizing convertible notes waived the share-payment restriction through November 2010, and further waivers would be needed if the deficiency is not cured.
12 May 2010material agreement▼ BadMajor
On May 11, 2010, NGAS agreed with Lazard Capital Markets and Wunderlich Securities to sell 3,960,000 units at $1.31, for about $5.2 million gross ($4.7 million net). Each unit is one share plus a warrant for 0.4 share at $1.61, exercisable for four and a half years. This is another equity raise at a lower price than the August 2009 one ($1.90), diluting existing holders.
15 Jan 2010capital raising announcement● NeutralMajor
The note exchange closed: on January 12, 2010 NGAS issued $28.7 million of new 6% notes due May 1, 2012, extinguishing the old $37 million notes, and paid about $2.7 million cash. It also issued warrants for 1,285,038 shares and, on January 15, 3,037,151 new shares, bringing shares outstanding to 33,521,512. This resolves the exchange agreed on January 11.
12 Jan 2010capital raising announcement● NeutralMajor
On January 11, 2010, NGAS agreed to swap the $37 million 6% convertible notes (due December 2010) for $28.7 million of new 6% amortizing notes due May 1, 2012, plus 3,037,151 shares, warrants for 1,285,038 shares at $2.37, and about $2.7 million cash. The new notes convert at $2.18 per share and require 24 monthly payments from June 2010, which NGAS may pay in shares. KeyBank agreed a Fourth Amendment, taking the borrowing base from $55 million with monthly $1 million cuts from February 2010 and limiting cash passed up from the operating subsidiary. This extends the debt maturity but increases dilution risk; the filing says the share issuance above 19.99% needs shareholder approval at the next annual meeting.
31 Dec 2009financial restatement▼ BadMajor
On December 31, 2009, NGAS said its unaudited 2009 quarterly results should not be relied on, because it is restating how it accounts for the 6% convertible notes after SEC staff review comments. The restatement is non-cash: it adds about $2.9 million of interest expense, raising the nine-month 2009 net loss to about $4.5 million ($0.16 per share), and the conversion price on the notes had already fallen from $14.34 to $11.16 after the 2007 and 2009 share sales.
11 Aug 2009material agreement▼ BadMajor
On August 10, 2009, NGAS replaced the August 5 BMO deal with a smaller one: 3.48 million units at $1.90, for about $6.6 million before fees, on the same warrant terms. The earlier 5.4 million-unit deal was not completed. The filing says the resizing was done to ensure compliance with Nasdaq listing standards; it gives no further reason.
7 Aug 2009material agreement▼ BadMajor
On August 5, 2009, NGAS agreed with BMO Capital Markets to sell 5.4 million units at $1.90 each, for about $10.3 million before fees. Each unit is one share plus a warrant for half a share at $2.35, exercisable for four years starting six months after issue. This is new equity raised at a much lower price than the $6.00 of the November 2007 offering, so existing shareholders are diluted. (The next filing shows this deal was not completed.)
17 July 2009asset acquisition disposition● NeutralMajor
On July 15, 2009, NGAS completed the sale of a 50% interest in its Appalachian gas gathering system to Seminole Gas for $28 million and used the proceeds to cut its revolving credit borrowings to $52 million. This closes the sale agreed in May and approved by KeyBank in June. Seminole's parent, Seminole Energy Services, holds a six-month option to buy the other 50% for $22 million ($7.5 million cash, $14.5 million over 30 months at 8%), and NGAS keeps 30,000 Mcf/day of firm capacity for 15 years and will keep operating the system under a five-year contract. It also added fixed-price gas sales at $5.94 per MMBtu (plus regional basis adjustments) for one year from April 2010.
5 June 2009material agreement▼ BadMajor
On June 2, 2009, NGAS amended its KeyBank credit agreement to allow the sale of a 50% interest in its Appalachian gas gathering system to Seminole Gas under a May 11, 2009 agreement. The $28 million proceeds go to debt: the borrowing base falls from $80 million to $65 million (a further $10 million cut when the gathering assets are released from collateral), the maximum rate rises to 1.75% over prime, and a covenant is waived to September 30, 2009. Borrowings of $80 million fall to $52 million, leaving $3 million of availability; Seminole's parent has a six-month option to buy the other 50% for $22 million, of which $7.5 million is paid in cash. This partly reverses the gathering assets bought from Duke in 2006 and adds to the KeyBank facility from 2006.
27 May 2008listing compliance notice▼ Bad
On May 21, 2008, Nasdaq told NGAS it was out of compliance with the audit committee rule requiring three independent directors, because director Charles Cotterell died on September 30, 2007 leaving a vacancy. It has until the earlier of September 30, 2008 or the next annual meeting to fix this, and the board expects to appoint an independent director before the June 2008 shareholder meeting; the filing does not describe any threat to trading beyond this.
20 Nov 2007material agreement● NeutralMajor
On November 19, 2007, NGAS agreed with BMO Capital Markets to sell 4.2 million common shares for gross proceeds of $25.2 million, issued under its existing shelf registration. This adds new shares, diluting existing holders; the filing does not say how the money will be used.
11 Sept 2006material agreement▲ GoodMajor
On September 8, 2006, NGAS and Daugherty Petroleum signed a new five-year senior secured revolving credit agreement with KeyBank, replacing the prior facility (borrowing base $35 million, due July 31, 2007). It allows up to $125 million in total with a current borrowing base of $50 million, and $35 million was outstanding at signing; it is secured by the producing wells and field-wide gathering systems and guaranteed by NGAS.
5 Apr 2006auditor change● Neutral
On April 5, 2006, the audit committee approved switching the parent company to U.S. accounting standards and hiring Hall Kistler (already auditor of the U.S. operating subsidiaries since 1998) in place of Kraft Berger, auditor since 1992, for the 2006 audit, subject to shareholder ratification at the next annual meeting. The filing says there were no disagreements with Kraft Berger and its opinions were unqualified; the stated reason is removing separate accounting and auditors at the two levels.
20 Jan 2006material agreement▲ GoodMajor
On January 17, 2006, NGAS Gathering, a subsidiary, agreed to buy from Duke Energy Gas Services a 116-mile gas gathering system in southeastern Kentucky and southwestern Virginia for $18 million. Closing depends on customary conditions including Federal Energy Regulatory Commission approval of a related notice filing, and funding is expected to come from part of the December 2005 convertible note proceeds.
14 Dec 2005capital raising announcement● NeutralMajor
NGAS agreed on December 13, 2005 and issued on December 14 $37 million of 6% convertible notes due December 15, 2010 to institutional investors, convertible at $14.34 per share, plus warrants for up to 945,809 shares at $13.04. Terms include price-adjustment protection for investors if shares are later sold cheaper, repayment at 125% on default and at least 110% on a change of control, and a promise to seek shareholder approval at the next annual meeting; this is much larger than the $6.1 million note of October 2004 and could dilute existing holders if converted.