NGAS Resources Inc

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.

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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.

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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.

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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.

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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.

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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.)

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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.

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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.

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