Each one in plain English, with the numbers worked through for a shareholder.
14 Oct 2020asset acquisition disposition▲ GoodMajor
On October 8, 2020 the company completed the Red Stone Resources acquisitions in Grady County, Oklahoma and Harrison, Nacogdoches and Panola Counties, Texas, signed August 24. After adjustments the price was about $5.5 million in cash plus 153,375 shares, and the company is entitled to production cash flow from June 1, 2020. This resolves the pending deal; the filing says it is undetermined whether there will be later secondary closings, and the company says its net mineral acreage is now about 253,000 (from 258,000 in earlier releases).
The company priced the underwritten stock offering announced alongside the Red Stone deal: 5,000,000 shares at $1.63 each, with Stifel as underwriter. On August 31 the underwriters bought the extra 750,000 shares in full, bringing estimated net proceeds to about $8.32 million. The money is meant to fund the cash portion of the Red Stone purchases, related fees and general corporate purposes, and the offering is not conditional on those purchases closing. For shareholders, this resolves the funding question from the Red Stone deal but means new shares were issued.
On August 24, 2020 the company agreed to buy mineral and royalty assets from Red Stone Resources, LLC: Grady County, Oklahoma for $2.4 million and East Texas (Harrison, Nacogdoches, Panola) for about $4.53 million. The total is about $6.9 million, of which about $0.5 million is paid in company stock. The assets are about 795 net royalty acres in the SCOOP and Haynesville plays, and the company says the cash portion is to be raised through an underwritten public stock offering announced at the same time. Initial closings are expected in early October, subject to conditions and price adjustments. This is the company's first Haynesville entry and, as the first purchase after the June 2020 credit cut, is a return to buying minerals.
The company said its March 31, 2020 quarterly financials should no longer be relied on. Revenue was overstated by about $705,000 because ownership interests in three wells were wrongly identified. The filing also reports a material weakness in internal controls over revenue accruals. It says cash flow, debt and cash balances were not affected. The company will restate the 10-Q and plans fixes before its June 2020 quarter 10-Q, expected August 13, 2020.
On June 24, 2020 the company signed a seventh amendment to its credit facility with Bank of Oklahoma, cutting the borrowing base to $32.0 million from $80 million. The base then falls by $1.0 million each quarter starting July 15, 2020. Cash above $2.0 million for more than seven days must go to repay debt, hedges are required for 18 months, restricted payments are capped at $1.0 million for one year, and loan margins rise. The press release gives net debt of $27.7 million ($30 million debt, $2.3 million cash) as of June 23, 2020, and says the company is exploring sales of certain assets.
On July 2, 2018 the company made a fifth amendment to its bank credit facility with the same lenders. The borrowing base stays at $80 million. The amendment changes language on hedging with other counterparties and adds flexibility on restricted payments. The extended 2022 maturity from the October 2017 amendment is not changed by this filing.
On October 25, 2017 the company amended its bank credit facility (Bank of Oklahoma, MidFirst, BancFirst, Amarillo National Bank) for the fourth time. The revolver stays at $200 million with an $80 million borrowing base, and maturity is extended from November 30, 2018 to November 30, 2022. The amendment also changes loan pricing, financial covenants and the dividend covenant. The 80% mortgage requirement is now limited to well bores. This updates the June 2014 terms, when the borrowing base was $130 million.
19 June 2014asset acquisition disposition● NeutralMajor
The $80,400,000 Eagle Ford purchase closed on June 17, 2014 (subject to customary post-close adjustments), now counting 63 producing wells and 109 undeveloped locations. To fund it, Panhandle amended its bank credit facility: the revolving loan rose from $80,000,000 to $200,000,000, the borrowing base from $35,000,000 to $130,000,000, and maturity moved from November 30, 2017 to November 30, 2018. BancFirst and Amarillo National Bank joined the lenders, at least 80% of proved producing property value must be mortgaged, and the attached amendment raises the permitted Debt to EBITDA ratio from 2.50:1.00 to 4.00:1.00. Audited financials for the acquisition are promised by August 29, 2014.
Panhandle signed a deal to buy a 16% non-operated working interest in 11,100 gross (1,775 net) acres in the Eagle Ford Shale oil window in LaSalle and Frio Counties, Texas, for $80,400,000 from private sellers, effective April 1, 2014. It is far larger than the 2011 Arkansas gas purchase ($17,500,000). It is to be funded from the bank credit facility and operated by Cheyenne Petroleum, and the press release says it will significantly increase Panhandle's current oil production of about 720 barrels per day. Closing was projected within 30 days.
27 Oct 2011asset acquisition disposition▲ GoodMajor
The Fayetteville Shale purchase announced on October 4 closed on October 25, 2011 at the stated $17,500,000, effective September 1, 2011. The assets are interests in 193 producing non-operated gas wells and 1,531 acres of leasehold in Arkansas, with about 240 future infill drilling locations identified. Net production is projected at about 2.7 Mmcf per day in the fourth calendar quarter, and the deal was funded with cash on hand and the bank credit facility.
Panhandle agreed to buy interests in 193 non-operated natural gas wells and 1,531 acres of leasehold in Van Buren, Conway and Cleburne Counties, Arkansas, in the Fayetteville Shale, for $17,500,000 from a private seller. Closing was expected around October 25, 2011, to be funded from cash on hand and its credit facility with Bank of Oklahoma.
The board approved change-in-control severance agreements effective September 4, 2007 with three executives: Michael Coffman (President and CEO), Ben Spriestersbach (VP of Land) and Lonnie Lowry (VP, Controller and Secretary). They provide severance payments and benefits if a change in control occurs as defined in the agreements. No amounts are stated in the filing, and no change in control is reported.
By now the company is named Panhandle Oil and Gas Inc. Its board approved updated indemnification agreements with directors and officers, effective June 15, 2007, covering indemnification and expense advancement to the fullest extent permitted by law and continued D&O insurance coverage where insurance is maintained. No dollar amounts are given and nothing about operations or finances changes.
This amendment supplies the audited Wood Oil financial statements and pro forma figures promised in the October filing. The deal terms are unchanged, but Wood's estimated net proven reserves are now stated as 13.1 billion cubic feet equivalent at October 1, 2001, up from 11.03 in the original. In its year to July 31, 2001, Wood reported net income of $5,537,485 on oil and gas sales of $9,519,924, and the auditor (Ernst & Young) gave a clean opinion.
16 Oct 2001asset acquisition disposition▲ GoodMajor
Panhandle Royalty bought privately held Wood Oil Company of Tulsa on October 1, 2001 for an adjusted $22,603,886 (including $4,195,794 of working capital assumed). Wood brings about 71,000 net fee mineral acres, 14,923 net leasehold acres and interests in roughly 2,000 producing wells. It was paid for with a new $20,000,000 five-year BancFirst term loan, and $3,000,000 of Wood's cash was used to pay down Panhandle's debt. Audited Wood financials were not yet available and were promised within 60 days.
