Each one in plain English, with the numbers worked through for a shareholder.
3 Sept 2015bankruptcy or receivership▼ BadMajor
On August 28, 2015, the subsidiary Sable Operating Company filed for Chapter 11 bankruptcy in the Northern District of Texas. The company attributes it to a default of $11.325 million on the 13% senior secured notes that financed the 2014 Upham purchase, after holders gave notice on August 6 of acceleration and a foreclosure sale set for September 1, 2015. The filing covers only the subsidiary, which holds the Upham assets; it does not say the parent company filed or what will happen to shareholders' stock.
This amended filing adds the statement of revenues and direct operating expenses for the Upham properties bought on October 15, 2014 (19,881 acres, 123 wells, $9.5 million cash). It repeats the earlier acquisition description; the figures themselves are in an exhibit not reproduced here, so no results are stated. The registrant now appears under the name Sable Natural Resources Corporation.
21 Oct 2014asset acquisition disposition● NeutralMajor
Through its subsidiary Sable Operating Company (formerly NYTEX Petroleum, Inc.), the company arranged a loan of up to $15 million at 13% interest (due October 15, 2017) and used it to buy, for $9.5 million cash, 100% of leases covering 19,881 acres with 123 wells (49 producing, 69 shut-in) from Upham Oil & Gas and affiliated sellers. $8.9 million of notes were issued at closing, secured by a first lien on the purchased assets, and lenders received warrants over about 4,895,000 shares at $0.50 (up to 8,250,000 if the loan is fully drawn). Lender RKJ Holdings, owned by company President/COO and director Cory Hall, lent $2.85 million and got warrants over 1,567,500 shares. This gives the company operating oil and gas assets again after the 2012 sales, funded with secured debt and potentially dilutive warrants.
On November 29, 2012, through its subsidiary NYTEX Petroleum, Inc., the company sold its 15% interest in about 17,000 leasehold acres (including two producing wells and a carried interest in seven more drilling prospects) to Newark E&P, LLC for $3.2 million in cash. This is a further disposal after the May 2012 sale of Francis Drilling Fluids, and the filing does not say what use the cash will be put to.
On May 4, 2012 the Francis Drilling Fluids business was sold by merger to unaffiliated FDF Resources Holdings LLC for $62,500,000, so the company no longer owns it. The filing says WayPoint directed the sale after the company defaulted under the forbearance agreement (WayPoint gave notice of default on November 14, 2011) and the company did not control its timing or price. After paying debts including PNC, the WayPoint put amount, expenses and other items, the subsidiary received about $4,481,000 in cash; $6,250,000 is held in escrow, with releases at 18 and 36 months. The company also received $812,500 of accrued management fees, $110,279 of expense reimbursement and $150,000 from WayPoint, and mutual releases were signed. This ends the Francis/WayPoint saga that began in November 2010. The filing text is truncated, so the later terms of the Omnibus Agreement are not covered.
On November 3, 2011 (effective November 1), PNC Bank waived the existing defaults on the senior credit facility, including the missed fixed charge coverage ratio and reporting covenants. The amendment tightens terms: it requires third-party financing on certain unencumbered FDF real property within 180 days, sets monthly limits on capital spending, and modifies other covenants. This resolves the PNC default from April 2011, but the WayPoint issue is not addressed in this filing.
On September 30, 2011 the company and its Francis subsidiaries signed a forbearance agreement: WayPoint agreed to hold off enforcing its rights over the defaults and the unpaid $30 million put demand. In return, the company must recapitalize within 60 days by repurchasing WayPoint's securities for $32,371,264 (as of September 30, 2011) plus default-rate interest and legal fees, and it must find a lead investor within 35 days or show progress. WayPoint also agreed not to exercise its warrants for a majority of the stock or change officers and directors during the period. This is a temporary reprieve, not a fix.
PNC Bank (April 13, 2011) and WayPoint (April 14, 2011) gave notices of default after covenants were missed as of November 30, 2010 and February 28, 2011; the company cites integration difficulties at Francis Drilling Fluids and higher than expected capital spending there. On May 4, 2011 WayPoint demanded the company repurchase its warrants and preferred stock for $30,000,000 within five business days. The company says it does not expect to have the funds in time, and is negotiating, with no assurance of success. This turns the financing behind the Francis deal into a serious problem.
On January 21, 2011, the company accepted a further $420,000 of Series A Preferred Stock subscriptions, bringing the total raised in that offering to $6,000,000, and it will take no more. Each $100,000 unit included a warrant for 30,000 common shares at $2.00 for three years. National Securities Corporation was the placement agent, with fees of 10% or 3.5% of proceeds depending on the investor, plus agent's warrants.
What it means for a shareholder
30,000 new shares at $2.00 to raise about $100,000. That's 0.114% dilution: every existing holder's slice gets 0.114% smaller. If you held $1,000 of shares (500 at the issue price), your slice goes from 0.00191% to 0.0019% of the company. To keep it you'd need 1 more shares - about $2 at the issue price.
30 Nov 2010asset acquisition disposition● NeutralMajor
On November 23, 2010, the company bought Francis Drilling Fluids (a Louisiana oilfield fluids and services provider) in a deal valued at $52,677,466: $21.5 million cash, 5,407,339 company shares valued at $2.00, a $750,000 seller note and payoff of $19,612,788 of Francis debt. It was financed by a PNC Bank senior facility of up to $24 million and $20 million from WayPoint Nytex for preferred stock and warrants. The WayPoint warrants could reach 51% of the common stock if default conditions are met, and WayPoint gets board designation rights, so shareholders face heavy potential dilution and loss of control. This is a major shift from the earlier small Supreme Vacuum stake sale. The filing text is truncated, so further terms are not covered.
The company completed a $2,150,000 private placement of 12% convertible debentures (180-day maturity) with warrants, closing October 12, 2010. The debentures convert at $1.50 per share into 1,433,333 shares and the warrants (exercise price $2.00) cover 430,000 shares, so conversion and exercise would dilute shareholders. The filing notes a 1-for-2 reverse stock split effective November 1, 2010 does not change these share numbers.
On September 8, 2010, the company sold its 71.18% stake in Supreme Vacuum Services, plus a $31,250 note, to Leo and Hector Quintanilla for $400,000 cash. The filing says Supreme Vacuum's losses ($828,169 for 2009 and $235,103 for the first half of 2010) were a primary motivation, and the company expects a one-time loss of about $944,056 on the sale.
The company (filing under the name NYTEX Energy Holdings, Inc.) finished selling 5,933,102 shares of common stock at $1.00 each for $5,933,102 on July 22, 2010, to accredited investors. Each share came with a warrant to buy one more share at $0.50 over 3 years, so existing shareholders are diluted if the warrants are exercised. The sale was made under a private placement dated August 2008.
What it means for a shareholder
5.9m new shares at $1.00 to raise about $5.9m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
