Each one in plain English, with the numbers worked through for a shareholder.
21 Jan 2009capital raising announcement● Neutral
On January 20, 2009 the company sold 500,000 new shares at $0.41 each, raising $205,000, to director Michael O. Aldridge (who joined the board in December 2008). The shares are restricted and carry no registration rights, and they dilute existing holders slightly.
What it means for a shareholder
500,000 new shares at $0.410 to raise about $205,000. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
The company hired Deborah Null as land manager, effective October 27, 2008, at a $130,000 base salary with a possible bonus of up to 50% of salary. She received options on 100,000 shares at $0.60, expiring October 27, 2013 and vesting one-third on each of the first three anniversaries. Severance is 25% of base salary if terminated without cause, and her unvested options vest on a change of control. It is a small, routine hire with minor dilution.
18 July 2008capital raising announcement● NeutralMajor
On July 16, 2008 the company drew $2.5 million under an amended and restated Macquarie credit agreement dated July 11, 2008. It replaces the May 2008 $2,000,000 short-term loan (due September 13, 2008) with a revolving facility of up to $25 million due July 11, 2011, with an initial borrowing base of $5 million, of which $2.5 million remains available. The draw included $526,838 for the working capital deficit. The loan is secured by a first-priority lien on all property, with oil and gas proceeds assigned to the lender. The company also issued warrants: 750,000 shares at $1.00 (replacing the earlier warrant) and a second warrant for 1,897,419 shares at $1.00, net of the first, both expiring July 11, 2013. This extends the debt deadline but adds dilution risk. The filing text provided is truncated, so further terms are not covered.
On June 4, 2008 the company granted CEO William David Gibbs options on 1,000,000 shares at $1.00, exercisable for five years. They vest in three roughly equal parts on June 4 of 2009, 2010 and 2011, and can only be exercised while he is a director or officer. This is management compensation that could dilute shareholders if exercised.
On May 16, 2008 the company signed a secured term loan with Macquarie Bank Limited for up to $2,000,000, all due September 13, 2008. Up to $1,079,050.32 goes to current accounts payable and the remaining $920,949.68 to general corporate purposes. Interest is the lesser of prime plus 2% and the highest lawful rate, all oil and gas sale proceeds are assigned to Macquarie, and it holds a first-priority lien on all the company's property. It also received a warrant for 750,000 shares at $1.00 expiring May 16, 2013, so shareholders face possible dilution.
The company signed a consulting agreement with Sierra Pine Resources International, owned by director Bruce Ganer: $10,000 per month, 750,000 options at $1.09 exercisable to November 22, 2011 (vesting in three equal parts through 2009), and a $60,000 bonus per new well at start of commercial production. This is a related-party arrangement with a director.
The company signed a consulting agreement with Larry Keller: $175 per hour, 500,000 options at $1.09 exercisable to November 22, 2009 (half vested immediately, half on November 22, 2008), and a $25,000 bonus per successful well on Lincoln Atkins 18-1, Lincoln Atkins 8-1 and Atkins 18-2.
