Each one in plain English, with the numbers worked through for a shareholder.
21 Oct 2013material agreement▲ GoodMajor
The amended EOG deal announced in September closed on October 15, 2013, with some terms changed. ZaZa assigned about 20,000 net Phase II acres and about 7,800 former Phase III acres (rather than the 6,000 minimum first announced). It received $17M cash for Phase II, a further $1.5M cash payment, and interests in 15 EOG producing wells. In the acreage swap it paid about $700,000, down from the roughly $2M first stated. The company's release says it received $17.8M net cash, interests in 23 wells with about $17M of PDP value per an independent report, and a 25% interest in about 19,000 acres. About 12,300 Phase III acres remain, which EOG can elect into by January 31, 2014.
On September 25, 2013 ZaZa signed an amended agreement with EOG Resources that speeds up the joint venture phases it agreed in March. EOG moves into Phase II early: ZaZa assigns 20,000 net acres for $17M cash plus about $3M of interests in EOG's producing wells, and a further $1.5M cash payment. ZaZa also assigns at least 6,000 former Phase III acres for about $9M of production interests, and swaps acreage with EOG (ZaZa gets 25% of about 19,000 acres, gives up about 13,875 acres and pays about $2M). The company's release puts net cash at $16.5M. This continues the EOG JV thread, and the deal had not closed as of this filing.
CEO Todd Brooks agreed on August 21, 2013 to buy 1,500,000 new shares directly from the company at $0.92 each (the closing bid that day), for $1,380,000. The company says it will use the money to acquire oil and gas properties, and the release says specifically more acreage in the Eaglebine/Eagle Ford East area. It adds a small number of new shares, so existing holders are slightly diluted.
31 July 2013asset acquisition disposition▲ GoodMajor
The Moulton sale to SN Marquis (a Sanchez Energy subsidiary) closed on July 26, 2013: about 10,300 net acres and seven producing wells, for about $28.8M, with $29.3M in cash received. The filing also says the earlier ~$9.2M sale to the same buyer closed on April 5, 2013 with $8.8M received, which settles the open question about the remaining-acreage sale. The company's release says it intends to use part of the proceeds to cut debt as its debt agreements require.
2 July 2013material agreement termination▼ BadMajor
ZaZa ended the March BEP Moulton sale (about $43.3M) on June 27, 2013 because it had not closed by the outside date; the company's release says the buyer could not fund and close. It signed a new deal with SN Marquis, LLC (a Sanchez Energy subsidiary) to sell about 10,300 net Moulton acres with seven producing wells for about $28.8M, a deposit of about $1.4M received, closing expected by July 31, 2013. That is roughly $14.5M less than the failed deal's price, though the acreage covered differs slightly. The earlier plan to sell the remaining Moulton acreage for about $9.2M is not mentioned here.
ZaZa agreed to sell about 10,000 net Moulton acres in the Eagle Ford, with seven producing wells, to BEP Moulton, LLC for about $43.25M cash (about $42M net), expected to close in Q2 2013. The press release adds that closing needs an amendment to the senior secured notes agreement, and a second agreement sells the remaining Moulton acreage for about $9.2M, for about $52.5M combined. Proceeds are meant for exploration spending and/or paying down the senior notes. This carries out the plan to sell Eagle Ford assets received in the Hess split.
ZaZa signed a joint development agreement with EOG Resources for about 100,000 gross (73,000 net) Eaglebine acres, in three phases. EOG operates and earns up to 75% working interest where ZaZa owned 100%, with ZaZa keeping 25%. Phase I brings $10M cash plus three wells paid by EOG for 20,000 net acres; phases II and III are EOG's option, at $20M each plus three wells each for 20,000 and 15,000 net acres. This builds on the Range arrangement, with the substitute well due to Range becoming the second Phase I well. The press release does not name EOG, and says ZaZa keeps 19,000 net acres at 100%.
ZaZa stopped drilling the Grimes County commitment well with Range and signed Amendment No. 5 (effective Jan 16, 2013): 60 days to start re-completing it as a vertical well and 180 days to start a substitute well. If it misses the deadlines and has no sales from the substitute well by Sept 1, 2013, it must give Range a further 25% (leaving ZaZa 50%) and hand over operatorship. ZaZa bears 100% of the cost of the original and re-entry wells. The same day's release says the Stingray A-1H lateral was lost to a casing collar failure after multiple remediation attempts, which contradicts the earlier plan to fix the restriction and start sales; it will be re-entered and tried as a vertical well. Commodore A-1 was drilling at 12,237 ft with liquid shows, and the Boening A-1H was fracked with first production expected early to mid-February.
This amendment to the December 27 filing adds unaudited pro forma financials for the French subsidiary sale to Vermillion REP SAS (closed December 21, 2012). On a September 30, 2012 basis, the pro forma balance sheet shows senior secured notes (net of discount) falling from $46.8M to $13.0M after a $33.8M principal payment, and $15.0M of restricted cash for the Hess escrow. No new transaction terms are given.
27 Dec 2012asset acquisition disposition▲ GoodMajor
On December 21, 2012 ZaZa closed the sale of ZaZa Energy France SAS to Vermillion REP SAS, receiving about $76.0 million net purchase price and about $68.0 million after advisor fees, liquidation costs and taxes. About half of the net proceeds went to pay down the senior secured notes, $15.0 million is held in escrow until the Paris Basin permits transfer to Hess, and the rest is for the development program. This completes the French part of the Hess exit that had been awaiting approval, and the press release says the permit title transfer is expected in 2013. The filing does not give the remaining senior note balance; the CEO's quote says over two-thirds of the senior secured debt has been paid down in under a year.
Effective December 17, 2012 ZaZa and its senior secured noteholders signed Amendment No. 4, which allows the transfer of certain intercompany loans when the French subsidiary sale closes and revises some defined terms, including in the warrants. This is the noteholder approval that the Vermillion sale agreement required before closing. The filing gives no other terms.
ZaZa said on December 11, 2012 that France's ministers had issued a letter of non-objection on December 10 to the sale of the French subsidiary to Vermilion, which it still expected to close by year-end. It also said the Stingray well in the Eaglebine hit a restriction during completion that will limit production in the near term, and that it plans to start sales by December 16 to meet its Range obligation and then shut the well in to fix it. ZaZa plans to sell two Eagle Ford prospects (Dilley, about 2,000 net acres, and Hackberry/Oakland, about 23,000) in the first quarter of 2013, leaving about 47,000 net acres. Management said senior executives intend to buy shares in the open market.
On November 13, 2012 ZaZa agreed to sell all the shares of ZaZa Energy France SAS to Vermillion REP SAS (a Vermillion Energy subsidiary) for $85.8 million cash, before adjustments, with closing expected before the end of 2012. ZaZa plans to use part of the proceeds to pay down its senior secured notes and speed up Texas drilling, and $15.0 million will sit in escrow until the Paris Basin permits are transferred to Hess. This is the French side of the Hess deal that was still pending; closing needs government approvals, Hess France's consent and senior noteholder approval of an intercompany loan transfer. The attached earnings release also reports third-quarter total revenues and other income of $207.2 million, including $197.0 million of other income, and net income to common shareholders of $133.8 million. It also says the 10-K and the first two 10-Qs were filed and NASDAQ confirmed full compliance, which resolves the earlier listing thread.
22 Oct 2012capital raising announcement● NeutralMajor
On October 22, 2012 ZaZa sold $40 million of 9% convertible senior notes due August 1, 2017 in a private placement at $950 per $1,000, for gross proceeds of $38.0 million and about $35.2 million net. The money is meant for drilling spending, leasehold deals and general corporate purposes. The notes are unsecured and can be converted into shares at $2.50 each (400 shares per $1,000 note), so they could dilute existing shareholders if converted. The same day's filing also records a third amendment to the secured noteholders' agreement that allows this new debt and changes the terms of their warrants.
On August 15, 2012 NASDAQ sent a third non-compliance letter, for the late quarterly report (10-Q) for June 30, 2012, requiring an update to ZaZa's compliance plan by August 30, 2012. Trading is not suspended; ZaZa says it expects to file soon, helped in part by completing the Hess transaction. The earlier 10-K and March 10-Q filings are still not shown as filed in this record.
30 July 2012asset acquisition disposition● NeutralMajor
On July 25, 2012 ZaZa closed the Texas side of the Hess deal agreed in June: it received about $69 million cash and about 60,500 more net Eagle Ford acres (core now about 72,000 net acres), and Hess got about 4,490 net acres in the Cotulla area plus small royalties. The French part awaits government approval. ZaZa then paid down $33.0 million of the senior notes plus a $3.5 million fee, under amended terms including a rate step-up to 10% if the notes are not at $35 million by Feb 21, 2013. The filing says the Hess partnership ended after the sides had different understandings of Hess's obligations, and that French fracking legislation had cut the value of the French agreements. CEO Craig McKenzie resigned effective August 1 with a $550,000 lump sum and other benefits, and Todd Alan Brooks became CEO.
On June 8, 2012 ZaZa signed a non-binding Heads of Agreement with Hess to end their 2010 Eagle Ford and Paris Basin deals. If completed, ZaZa would get $70 million cash, about 60,500 more net Eagle Ford acres (taking its core to about 72,000 net acres), a share of any Hess sale proceeds above $1 billion, and would hand over its 50% Paris Basin exploration licence interest while keeping a 5% revenue interest capped at $130 million. Hess also paid $15 million on June 8 to drop its well-carry obligation in the Cotulla area. Alongside, noteholders waived existing defaults (including late audited financials) and will consent if ZaZa pays down $33 million of the senior notes plus a $3.5 million fee; the rate rises to 10% if the notes are not at $35 million by Feb 21, 2013. ZaZa also hired Jefferies to seek joint venture partners.
On May 21, 2012 NASDAQ sent a second non-compliance letter, this time for the late quarterly report (10-Q) for March 31, 2012, with a compliance plan due by June 18, 2012. This adds to the April notice over the unfiled 2011 10-K; the company says trading is unaffected and it expects to file soon.
NASDAQ told ZaZa on April 17, 2012 that it is out of compliance with listing rules because its 2011 annual report (Form 10-K) has not been filed. ZaZa must submit a plan to regain compliance within 60 days; trading is not affected for now, and the company expects to file the 10-K soon.
ZaZa completed the security it owed the holders of its $100 million senior secured notes: a deed of trust (April 10, 2012) on ZaZa LLC's Eagle Ford and Eaglebine oil and gas properties, plus security and pledge agreements (April 11) over substantially all personal property and subsidiary shares. This follows through on the February 2012 financing; only 49% of Toreador's stock is pledged until French regulatory clearance, and foreign subsidiary pledges are limited to 65%.
On March 28, 2012, ZaZa agreed with Range Texas Production, LLC (a Range Resources subsidiary) to acquire a 75% working interest in Grimes County, Texas leases (about 61,123 gross / 37,837 net acres), with Range keeping 25%. ZaZa becomes operator, must drill a commitment well by July 1, 2012 and pay for it fully until sales start, make two cash payments (amounts not disclosed), and lose the interest if it misses the July 1 drilling or November 1, 2012 first-sales deadlines. The press release says this takes its Eaglebine holding to about 144,123 gross (89,378 net) acres and a six-well drilling program starting May 2012.
On February 21, 2012, ZaZa raised $100 million through 8% senior secured notes due February 21, 2017, sold with warrants over 26,315,789 shares at $3.15 each to MSDC ZEC Investments and Senator Sidecar Master Fund. The proceeds are to repay Toreador's convertible notes, pay combination fees and fund working capital. The filing also says the combination with Toreador closed, with the former ZaZa LLC owners receiving $47.33 million of 8% subordinated notes (due August 17, 2017). The notes are secured by a first-priority lien on substantially all assets of the company and its domestic subsidiaries. The warrants would be about 20.6% of the fully diluted shares, so exercise would dilute existing holders.
Second amendment to the merger registration statement. The deal terms are unchanged, but the shares are now said to trade on the Nasdaq Capital Market (earlier drafts said the Nasdaq Global Market) under ZAZA. A new section on non-competition agreements appears in the table of contents. The Toreador vote is still pending, with dates left blank.
First amendment to the merger registration statement. The deal terms are unchanged (one new share per Toreador share, 25%/75% split, agreement dated August 9, 2011 'as amended'). The number of shares registered rises slightly to 25,325,617, which is 6,276 more than before, with an extra fee. The merger is still awaiting effectiveness and the Toreador vote.
ZaZa Energy Corporation, a newly formed holding company, filed to register up to 25,319,341 shares for a planned combination of ZaZa Energy, LLC and Toreador Resources Corporation under an agreement dated August 9, 2011. Toreador holders would get one new share per Toreador share and own 25% of the combined company, with ZaZa's current owners holding 75%. The combined company would hold about 435,000 net acres across the Eagle Ford and Eagle Ford/Woodbine in Texas and the Paris Basin in France, and expects to list on Nasdaq as ZAZA. The deal still needs a Toreador shareholder vote and SEC effectiveness.
