Approximately $20 million of the proceeds of the sale of these properties will be used to repay a portion of Maverick's outstanding debentures, and the remainder will be used for capital programs and working capital. Closing is expected to occur in early April 2007 following normal due diligence, which is currently ongoing. This sale was required as part of the company's earlier financings. The holders of Maverick's outstanding debentures originally required the closing to occur on or before February 28, 2007. They have agreed to extend this timeframe until the actual closing date without any penalties. The company is in discussions with these debenture holders to restructure the remainder of its outstanding indebtedness.
James A. Watt, Chief Executive Officer of the Company, stated, "This sale allows us to reduce our overall debt and increase our operating flexibility. We will now be seeking new properties with near term cash flow to support our operations and complement our long term resource play in the Fayetteville shale of Woodruff County, Arkansas."
Maverick Oil and Gas is an early stage independent oil and gas company engaged in exploration, exploitation, development and production. It currently participate in these activities through the interests it holds in oil and gas exploration and development projects in Arkansas, Texas and Colorado.
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