Upon execution of the SPA, Dune delivered a $15 million earnest money deposit to the selling shareholder of Goldking, which will be credited against the purchase price at closing. The proposed acquisition is subject to customary closing conditions. Dune intends to utilize a combination of debt and equity in order to fund the acquisition and the closing of the transaction is contingent on Dune's ability to raise sufficient capital. Dune expects to close the acquisition on or before May 28, 2007, but in no event later than June 12, 2007.
Concurrent with the execution of the SPA, Dune entered into a Credit Agreement with Jefferies Funding LLC, pursuant to which Jefferies advanced a total of $65 million. The proceeds were used to purchase outstanding loans under Dune's prior credit facility, to pay the $15 million earnest money deposit, to fund Dune's current development, and for general working capital.
Goldking holds a diversified mix of oil and gas properties spread over some 65,000 net acres. The properties, located onshore along the Gulf Coast of Louisiana and Texas, provides meaningful current production coupled with numerous near term PUD and PDNP development opportunities, as well as company making exploration potential. On a pro forma basis, Dune will have independently engineered estimated proved reserves of 142 Bcfe, of which approximately 41% would be classified as proved developed and 63% would be natural gas.
The "New" Dune:
Alan Gaines, Dune's Chairman stated, "This acquisition transforms Dune into a substantial, highly focused independent E&P company, with a balanced portfolio of development drilling and high impact exploration. The transaction will be immediately accretive to Dune's cash flow, production and net asset value, in keeping with our ongoing commitment to maximize shareholder value."
James A. Watt, Dune's newly appointed Chief Executive Officer commented, "I look forward to working with Alan and the existing Dune and Goldking technical teams to build upon the existing asset base of the two companies. We have numerous opportunities for exploitation of existing reservoirs and deeper pool tests on these properties utilizing current technology and the talents of the technical teams."
Most Popular Articles
From the Career Center
Jobs that may interest you