GFB Acquisition I, LP, GE Financial Services and Isramco, Inc. have executed an Agreement pursuant to which GFB and GE have agreed to sell their varying working interests in certain producing oil and natural gas properties located in Texas, New Mexico and Oklahoma to Isramco for total consideration of approximately $102 million. The effective date of the transaction is January 1, 2008 and it is expected the transaction will close in March 2008, subject to customary closing conditions.
The transaction includes mainly operated oil and natural gas properties in approximately 40 fields in East Texas, the Texas Gulf Coast, Permian, Anadarko and San Juan Basins. Significant fields are the Alabama Ferry Field in East Texas, the Bagley Field in West Texas and New Mexico, and the Esperson Dome Field on the Texas Gulf Coast. Net daily production from the properties is approximately 600 Barrels of oil and 3.5 MMCF of natural gas. Based on a reserve report prepared by a third party consulting firm as of January 1, 2008, total net proved developed producing reserves are approximately 2.7 million barrels of oil and 14 BCF of natural gas.
The Company anticipates that it will fund up to 5% of the purchase price from working capital, and that it will obtain third party loans to fund the rest of the purchase price. In connection with the entry into the agreements, on February 15, 2008, the Company and the Bank of Nova Scotia entered into a commitment letter pursuant to which the bank agreed to provide or arrange a secured revolving credit facility, subject to the execution of customary loan documents, and other customary closing conditions for transactions of this type. Under such credit facility, it is anticipated that the Company will be able to initially borrow up to $54 million.
GFB Acquisition I, LP is a Midland, Texas based operator of oil and gas properties, formed in a partnership with GE Financial Services to acquire and exploit properties located in onshore oil and natural gas basins in North America.
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