Resaca Intends to Enlist on AIM and Provides Operations Update
Resaca announced its intention to list on the AIM Market of the London Stock Exchange in conjunction with an institutional placing to raise up to $100 million. On admission to AIM, the Company is expected to be valued at around $250 million. The Placing is being conducted by Seymour Pierce, the Company's Nominated Advisor, and RBC Capital Markets, its Joint Broker. Participants in the Placing are expected to include institutional investors from the United Kingdom, Europe and North America.
Dealings are expected to commence in the common shares on the AIM Market of the London Stock Exchange in mid July.
Resaca's activities are currently focused on the exploitation of its portfolio of long-life properties, which have high levels of original oil in place, utilizing a variety of primary, secondary and tertiary recovery techniques. These properties comprise a number of oil & gas fields located in the Permian Basin of West Texas and Southeast New Mexico. The primary fields, which contain 88% of Resaca's current proved and probable reserves, produce from shallow formations at average depths of less than 4,000 feet.
Resaca's highlights include that as of January 1, 2008 Resaca had proved and probable reserves of 28.1 MMbbIs of oil and 19.3 Bcf of gas with an after tax NPV10 of $423.7 million. Also, Resaca's exploitation operations will involve the application of current technology to its mature oil and gas properties, including through secondary waterfloods and the intended use of CO2 for tertiary recovery. Net production from proved and probable reserves on all the Company's properties is projected to be 3,700 boe/d through primary and secondary recovery by the end of 2011 and to exceed 6,700 boe/d through the addition of tertiary recovery by the end of 2014. During 2007, Resaca's average net revenue interest production was approximately 760 boe/d and Resaca intends to expand into new assets.
Jay Lendrum, Chief Executive Officer said, "I am delighted that Resaca is joining AIM. Resaca's producing properties in the Permian Basin in the US are mature fields and are readily exploitable through secondary and tertiary recovery techniques such as CO2 enhanced recovery. The flotation and fund raising will allow the Company to pursue its planned exploitation program in West Texas and Southeast New Mexico and to seek opportunities to expand its portfolio of properties in the Permian Basin and other, in the longer term, basins within and outside the U.S."