Bayou Bend Sells Substantially All US Oil and Gas Properties
Bayou Bend Petroleum has signed a definitive agreement in respect of the sale of substantially all of its U.S. oil and gas properties to Dynamic Offshore Resources, LLC., a private company based in Houston, Texas. The purchase price for the transaction is US $12.5 million, payable in cash upon closing of the transaction. In addition, a deferred payment of up to US $8.0 million may be made on April 1, 2011, based upon the increase in proved oil and gas reserves attributable to the purchased interests as at December 31, 2010 above a specified threshold, at a rate of US $0.20 per Mcfe.
The transaction is subject to shareholder and regulatory approval.
Bayou Bend plans to hold a special meeting of shareholders to approve the transaction and related matters on May 22, 2009. Upon receipt of all approvals, the transaction is expected to close by the end of May 2009, with an effective date of April 1, 2009.
Keith Hill, President of Bayou Bend, commented, "The board of directors unanimously recommends that shareholders approve the sale. Upon closing of the transaction, the Company will have a very strong cash balance exceeding Cdn $60 million. This represents a clear advantage for Bayou Bend in these currently challenging markets and allows the Company to pursue the wealth of distressed, undervalued resource opportunities available today."
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