VHGI Holdings to Purchase Assets in Bankruptcy Sale
VHGI Holdings announced that its subsidiary, VHGI Gulf Coast Holdings, has signed an agreement with the Trustee for Sterling Exploration & Production Company and Yazoo Pipeline Co. to purchase all of the assets from such entities for $4.5 million in a Chapter 7 bankruptcy sale. "The assets associated with this transaction will include thirty-seven wells, seven operated platforms, two outside operated platforms, and more than one hundred miles of oil and gas pipelines. The company will be providing the specific details of this transaction in the filing of the 8-K report," stated Jim Renfro, President, VHGI Holdings, Inc.
The closing of this transaction is subject to certain conditions precedent, including approval of the bankruptcy court and the consideration of higher or otherwise better competing bids. There can be no assurances that a higher or better competing bid will not be received or that the bankruptcy court will approve the sale of the assets of VHGI Gulf Coast Holdings.
If completed, this acquisition will mark a major milestone in the history of VHGI Holdings and immediately launch the company from an exploration company to one directly producing revenue from the production of both oil and gas. "VHGI 's new business plan revolves around the identification and subsequent purchasing of select assets that are either currently producing revenues or with some additional capital can achieve revenues quickly and maintain an interest in those assets," continued Renfro, "and we feel that the Sterling-Yazoo purchase is one such step in the right direction." VHGI plans to continue to grow in the energy sector and intends to align itself with experienced partners to quickly establish a presence in this market. To that end, the company has recently partnered with Gulf Coast Exploitation, LLC to run the operations. Gulf Coast Exploitation's management team has over ninety years of experience in the Gulf and Texas state waters. Gulf Coast will invest $1,500,000 in this transaction and will own 33% of VHGI Gulf Coast Holdings.
The reserve report prepared by Netherland Sewell (NSAI), an independent third party engineering firm, provides very favorable reserve estimates for the E&P PDPs, PDNPs, and PUDs, with an estimate of $27 million PV at 10% of proven reserves of 1.2 million barrels. All current and potential well sites are located offshore in the State Waters of Texas. The operational activities include workovers, recompletions, and development drilling at multiple tracts.
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