RNS Number : 9595X
Resaca Exploitation L.P.
01 July 2008
For immediate release 1 July 2008
Resaca Exploitation, Inc.
("Resaca" or "the Company")
INTENTION TO RAISE UP TO US$100 MILLION AND ADMISSION TO AIM
Resaca, an independent oil and gas exploitation company based in Houston, Texas, today announces 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 (the "Placing").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, utilising 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
per cent. of Resaca's
current proved and probable reserves, produce from shallow formations at average depths of less than 4,000 feet).
Highlights:
* As at 1 January 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.
* 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
* Resaca intends to add to review opportunities to expand into new assets which may include the acquisition of
additional interests
in the Permian Basin and other basins within and in the longer term, and outside the U.S.
Commenting on the Offer, 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 programme 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."
For further information please contact:
Buchanan Communications +44 (0)20 7466 5000
Tim Thompson
Ben Willey
Catherine Breen
Notes to Editors
About Resaca
Resaca is an independent oil and gas development and production company based in Houston, Texas. 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,
utilising a variety
of primary, secondary and tertiary recovery techniques. These Properties are located in the Permian Basin of West Texas
and Southeast New
Mexico.
Through its relationship with Torch Energy Advisors Incorporated, a privately owned, Houston-based company, Resaca
has access to an
experienced team with a long and successful history of owning and operating oil and gas projects, having been
responsible for the investment
and management of over US$3 billion in the energy industry.
The net proceeds of the Placing receivable by the Company will provide significant further equity capital for the
Company, strengthen
the Company's capital base and put Resaca in a strong position to progress its business strategy and take advantage of
future acquisition
and development opportunities as and when they arise.
In particular, Resaca intends to use the proceeds of the Placing to finance its planned exploitation programme in
West Texas and
Southeast New Mexico; acquire additional interests in the Properties and in adjacent properties; and examine other
potential opportunities
in the US and other areas outside the US as they arise.
Strategy for growth
The Company intends to create long-term shareholder value by exploiting its portfolio of long-life properties,
which have high levels of
original oil in place, through a variety of exploitation techniques and modern technologies encompassing primary,
secondary and tertiary
recovery. Resaca intends to acquire additional oil and gas properties with similar exploitation potential. Resaca's
business strategy
involves the exploitation of proved developed reserves with associated proved undeveloped and probable reserves. As
opposed to exploration
operations, all of the value in an exploitation operation is in the reserves and exploitation operations have minimal
geological risk. Resaca's exploitation efforts will involve the application of current technology to mature oil and gas properties,
including infill
drilling, well deepening, uphole re-completions, waterfloods, foamed acid fracturing procedures and CO2 flooding.
PROJECTS AND OPERATIONS
Summary of Properties Owned by Resaca
The Properties are located in West Texas and Southeast New Mexico on the Central Basin Platform of the Permian
Basin and consist of
approximately 15,000 gross/14,000 net acres contained in three main field complexes and a group of minor fields. The
Company's primary
fields, which contain 88 per cent. of Resaca's current proved and probable reserves, are the Cooper Jal Unit in Lea
County, New Mexico;
the Penwell Complex in Ector and Crane Counties, Texas; and the Grand Clearfork Unit in Pecos County, Texas (the
"Primary Properties"). Primary and secondary (waterflood) techniques are projected to increase estimated net production from proved and
probable reserves on all
the Company's properties to over 3,000 bo/d and 4,000 Mcf/d by the end of 2011. Additional probable oil reserves are
projected to be
accessed through tertiary recovery (CO2 flood) techniques which are estimated to build net production to over 6,200
bo/d and over 3,300
Mcf/d by the end of 2014.
The Primary Properties currently produce from the Yates, Seven Rivers, Queen, Grayburg, San Andres, Clearfork and
Tansil formations. The
Primary Properties include approximately 171 producing wells, 59 injection wells and 25 shut-in wells. Resaca's
exploitation plan, which was
initiated in 2006, is to reactivate most of the shut-in wells, reactivate and seek to optimise the existing waterfloods
and conduct a
significant infill drilling programme. The Directors believe that the Primary Properties represent excellent
opportunities for the
development of low risk oil reserves. Resaca has initiated the first phase of its waterflood optimisation programme
through the successful
drilling and completion of nine new infill wells, re-completion of 13 existing wells and modernisation and upgrading of
surface facilities.
The first stage of Resaca's waterflood optimisation programme is to re-establish a waterflood in the Cooper Jal
Unit. Resaca has
re-entered five abandoned wells and has converted them to water injector wells. Resaca is in the process of completing
the clean out of
thirteen existing injector wells.
In addition, the Directors believe the Primary Properties are excellent candidates for tertiary recovery by CO2
flooding. The use of CO2
for this type of enhanced recovery has revitalised many older proven oil producing fields in the Permian Basin. Several
major companies are
operating CO2 floods in the region. Therefore, the Directors believe CO2 flooding provides a potential means to further
enhance the value of
the Primary Properties.
DIRECTORS AND OFFICERS
The Board comprises, and will immediately following Admission comprise, the individuals set out below.
James Perry ("J.P.") Bryan, Jr., Non-executive Chairman of Resaca, aged 68
Mr. Bryan is the Chief Executive Officer of Torch. During his 40-year career in the energy industry, Mr. Bryan has
served as President,
Chief Executive Officer and Chairman of the Board of various independent exploration and production companies,
including Bellwether
Exploration Company, Nuevo Energy Company and Gulf Canada Resources Limited. He was also Chairman of the Board and
Chief Executive Officer
of Torch and its predecessor company. He is a former Member of the Board of Directors of AutoNation, Inc., which sells
new and used
automobiles. Mr. Bryan earned a Bachelor's degree in Business and a law degree from the University of Texas. He also
received a degree in
international business from the American Institute of Foreign Trade (Thunderbird).
John James ("Jay") Lendrum, III, Chief Executive Officer and Director of Resaca, aged 57
Mr. Lendrum became Chief Executive Officer of Resaca in August 2007. He re-joined Torch as its President and Chief
Operating Officer in
2005 having previously worked at Torch from 1986 to 1993. Between 1993 and 2005, he was founder and President of
Rockport Resources Capital
Corporation, a firm that specialised in providing capital to the energy industry, and has been a principal in a private
mid stream gas
company. Mr. Lendrum previously served as Executive Vice President and Chief Financial Officer of Torch and was
involved in the management
of Nuevo Energy Company, Bellwether Exploration Company, and Energy Assets International Corporation. He was also
Executive Vice President
and Chief Financial Officer of a private oil and gas exploration company for four years and worked with KPMG Peat
Marwick for seven years. Mr. Lendrum graduated from the University of Texas in 1973 with an undergraduate degree in Finance and completed his
graduate studies in
Accounting Theory. He is also on the Board of Directors of BPZ Energy, a company with oil and gas activities in South
America.
John William Sharp Bentley, Non-executive Director, aged 60
Mr. Bentley has over 35 years' experience in the natural resources sector. He was Managing Director of Gencor's
Brazilian mining
company, Sao Bento Mineracao, during the period 1988 to 1993 when he became Chief Executive Officer of Engen's
Exploration and Production
("E&P") division. In 1996, he was instrumental in spinning off Energy Africa Limited from Engen and listing it on the
Johannesburg and
Luxembourg stock exchanges. As Chief Executive Officer during its first five years, he guided Energy Africa Limited
through its development
into one of the leading independent E&P companies in Africa. More recently he was Executive Chairman of FirstAfrica Oil
plc from September
2006 until its acquisition by BowLeven plc in early 2007. He is non-executive chairman of CDS Oil & Gas Group Plc,
Faroe Petroleum plc and
Artumas Group Inc. and a non-executive director of Rift Oil plc. Mr. Bentley holds a degree in Metallurgy from Brunel
University.
Judy Ley Allen, Non-executive Director, aged 69
Ms. Allen has, since 1977, been an asset manager for Allen Investments, which has significant holdings in oil and
gas, real estate,
timberland and stocks and bonds. She is a former director of the Federal Reserve Bank of Dallas and currently sits on
the Advisory Board of
Governors of Rice University. She is an advisory trustee of the Houston Ballet Foundation and a trustee of the Houston
Museum of Natural
Science. Ms. Allen received a Bachelor of Arts degree from Stanford University and a Master's degree in Business
Administration from Harvard
Business School.
Richard Kelly Plato, Non-executive Director, aged 38
Mr. Plato is Senior Vice President and Managing Director of NGP Capital Resources Company (Nasdaq:NGPC), a publicly
traded financial
services company organised to invest, primarily, in small and mid-size private energy companies. Mr. Plato has 15 years
of investment
management, corporate finance, engineering and general management experience in the energy industry. Mr. Plato also
serves on the Board of
Managers of one of NGP's portfolio companies, Rubicon Energy Partners, LLC. Prior to joining NGP, Mr. Plato was a
co-founder and partner of
Odyssey Energy Capital, LLC, a private capital provider to the energy industry. Prior to Odyssey, Mr. Plato served in
various management
positions with Mirant Americas Energy Capital, LP, Tri-Union Development Corporation and Fina Oil and Chemical Company. Mr. Plato earned a
Bachelor of Science degree in Petroleum Engineering from Texas A&M University and a Doctorate of Jurisprudence from
South Texas College of
Law.
This information is provided by RNS
The company news service from the London Stock Exchange
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