Admiral Bay Resources, Inc. Announces Closing of Foreclosure Action Filed by Secured Lenders
21 Luglio 2010 - 3:38AM
Marketwired
Admiral Bay Resources Inc. (TSX VENTURE: ADB) ("Admiral Bay" or the
"Company") today announced the completion of the foreclosure
proceedings previously disclosed. As a result, Admiral Bay and its
former lenders agreed to settle its debt obligations by ceding
certain corporate assets in exchange for forgiveness of
approximately $42.5 million in debt and a fund established by
lenders to satisfy outstanding trade obligations.
Upon completion of the foreclosure, Admiral Bay is debt free,
has positive working capital and retains its Ft. Scott Property in
Bourbon County, Kansas. As of July 31, 2009, Ft. Scott had proved
reserves of approximately 4.2 Bcf and is presently producing
approximately 50 Mcfgpd. The Company has also retained a 25%
working interest in the Revloc Project located in Cambria County,
Pennsylvania.
While the foreclosure process eliminated all of Admiral Bay's
outstanding debt, it also significantly reduced cash flow limiting
the Company's current ability to develop and expand production. As
a result of the foreclosure, Admiral Bay's field personnel were
transferred to the lender's entity operating the foreclosed assets.
In addition, the Company will likely eliminate key financial
personnel upon conclusion of the annual meeting in September.
The foreclosure exchanged Company proved reserves of
approximately 45 Bcf (as of July 31, 2009) of natural gas for the
forgiveness of approximately $42.5 million in debt as well as a
fund to satisfy the Company's other credit obligations. The
foreclosed assets had net, after royalty, production in the quarter
ended April 30, 2010 of approximately 2,400 Mcfgpd and is over 50%
undeveloped. With the transfer of assets in the foreclosure, the
Company also mitigated its future plugging and abandonment
liability. The Company also provided the lenders with a warrant to
purchase up to 17.5% of the common equity of Admiral Bay at a fixed
price of approximately $0.039 (CDN) per share over the next five
years.
As a result of the foreclosure action, Admiral Bay has
significantly increased its financial flexibility with a host of
options available to attempt to increase shareholder value. The
Company is considering a number of strategic options including the
sale of additional assets, the purchase of or combination with
other oil and gas assets to create a company with additional scale
and growing the Company through intrinsic drilling and development
of existing assets. Some options may require the Company to seek
additional capital. While all of these alternatives are available
and being reviewed by the Company, there are no guarantees the
Company will be successful in executing on new strategic
initiatives.
"Given the anemic gas price environment, especially in the
Cherokee Basin, and the economic morass that has acutely impacted
the energy exploration industry, this result - while personally
disappointing - is among the best outcomes available to Admiral Bay
stakeholders," said Admiral Bay Chief Executive Officer Steve
Tedesco.. "The ability to eviscerate over $42 million in secured
debt and satisfy our trade creditors without a formal bankruptcy
allows Admiral Bay to keep a core asset and consider a number of
options to rebuild shareholder value, a task on which management
and the Board of Directors are keenly focused."
About Admiral Bay Resources
Admiral Bay Resources Inc. (www.admiralbay.com) is an
unconventional gas production company focused on the development of
projects in the Cherokee Basin in southeast Kansas and the
Appalachian Basin in Pennsylvania. Admiral Bay is listed on the TSX
Venture Exchange under the symbol ADB.
Statements in this release that are not historical facts are
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Readers are cautioned
that any such statements are not guarantees of future performance
and that actual developments or results may vary materially from
those in these "forward-looking statements".
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Admiral Bay Resources Inc. Steven Tedesco President
& C.E.O. (303) 350-1255 (303) 617-8956 (FAX)
stedesco@admiralbay.com Admiral Bay Resources Inc. Robert Carington
CFO (303) 350-1255 (303) 708-1861 (FAX) rcarington@admiralbay.com
www.admiralbay.com
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