Casey,
Great news --- this means they have not gone bankrupt yet. The earlier letter of intent to sell down this interest expired on Saturday so the fact that a company has signed another LOI since then indicates that Benz is still alive and kicking. Wonder if this buyer is the same as the previous one.
Here's an excerpt from the SEC filing:
On July 7, 1999, we executed a letter of intent with Prime
Natural Resources, Inc. for the sale of 37.5% of our interest in the Old
Ocean Prospect. The consummation of the transaction is subject to the
negotiation and execution of a definitive purchase and sale agreement. Under
the letter of intent, Prime has agreed to pay us $3,500,000 at closing and
$1,978,098 on or before September 15 in consideration of the interest to be
purchased. We will reserve an
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overriding royalty interest in all leases and contractual rights to volumes
of production and all similar interests, whether we currently own them or
later acquire them, within the established area of mutual interest for the
project. Prime has an option for a six month period to purchase an additional
12.5% of our interest in the Old Ocean Prospect, subject to the overriding
royalty reservation set forth above, at a purchase price of $1,826,033, plus
$214,276 at the end of the six month period. We have agreed to enter into an
agreement under which Prime or one of its affiliates will have the right to
market the 3-D seismic geophysical data covering the Old Ocean Prospect for a
ten year period following a 120 day exclusivity period that we have retained.
Prime will be entitled to our share of the proceeds from the sale of the
data, which share may be no less than 66 2/3%, subject to applicable sales
commissions. In addition, Prime or its affiliate must grant us a license to
other geophysical data outside the Old Ocean Prospect owned by Prime or its
affiliate. We may select the outside data of our choice covering up to 102
square miles. The letter of intent will expire if the transactions
contemplated thereby are not closed on or before July 31, 1999.
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Has anyone heard of Prime Natural Resources? They don't appear to be a public company, but obviously must be pretty big to buy into this play with that kind of dough.
It makes sense that the bankers/finance companies that Benz is talking to would insist that they line up this sell-down of the Old Ocean interest before committing to the financing. Maybe they also want the Fortenberry test results publicly announced first, too. Hopefully that is not far away. |
