Merit MEL-tse. Some interesting (painful?) reading..... News release was issued at a minute before 10p.m. Eastern Time at newswire.ca
Re-stated numbers that at Sept. 30 would appear to indicate just under $100mil. in current liabilities and another $56.8mil in LT Debt. Not a whole lot of consolation for the $15mil flow-thru done on August 17, 1999 at $6.75/share.......
Here are some cut-n-paste parts that make for some bedtime reading.
Merit Energy Ltd. Announces Third Quarter Results and Strategic Plan
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Workout Plan
Merit recently prepared and presented the ''Workout Plan'' to the Company's banking syndicate. This plan would see the Company immediately take steps to establish a new banking arrangement with the banking syndicate.
Merit's workout plan is comprised of the following:
1. Divestitures of non-strategic properties, proceeds from which will be used to repay bank indebtedness, to the extent of the borrowing base of the properties sold, with the balance applied to payables.
To date the Company has done the following:
- Effective October 25, 1999, Merit closed the announced sale of properties in the Strachan and Paddle River areas for aggregate consideration of $15 million after adjustments; and
- Merit signed letters of intent to divest of five additional properties for aggregate consideration of $9.4 million.
2. Selective capital spending on high netback, low risk, cash flow generating prospects. Merit has surveyed and permitted 11 gas well tie-ins, at an estimated capital expenditure less than $2.0 million.
3. A program has been initiated to reduce operating and general and
administration expenses. To date this is comprised of:
- Selective reduction of non-essential staff, consultants and services; and
- The return of unneeded leased or rented equipment.
4. A complete review, with the assistance of the Company's auditors, of the accounting practices and controls.
5. FirstEnergy Capital Corp. was retained by Merit as its financial advisor to assist in considering strategic alternatives to maximize shareholder value.
more extracts......
Management Changes
The Board of Directors is undertaking a thorough review of Merit's staff in light of the recent developments. Since the end of the second quarter Merit has appointed Lawrence Walter, CMA as Vice President and Chief Financial Officer and appointed Stephen Cochrane, C.A. as Controller as well as added both full-time and consulting support to strengthen its financial reporting system. The Board of Directors has accepted the resignation of Duncan Chisholm as President and Chief Executive Officer, appointed Barry Stobo, P.Eng. President and interim Chief Executive Officer, and continues to assess the need for further personnel changes.
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For further information: Barry Stobo, President and Interim Chief
Executive Officer or Lawrence F. Walter, Vice President and Chief Financial Officer, (403) 263-4899
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Interesting situation, especially the asset base that was assembled - over 25mil barrels of equivalent PROVED reserves (approx. 75% gas); 467K net acres of undeveloped land, 6800+ KM of seismic (2D & 3D), 400+ drillable prospects (88% development) and $200+mil. tax pools.
Some interesting days ahead?......... |
