Jones Energy Inc., Austin, is “exploring strategic alternatives” with financial advisers after gaining flexibility from lenders on its revolving credit during regularly scheduled redetermination of its borrowing base.
Alternatives under consideration include formation of drilling joint ventures to continue development of properties in the western Anadarko basin of Oklahoma and Texas.
The company last year acquired 18,000 net acres in the Merge area of the STACK and SCOOP plays of Oklahoma from Scoop Energy Co. LLC for $136.5 million, increasing its existing leasehold in Oklahoma and the Texas Panhandle (OGJ Online, Sept. 28, 2016).
Jones Energy’s third-quarter earnings report warned of a possible breach at yearend of financial ratios in revolving-credit covenants. The company reported a third-quarter net loss of $66.772 million, compared with a net loss of $10.618 million in the same quarter a year earlier.
Adjustment of the lending agreements, said Johnny Jones, the company’s founder, chairman, and chief executive officer, “gives us the flexibility to increase our Merge activity in 2018 and beyond.”
In a separate press statement he said, “We believe it is prudent to explore additional opportunities to strengthen our balance sheet, secure additional capital, and improve the company’s financial flexibility.”
The statement said Jones Energy is working with Credit Suisse “to evaluate strategic and financial alternatives and to assist the company in determining the most appropriate course to deliver shareholder value.” Tudor Pickering, Holt & Co. is helping the company evaluate potential drilling joint ventures.