Hunter Oil Corp., Houston, has agreed to sell substantially all of its oil and gas operations to Pacific Energy Development Corp., a Nevada corporation and a wholly owned subsidiary of Pedevco Corp., Danville, Calif., for a rounded aggregate purchase price of $21.35 million.
The transaction is structured as a sale of assets of the company’s holding companies—Milnesand Minerals Inc. and Chaveroo Minerals Inc.—and a sale of shares of the company’s operating companies Ridgeway Arizona Oil Corp. and EOR Operating Co. (OGJ Online, June 12, 2018).
According to Pedevco, the deal includes 23,000 net leasehold acres, all operated production, and all related existing infrastructure in the San Andres play in the Permian basin.
Hunter Oil intends to distribute $1.25/share after payment of liabilities and obligations to shareholders following the deal’s close, saying the deal provides shareholders with “a significant premium to the present market valuation,” and avoids the “substantial dilution” associated with raising the $20-30 million it estimated initial field development would require. The distribution provides shareholders with a cash distribution, while allowing them to retain their shares.
Upon completion, Hunter Oil will have no active business operations or assets other than cash. After distributions, the company “plans to seek to locate, evaluate and where advisable negotiate to acquire interests in additional oil and gas properties,” but says there is no guarantee it will be able to do so.