African Discovery (PK) (USOTC:AFDG)
Historical Stock Chart
From Jul 2019 to Jul 2024
![Click Here for more African Discovery (PK) Charts. Click Here for more African Discovery (PK) Charts.](/p.php?pid=staticchart&s=NO%5EAFDG&p=8&t=15)
ABC Funding, Inc. ("ABC" or the "Company") (OTCBB:AFDG) announced today
that it closed its acquisition of all of the outstanding capital stock
of Voyager Gas Corporation (“Voyager”),
for cash consideration of $35.0 million plus 10,000 newly issued shares
of ABC’s Series D Preferred Stock, having an
agreed upon value of $7.0 million. Upon the effectiveness of an
amendment to the Company’s Certificate of
Incorporation increasing the number of shares of common stock that the
Company may issue, the Series D Preferred Stock will automatically
convert into 17.5 million shares of the Company’s
common stock. The amendment to the Company’s
Certificate of Incorporation will also change the name of the Company to
Cross Canyon Energy Corp.
Voyager’s natural gas and oil production is
located in Duval County, Texas. As of April 1, 2008, the acquired
properties had independently engineered proved reserves of 16.2 Bcfe. By
category, this includes 5.2 Bcfe of proved developed producing, 5.6 Bcfe
of proved developed non-producing, and 5.4 Bcfe of proved undeveloped
reserves. Approximately 69% of total proved reserves is natural gas. In
addition to proved reserves, ABC’s management
has identified net unrisked probable reserves of 7.4 Bcfe covering seven
drilling locations. ABC’s net capital
investment required to develop these probable reserves is estimated to
be $5.3 million. The acquired properties consist of approximately 14,300
net acres located in a prolific producing area. The purchase price also
included a proprietary 3-D seismic data base covering a majority of the
property.
Based upon total consideration of $42.0 million, the implied cost per
Mcfe of proved reserves is $2.59 and $1.78 per Mcfe if probable reserves
are included. ABC may allocate additional value to unproved properties
and other assets at a later date. The SEC net present value of proved
reserves (PV10) as of April 1, 2008 totaled $75.6 million, $122.9
million including probable reserves, as per the independent reserve
report.
The acquired properties are located in Duval County, South Texas, on
trend with several prolific producing Frio, Jackson and Yegua (Oligocene
and Eocene) fields. The acquired properties have established production
over a substantial acreage position with proved and probable reserves
from over ten different horizons located at depths ranging from 4,000 to
7,500 feet. ABC now has a multi-year inventory of projects in a key
domestic hydrocarbon producing basin.
ABC is the operator and owns an average 100% working interest in its
proved reserve base. Net daily production averaged over 3.0 Mmcfe for
the month of August 2008. Such sustainable production, coupled with the
Company’s scheduled active drilling program,
should result in significant production increases by mid 2009.
The Voyager acquisition was funded with proceeds from a new revolving
credit agreement (“Credit Agreement”)
and term loan agreement (“Loan Agreement”)
among the Company, CIT Capital USA Inc. (“CIT”),
as administrative agent, and such other banks and financial institutions
that may, from time to time, become parties thereto. At the closing, the
Company drew $11.5 million under the Credit Agreement and the full $22
million available under the Loan Agreement. Both the Credit Agreement
and the Loan Agreement are secured by all of the assets of the Company
and its subsidiaries. Additionally, the Company granted CIT a seven year
warrant to purchase up to 24.2 million shares of the Company’s
common stock at an exercise price of $0.35 per share.
The “New” ABC
Funding (Cross Canyon Energy Corp.):
Acquired properties generate significant sustainable cash flow in an
area which has an extensive production history and infrastructure,
Cross Canyon, owning a 100% working interest, has complete operational
control in the newly acquired properties,
Cross Canyon now has a multi-year, highly economic drilling inventory,
plus substantial upside potential from the probable and possible
locations,
Excellent low risk PDNP and PUD opportunities should meaningfully ramp
production and cash flow,
Deeper potential exists targeting high impact possible reserves,
Proved reserves total 16.2 Bcfe; proved plus probable reserves total
23.6 Bcfe, having an SEC PV10 value of $122.9 million (as of April 1,
2008),
Reserve base consists of 69% natural gas and 31% oil reserves, and
Experienced management, plus board and affiliates, own approximately
33% of currently outstanding common shares.
Robert P Munn, Chairman and Chief Executive Officer, stated, “The
acquisition of Voyager Gas Corporation is an important strategic step
with respect to the current and future growth of the company, and
provides us with a strong operating footprint in a very prolific basin
in South Texas. With the acquisition of these properties, Cross Canyon
Energy becomes a substantial independent oil and gas company, with the
ability to meaningfully grow our production and reserves through a
combination of low risk recompletions and workovers, plus the drilling
of undeveloped locations. Immediately, this transaction is highly
accretive to the company’s cash flow and
asset value in keeping with management’s
ongoing commitment to aggressively grow shareholder value.”
FORWARD-LOOKING STATEMENTS: This document includes forward-looking
statements. Forward-looking statements include, but are not limited to,
statements concerning estimates of expected drilling and development
wells and associated costs, statements relating to estimates of, and
increases in, production, cash flows and values, statements relating to
the continued advancement of the Company’s
projects and other statements which are not historical facts. When used
in this document, the words such as “could,”
“plan,” “estimate,”
“expect,” “intend,”
“may,” “potential,”
“should,” and
similar expressions are forward-looking statements. Although ABC
Funding, Inc. believes that its expectations reflected in these
forward-looking statements are reasonable, such statements involve risks
and uncertainties and no assurance can be given that actual results will
be consistent with these forward-looking statements. Important factors
that could cause actual results to differ from these forward-looking
statements include the potential that the Company’s
projects will experience technological and mechanical problems,
geological conditions in the reservoir may not result in commercial
levels of oil and gas production, changes in product prices and other
risks disclosed in the Company’s Annual
Report on Form 10-KSB filed with the U.S. Securities and Exchange
Commission.