Each one in plain English, with the numbers worked through for a shareholder.
20 Jan 2006material agreement▲ GoodMajor
On January 16, 2006, GMX and Penn Virginia Oil & Gas amended their East Texas participation agreement (Amendment No. 6) so PVOG can use four rigs instead of two, with one shared with GMX for its 100%-owned Area III. The same filing says the bank raised the borrowing base on the Hibernia facility from $17 million to $24 million, dropping $1.5 million each quarter from March 31, 2006. GMX also issued a press release on 2005 year-end reserves and production; the filing gives no figures.
12 Dec 2005asset acquisition disposition● NeutralMajor
On December 8, 2005, GMX set up a new subsidiary, Diamond Blue Drilling Co., and bought McLachlan Drilling Rig No. 5, which it had had under contract since April 2005. It gave McLachlan a $5.1 million note at 7% secured by the rig, ending the one-year drilling contract. GMX plans to use the rig on its 100%-owned East Texas acreage and expects owning a rig to lower drilling and completion costs. Hibernia agreed an interim amendment to the credit facility allowing the subsidiary, the purchase and up to $12 million of investment in it.
The compensation committee approved discretionary cash bonuses of $50,000 each to CEO Ken Kenworthy, Jr. and CFO Ken Kenworthy, Sr., paid half in Q4 2005 and half in Q1 2006. GMX also reported Q3 2005 results: net income of $2,050,332 versus $353,582 a year earlier, on revenue of $4,375,657 versus $1,828,246. The release attributes this to 51% higher production and 55% higher prices, and reports continued East Texas joint development with Penn Virginia.
On July 29, 2005, GMX signed a three-year secured revolving credit facility with Hibernia National Bank, with an initial borrowing base of $17 million, maturing July 29, 2008. It is secured by its oil and gas properties and by Endeavor Pipeline, Inc. stock and gathering system. The filing says GMX paid off its existing credit facility with the July private placement proceeds. The new loan will not be funded until needed, and it bars dividends and stock buybacks and limits a change in control.
18 July 2005capital raising announcement▲ GoodMajor
On July 14, 2005, GMX agreed to sell 1,600,000 new common shares at $13.50 each to institutional investors in a private placement, raising $21,600,000 before expenses. The money is intended for drilling and development of its East Texas properties, and GMX agreed to register the shares for resale. Existing shareholders are diluted by the new shares.
What it means for a shareholder
1.6m new shares at $13.50 to raise about $21.6m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
18 May 2005security holder rights change● NeutralMajor
Shareholders approved a rights plan (poison pill) on May 17, 2005, with UMB Bank as rights agent. Each common share gets a right that becomes exercisable if a person or group acquires 20% or more of the stock, letting other holders buy shares at half price. The rights expire June 1, 2015. CEO Ken Kenworthy, Jr. and his wife (about 20% owners) are not treated as an acquirer unless they exceed 30%. The filing says the plan has anti-takeover effects and the board can redeem the rights for $0.01 each.
On April 6, 2005, GMX signed an agreement with McLachlan Drilling Co. for a drilling rig in its East Texas properties; the terms are only in an attached press release not reproduced here. The filing also notes a release with estimated first-quarter 2005 production, without figures.
On March 2, 2005, GMX and Penn Virginia Oil & Gas L.P. (successor to PVOG) amended their East Texas agreement again so PVOG can use two rigs and GMX can use the second rig for its own account in Phase III, one well for one well. No second rig had been found yet. The filing also notes a press release on 2004 fourth-quarter and full-year results, whose figures are not in the filing text.
