September 18, 2017 - 7:20 AM EDT
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Featured Company News - Elk Petroleum to Buy Aneth Field from Resolute Energy

Research Desk Line-up: Evolution Petroleum Post Earnings Coverage

LONDON, UK / ACCESSWIRE / September 18, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Resolute Energy Corp. (NYSE: REN) ("Resolute"), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=REN. The Company announced on September 14, 2017, that it has signed an agreement to sell its subsidiary holding 63% operating working interests in Aneth Field in the Paradox Basin of Southeastern Utah to an affiliate of Elk Petroleum Ltd ("Elk") for $195 million. As per the agreement, Resolute will receive cash consideration of $160 million at closing and additional cash consideration of up to $35 million if oil prices exceed certain levels in the next three years. For immediate access to our complimentary reports, including today's coverage, register for free now at:

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Discover more of our free reports coverage from other companies within the Independent Oil & Gas industry. Pro-TD has currently selected Evolution Petroleum Corporation (NYSE American: EPM) for due-diligence and potential coverage as the Company reported on September 06, 2017, its financial results for FY17 which ended on June 30, 2017. Tune in to our site to register for a free membership, and be among the early birds that get our report on Evolution Petroleum when we publish it.

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Terms of the Agreement

  • The transaction is expected to close in late October 2017, and is subject to customary covenants, closing conditions and purchase price adjustments.
  • Elk will fund a performance deposit of $10 million creditable against the purchase price.
  • Pursuant to additional contingent payment, Elk will pay Resolute $40,000 for each day in 12 months after closing that the WTI spot oil price exceeds $52.50 per barrel (up to $10 million).
  • It will pay $50,000 for each day in 12 months following the first anniversary of closing that the oil price exceeds $55.00 per barrel (up to $10 million) and $60,000 for each day in the twelve months following the second anniversary of closing that the oil price exceeds $60.00 per barrel (up to $15 million).

Acquisition Funding

Elk is likely to fund the acquisition via $22 million equity placement, $98 million senior debt, $55 million unlisted preferred equity issued by Elk Petroleum, Inc., a wholly-owned subsidiary of Elk.

Transaction to Improve Resolute's Cost Structure; Proceeds to Repay Outstanding Lease Operating Expense

Rick Betz, Chief Executive Officer of Resolute, stated that the sale of the subsidiary is the final step in the Company's previously announced strategy to transform Resolute into a pure-play Delaware Basin company. Closing this transaction will significantly improve Resolute's cost structure, strengthen its balance sheet and position the Company to accelerate the development of our prolific Delaware Basin property and continue its strong growth profile.

Rich further added that proceeds from the transaction are expected to repay the outstanding lease operating expense under the Company's revolving credit facility, which is currently estimated to be approximately $130 million to $135 million at September 30, and significantly reduce its year-end leverage ratio.

Aneth Oil Field Represents an Attractive Opportunity for Elk to Transform into ASX's Leading Oil Companies

Bradley Lingo, Elk Petroleum Managing Director, mentioned that Aneth Oil Field represents an attractive opportunity for Elk to transform into one of the ASX's leading oil companies and operators by reserves, production, and cash flow. Elk is excited by the opportunities for its expansion. Bradley added that he is highly confident that under Elk's management, alongside the Aneth team, the field can continue to go from strength to strength.

Financial Advisors

Petrie Partners, LLC and Barclays Capital Inc. provided financial assistance to Resolute. Resolute was represented by Arnold & Porter Kaye Scholer LLP. Elk received advised on the acquisition and the funding package by Miro Capital Pty Ltd and EAS Advisors LLC, acting through Odeon Capital Group, LLC.

About Resolute Energy Corporation

Founded in 2004, Resolute is an independent oil and gas company focused on developing its highly concentrated acreage position in the core of the Delaware Basin of the Permian Basin of west Texas. The Company is based in Denver, Colorado.

About Elk Petroleum Ltd

Based in Sydney, Australia, Elk Petroleum operates as an oil and gas development and production company in the United States.

About Aneth Oil Field

The Aneth Oil Field in Southeastern Utah is ranked the 86th largest oil field in the US by proven reserves and one of the largest CO2 EOR projects in the Rocky Mountains with a 30-year operating history.

Last Close Stock Review

On Friday, September 15, 2017, the stock closed the trading session at $30.11, rising 9.21% from its previous closing price of $27.57. A total volume of 1.83 million shares have exchanged hands, which was higher than the 3-month average volume of 770.54 thousand shares. Resolute Energy's stock price surged 10.78% in the last one month and 21.90% in the previous twelve months. The stock currently has a market cap of $619.66 million.

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Source: ACCESSWIRE Investor Awareness (September 18, 2017 - 7:20 AM EDT)

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