July 7, 2016 - 12:00 PM EDT
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PETROSHARE CORP. FILES (8-K) Disclosing Completion of Acquisition or Disposition of Assets, Regulation FD Disclosure

Item 2.01             Completion of Acquisition of Disposition of Assets.
As previously disclosed in its Current Report on Form 8-K dated May 27, 2016,
PetroShare Corp. (the "Company") entered into a purchase and sale agreement on
May 27, 2016 ("Agreement") with PDC Energy, Inc., a Delaware corporation
("PDC"). On June 30, 2016, the Company completed the acquisition of certain oil
and gas assets from PDC. The assets include leases covering approximately 3,718
gross (2,690 net) acres of lands located in Adams County, Colorado. All of the
acreage is currently held by production. The Company also acquired PDC's
interest in approximately 72 wells located on the acreage, which includes those
wells currently producing, permitted, proposed, and/or shut-in. As of the date
of closing, the wells, all of which were producing from vertical wellbores, were
producing approximately 125 barrels of oil equivalent per day ("BOE/D"), 62.5
BOE/D net to the Company's retained interest.
Simultaneous with the closing of the acquisition, Providence Energy Operators,
LLC, a Delaware limited liability company based in Texas ("Providence"), which
is the Company's lender and owner of 13.8% of the Company's common stock,
exercised its option under a participation agreement with the Company and
acquired 50% of the Company's interest in the PDC assets. Much of the acreage
that the Company acquired from PDC is within the Company's Todd Creek Farms
prospect in Township 1 South, Range 67 West; the remainder of the acreage is
located in other parts of Adams County. The PDC asset acquisition is effective
April 1, 2016.
The original proposed purchase price for the assets set forth in the letter of
intent was $6 million, which was reduced to $5,154,630 in the Agreement due to
an allowance negotiated by the Company for potential well and well site
remediation. The purchase price was further reduced at the closing to $4,611,833
due to a holdback allowance associated with title defects, which the seller has
the right to cure within 60 days following closing. Consequently, on June 30,
2016, the Company paid a total of $4,611,833 for the assets, which included an
earnest money deposit of $515,463 that the Company paid on May 27, 2016. The
purchase price may be adjusted upwards up to $5,154,630, if the seller completes
certain title curative actions. The purchase price was paid using a combination
of working capital and a $2.6 million draw on the Company's line of credit with
Providence. Pursuant to the Agreement, the parties indemnified each other
against certain liabilities, including liabilities related to ownership and
operation of the assets. Following closing, Providence paid its pro rata share
of the purchase price of the PDC assets to the Company pursuant to its option
The foregoing description of the Agreement does not purport to be complete and
is qualified in its entirety by reference to the Agreement, which was filed as
Exhibit 10.1 to the Company's Current Report on Form 8-K, dated May 27, 2016.
Item 5.02             Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
On July 5, 2016, the Board of Directors of the Company expanded its membership
from five to six members and appointed Douglas R. Harris to fill the vacancy
created by the increase. Mr. Harris will serve in that position until the next
annual meeting of the Company's shareholders and until his successor is elected
and qualified, or until he is removed.
Mr. Harris has over 38 years of experience in the oil and gas industry. Most
recently, he is the founder and chief operating officer of Axia Energy II, LLC,
a privately-held Delaware limited liability company. Axia II, organized in March
2015, seeks to identify and develop oil and gas prospects throughout the United
States. From August 2009 to 2015, Mr. Harris served as co-founder and chief
operating officer of Axia Energy, LLC, also a privately-held Delaware limited
liability company. Prior to that, he served as the co-founder and vice president
of operations for Orion Energy Partners, Inc., a privately-held Delaware
corporation, a position that he held from 2004 to 2009, and the vice president
and general manager of the Denver Division of Tom Brown Inc., also a
privately-held Delaware corporation, a position that he held from February 2001
to 2004. From 1986 until 2001, Mr. Harris served in numerous positions for
Burlington Resources Inc., culminating as the vice president of production
operations in its Calgary, Alberta offices. He serves on the board of directors
of a number of privately-held companies. Mr. Harris holds a BS in Civil
Engineering from New Mexico State University.
In connection with his appointment to the Board, Mr. Harris was granted 25,000
shares of the Company's common stock and options to purchase an additional
25,000 shares of stock, which options are exercisable at a price of $1.60 per
share until December 2022. Mr. Harris will receive a quarterly director fee in
the amount of $3,000.


Item 7.01             Regulation FD Disclosure.
On July 6, 2016, the Company issued a press release announcing the acquisition
of the assets from PDC. A copy of the press release is attached to this report
as Exhibit 99.1.
The information furnished under this Item 7.01, including the exhibit, shall not
be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933, except as shall be expressly set forth by reference to
such filing.
Item 9.01             Financial Statements and Exhibits.
 (a)      Financial Statements of Businesses Acquired
The Company intends to amend this Current Report on Form 8-K to include the
financial statements required under Item 9.01(a) not later than September 16,
(b)      Pro Forma Financial Information
The Company undertakes to amend this Current Report on Form 8-K to include the
pro forma financial information required under Item 9.01(b) not later than
September 16, 2016.
(d)      Exhibits. The following exhibit is furnished with this report:
99.1      Press release dated July 6, 2016.
Caution Concerning Forward-Looking Statements

This report and the press release contain certain forward-looking statements and information, including "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements and information expressed, as of the date of this report, the Company's estimates, forecasts, projections, expectations or beliefs as to certain future events and results. These forward-looking statements include, among others, statements regarding the benefits that the Company expects from proposed or completed transactions and plans and objectives of management for future operations. Forward-looking statements and information are necessarily based on a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, technical, economic and competitive uncertainties, risks and contingencies, and there can be no assurance that such statements and information will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements and information.

Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements and information include, but are not limited to, risks related to receipt of working capital, the level of success in exploration, development and production activities, possible defects in title to properties, the ability to negotiate acceptable surface-use agreements with landowners, fluctuations in the market price of precious crude oil and natural gas, industry risks, possible federal and/or state initiatives related to regulation of hydraulic fracturing, risks related to permitting and the projected timeframes to receive the necessary permits, environmental risks and hazards, uncertainty as to calculation of crude oil and natural gas resources and reserves and other risks described in the Company's report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission. Readers should not place undue reliance on forward-looking statements or information included herein, which speak only as of the date hereof. The Company undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law.

All forward-looking statements and information made in this report and the press release are qualified by this cautionary statement.



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Source: Equities.com News (July 7, 2016 - 12:00 PM EDT)

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