GMX RESOURCES INC. Announces Results of August 28th Auction
August 28 2013 - 3:33PM
GMX RESOURCES INC., (OTC
Markets
:GMXRQ)
("GMXR" or the
"Company"), is an oil and gas exploration and production
Company with assets in the Williston Basin, Denver Julesburg ("DJ")
Basin and East Texas Basin.
As previously reported, on April 1, 2013, the Company filed a
voluntary petition (In re: GMX Resources Inc., Debtor, Case No.
13-11456) for reorganization under chapter 11 of title 11 of the
U.S. Code (the "Bankruptcy Code") in the Bankruptcy Court for the
Western District of Oklahoma (the "Bankruptcy Court"). Two of the
Company's subsidiaries, Diamond Blue Drilling Co. and Endeavor
Pipeline Inc. (collectively with the Company, the "Debtors"), also
filed related petitions with the Bankruptcy Court (Case Nos.
13-11457 and 13-11458, respectively). The Company's petition and
its subsidiaries' petitions are referred to herein collectively as
the "Bankruptcy Case."
Auction Results on August 28, 2013
The Company announces today that an auction of substantially all
of the assets of the Company and its wholly owned subsidiaries was
conducted on August 28, 2013 in accordance with the June 11, 2013
Order of the Bankruptcy Court (the "Order"), and that the winning
bid at the auction was the $338 million "Credit Bid Amount"
(described further and defined below) made pursuant to the Asset
Purchase Agreement dated as of May 15, 2013 (the "Asset Purchase
Agreement"), among GMXR Acquisition LLC (the "Purchaser"), GMX
Resources Inc., each of the Company's subsidiaries listed on the
signature pages thereto (together with the Company, each a "Seller"
and collectively the "Sellers") and U.S. Bank National Association,
exclusively in its capacity as Trustee and Collateral Agent (the
"Trustee") for the holders of the Company's Senior Secured Notes
Series A due 2017 and Senior Secured Notes Series B due 2017 (the
"First Lien Lenders").
As set forth in the Order, the Bankruptcy Court will consider
approval of the sale of the Purchased Assets at the hearing
scheduled on September 10, 2013.
As previously disclosed, the Asset Purchase Agreement provides
for the purchase of substantially all of the assets, properties,
rights and interests, tangible or intangible, of the Sellers'
business (free and clear of all liens, except Permitted Liens, as
defined therein) (the "Purchased Assets") and the assumption of
certain of the liabilities of the Sellers by the Purchaser,
pursuant to sections 363 and 365 of the Bankruptcy Code. The
purchase price under the Asset Purchase Agreement is $338 million
(which amount shall be payable in the form of a credit bid of the
Company's obligations owed to the First Lien Lenders, subject to
adjustment pursuant to the Asset Purchase Agreement (the "Credit
Bid Amount")), together with the assumption of the Assumed
Liabilities (as defined therein). There will be no adjustments to
the purchase price due to any title defects or environmental
defects of the Purchased Assets. The Asset Purchase Agreement
contains customary representations and warranties of the Sellers
and the Purchaser, and certain pre-closing covenants including
cooperation, access to records, notification of certain matters and
conduct of business. The Asset Purchase Agreement is subject to
customary conditions precedent to closing, including the approval
by the Bankruptcy Court.
On June 11, 2013, the Bankruptcy Court approved the Order (a)
establishing bidding procedures in connection with the sale of
substantially all of the Debtors' assets, (b) approving the form
and manner of notices related to the asset sale, (c) scheduling
dates for an auction and sale hearing, (d) authorizing and
approving the form of a Stalking Horse Asset Purchase Agreement,
(e) approving procedures to determine cure amounts related to the
assumption and assignment of certain executory contracts, (f)
approving the sale of the assets free and clear of all liens,
claims, encumbrances to the winning bidder and (g) authorizing the
assumption and assignment of certain executory contracts and
unexpired leases of the Debtors.
The Order set a deadline (the "Bid Deadline") to submit bids for
the Debtors' assets at August 21, 2013 at 12:00 p.m. central time.
If at least one Qualifying Bid (as determined by the Debtors and
their advisors, in consultation with the Backstop Lenders, the
Steering Committee and the Creditors' Committee, as such terms are
defined in the Order) for the purchase of the Debtors' assets was
received before the Bid Deadline, then the Order provided that an
auction would be conducted on August 28, 2013 at 10:00 a.m. central
time in accordance with the bidding procedures pursuant to the
Order. The Order also set the date for the sale hearing for the
Bankruptcy Court to consider approval of the sale of the Purchased
Assets (defined below) at September 10, 2013 at 1:30 p.m. central
time.
GMXR is an exploration and production
company. The company is currently developing its Bakken and Three
Forks oil shale resources located in the Williston Basin, North
Dakota. GMXR's large natural gas resources are located in the East
Texas Basin, primarily in the Haynesville/Bossier gas shale and the
Cotton Valley Sand Formation; where the majority of GMXR's acreage
is contiguous, with infrastructure in place and substantially all
held by production.
This press release includes certain statements that may be
deemed to be "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, included in this press release
that address activities, events or developments that GMXR expects,
believes or anticipates will or may occur in the future are
forward-looking statements. These statements include management's
expectations and desire to address GMXR's financial challenges,
preserve the value of assets and address important issues in an
orderly way. These statements are based on certain assumptions and
analysis made by GMXR in light of its experience and perception of
historical trends, current conditions, expected future
developments, and other factors it believes appropriate in the
circumstances, including the assumption that there will be no
material change in the operating environment for GMXR's properties.
Such statements are subject to a number of risks, including but not
limited to: (i) the ability of GMXR to obtain Bankruptcy Court
approval with respect to the Asset Purchase Agreement or other
motions in the Chapter 11 case; (ii) the ability of GMXR to
consummate the contemplated sale of its assets pursuant to the
Asset Purchase Agreement; (iii) the effects of the bankruptcy
filing on GMXR and interests of various creditors, equity holders
and other stakeholders; (iv) the effects of the bankruptcy filing
on GMXR's liquidity or results of operations; (v) Bankruptcy Court
rulings in the Chapter 11 cases and the general outcome of the
cases; (vi) the length of time GMXR and its subsidiaries will
operate under the Chapter 11 cases, and the length of time of its
asset sale process; (vii) risks associated with potential
third-party motions in the Chapter 11 cases, which may interfere
with GMXR's ability to achieve its Chapter 11 goals; (viii) GMXR's
ability to execute its business or restructuring plans; (ix)
increased costs related to GMXR's bankruptcy filing and other
litigation; and (x) the ability of GMXR to maintain contracts that
are critical to its operation, including to obtain and maintain
normal terms with its vendors, customers, landlords and service
providers, and to retain key officers and employees. In the event
that the risks discussed above and disclosed in GMXR's public
filings cause results to differ materially from those expressed in
GMXR's forward-looking statements, GMXR's business, financial
condition, results of operations or liquidity, and the interests of
creditors, equity holders and other constituents, could be
materially adversely affected. GMXR undertakes no obligation (and
expressly disclaims any such obligation) to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise. For additional information
concerning factors that could cause actual results to materially
differ from those projected herein, please refer to GMXR's reports
filed with the Securities and Exchange Commission on Form 10-K and
10-Q.
CONTACT: Lauren Stone
Investor Relations Coordinator
405.254.5887