Worthington Settlement Reached on VM179 Includes Release of Claims
June 11 2014 - 11:20AM
Marketwired
Worthington Settlement Reached on VM179 Includes Release of Claims
SAN FRANCISCO, CA--(Marketwired - Jun 11, 2014) -
Worthington Energy, Inc. (OTC Pink: WGAS) (PINKSHEETS:
WGAS) ("Worthington" or the "Company"), an energy company
engaged in the acquisition, exploration, development and drilling
of oil and natural gas properties, today announces that the Company
has reached a settlement agreement with Montecito Offshore, LLC
("Montecito") of Louisiana, on the VM179 lease. As originally
announced on May 10, 2011, Paxton (Worthington) closed on the
agreement with Montecito on May 6, 2011, whereby Paxton
(Worthington) acquired a 70% working interest in 546.875 acres in
the Vermilion 179 (VM 179) track for $1,500,000 cash, a $500,000
subordinated note and the issuance of 15 million shares of Paxton
(Worthington) common stock.
Worthington Energy, Inc. Chairman and CEO, Mr. Charles F. Volk,
stated, "For the last year and a half the company has been
threatened with bankruptcy by the convertible debt holders, whereby
they could eliminate the second lien position held by Montecito on
the VM179 lease. The settlement reached by the company relieves
Worthington of any interest in the VM 179 lease in exchange for
release of claims and debts both from the Convertible debt holders
and Montecito."
"During that time, in order to satisfy our public company filing
requirements and remain a going concern, the company entered into
convertible debentures which have depressed the price of the
stock," Mr. Volk explained. "With the removal of the UCCs
associated with the VM179 debt, the company can now enter into
project financing loans on the recently acquired Kansas properties
in order to initiate and subsequently increase production."
Mr. Volk continued, "The VM179 convertible debt holders' ratchet
feature equated to a potential conversion into 70,000,000,000
common shares. This potential threat, which could have crippled the
company, is now eliminated! The VM179 asset was being carried on
our books at $5.7 million. As a result of this settlement the
company eliminated $9.5 million in associated liabilities and debt,
resulting in a $3.8 million improvement to the balance sheet."
"Once production has commenced, oil sales should allow the
Company to avoid entering into new convertible debentures. In fact,
based on anticipated production, we expect to be able to buy back
existing convertible debentures and eventually initiate a common
stock buyback program," concluded Mr. Volk.
Worthington Energy President and COO, Mr. Charlie Adams, said,
"The current value of the company should be in the $10 to $20
million range, based on the valuation methodology of our
technology, before reporting production. The valuation should
increase to the $40 to $60 million range, again based on valuation
methodology of the technology, after reporting production has
begun."
About Worthington Worthington engages in the acquisition,
exploration, development and drilling of oil and natural gas
properties. Worthington is an energy turnaround company whose
strategy is to acquire cash flow producing properties with proved
and probable reserves, develop the fields by reworking existing
wells and drilling new wells. Worthington was founded in 2004 and
is based in San Francisco, CA. More information about Worthington
can be found on the company's website, www.Worthingtonnrg.com.
Safe Harbor Certain statements in this press release regarding
strategic plans, expectations and objectives for future operations
or results are "forward-looking statements" as defined by the
Securities Litigation Reform Act of 1995. All statements, other
than statements of historical facts, included in this press release
that address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future
are forward-looking statements. These forward-looking statements
are not guarantees of future performance and are subject to risks
and uncertainties that could cause actual results to differ
materially from the results contemplated by the forward-looking
statements, including the risks discussed in the Company's annual
report on Form 10-K and the Company's other filings with the
Securities and Exchange Commission. Factors that could cause
differences include, but are not limited to, history of losses;
speculative nature of oil and natural gas exploration, substantial
capital requirements and ability to access additional capital;
ability to meet the drilling schedule; changes in tax regulations
applicable to the oil and natural gas industry; results of
acquisitions; relationships with partners and service providers;
ability to acquire additional leasehold interests or other oil and
natural gas properties; defects in title to the Company's oil and
natural gas interests; ability to manage growth in the Company's
business; ability to control properties that the Company does not
operate; lack of diversification; competition in the oil and
natural gas industry; global financial conditions; oil and natural
gas realized prices; ability to market and distribute oil and
natural gas produced; seasonal weather conditions; government
regulation of the oil and natural gas industry, including potential
regulations affecting hydraulic fracturing and environmental
regulations such as climate change regulations; uninsured or
underinsured risks; and material weakness in internal accounting
controls. The forward-looking statements in this press release are
made as of the date of this press release, even if subsequently
made available by the Company on its website or otherwise. The
Company does not undertake any obligation to update the
forward-looking statements as a result of new information, future
events or otherwise.
Contact Surety Financial Group, LLC 410-833-0078