Clayton Williams Energy, Inc. Announces Special Meeting of Limited Partners of Southwest Royalties Partnerships
January 17 2012 - 4:12PM
Business Wire
Clayton Williams Energy, Inc. (“CWEI”) (NASDAQ:CWEI) today
announced that its wholly owned subsidiary, Southwest Royalties,
Inc. (“SWR”), has called special meetings of limited partners of
each of the 24 limited partnerships for which SWR serves as the
general partner (the “SWR Partnerships”) at 10:00 a.m., local time,
on March 7, 2012. At the special meetings, limited partners of each
of the SWR Partnerships will be asked to approve, among other
things, agreements and plans of merger dated as of October 28,
2011, pursuant to which each SWR Partnership will merge into SWR,
with SWR being the surviving entity in the merger. Upon
consummation of the mergers, the limited partner interests in each
of the SWR Partnerships, other than those held by SWR, will be
converted into the right to receive cash. SWR will not receive any
cash payment for its partnership interests in the partnership.
However, as a result of the mergers, SWR will acquire 100% of the
assets and liabilities of the SWR partnerships. SWR has set the
close of business on January 12, 2012 as the record date for the
limited partners who are entitled to notice of, and to vote at, the
special meetings or any adjournments or postponements of the
special meetings.
Each of the mergers is subject to customary closing conditions,
including approval by the limited partners of each of the SWR
Partnerships. The merger consideration will be 100% cash and is
expected to be approximately $40.2 million in the aggregate
for all 24 SWR Partnerships.
Important information concerning the proposed mergers is
contained in proxy statements for each of the SWR Partnerships.
These proxy statements are first being mailed to the limited
partners of the SWR Partnerships on or about January 18, 2012.
Limited partners are urged to read the applicable proxy statement,
any related supplements and amendments, and all other related
materials carefully, because they contain (and will contain)
important information concerning the proposed mergers.
Substantially all of the SWR Partnerships’ properties are
located in the Permian Basin of West Texas and Southeastern New
Mexico where over 70% of CWEI’s oil and gas reserves are
concentrated. CWEI expects to obtain the funds to finance the
aggregate merger consideration by conveying a volumetric production
payment (“VPP”) on certain properties acquired in the proposed
mergers to a third party. The final terms of the VPP will not be
determined until immediately prior to the closing of the mergers.
The closing of the mergers is not conditioned on receiving proceeds
from the VPP or any other financing condition.
Clayton Williams Energy, Inc. is an independent energy company
located in Midland, Texas.
Communications in this press release do not constitute an offer
to buy any securities or a solicitation of any vote or approval.
SWR, in its capacity as general partner of the six SWR Partnerships
subject to the reporting requirements of the Securities and
Exchange Commission (the “Public Partnerships”), filed Definitive
Proxy Statements and Schedule 13E-3s for the Public Partnerships
with the SEC on January 17, 2012. CWEI, SWR or the Public
Partnerships may also file other documents concerning the proposed
mergers. WE URGE LIMITED PARTNERS OF THE PUBLIC PARTNERSHIPS TO
READ THE APPLICABLE DEFINITIVE PROXY STATEMENT AND SCHEDULE 13E-3,
ANY RELATED SUPPLEMENTS AND AMENDMENTS, AND ALL OTHER RELATED
MATERIALS CAREFULLY BECAUSE THEY CONTAIN (AND WILL CONTAIN)
IMPORTANT INFORMATION ABOUT THE PUBLIC PARTNERSHIPS AND THE
PROPOSED MERGERS. Limited partners of the Public Partnerships may
obtain free copies of the applicable Definitive Proxy Statement and
Schedule 13E-3 (and any other related materials when they become
available) as well as other filed documents containing information
about the Public Partnerships at http://www.sec.gov, the SEC’s free
internet site. Free copies of the Public Partnerships’ SEC filings,
including the applicable Definitive Proxy Statement and Schedule
13E-3, are also available by contacting SWR at 432-682-6324.
CWEI, SWR and their respective executive officers and directors
may be deemed, under SEC rules, to be participants in the
solicitation of proxies from the limited partners of the Public
Partnerships in connection with the proposed mergers. Information
regarding the officers and directors of CWEI and SWR is included in
the Definitive Proxy Statements for the Public Partnerships filed
with the SEC on January 17, 2012. The Definitive Proxy
Statements for the Public Partnerships also contain a description
of the parties to the proposed mergers and their direct or indirect
interests in the Public Partnerships.
This release contains 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. All statements, other
than statements of historical or current facts, that address
activities, events, outcomes and other matters that we plan,
expect, intend, assume, believe, budget, predict, forecast,
project, estimate or anticipate (and other similar expressions)
will, should or may occur in the future are forward-looking
statements. These forward-looking statements are based on
management’s current belief, based on currently available
information, as to the outcome and timing of future events. The
Company cautions that its future natural gas and liquids
production, revenues, cash flows, liquidity, plans for future
operations, expenses, outlook for oil and natural gas prices,
timing of capital expenditures and other forward-looking statements
are subject to all of the risks and uncertainties, many of which
are beyond our control, incident to the exploration for and
development, production and marketing of oil and gas.
These risks include, but are not limited to, the possibility of
unsuccessful exploration and development drilling activities, our
ability to replace and sustain production, commodity price
volatility, domestic and worldwide economic conditions, the
availability of capital on economic terms to fund our capital
expenditures and acquisitions, our level of indebtedness, the
impact of the current economic recession on our business
operations, financial condition and ability to raise capital,
declines in the value of our oil and gas properties resulting in a
decrease in our borrowing base under our credit facility and
impairments, the ability of financial counterparties to perform or
fulfill their obligations under existing agreements, the
uncertainty inherent in estimating proved oil and gas reserves and
in projecting future rates of production and timing of development
expenditures, drilling and other operating risks, lack of
availability of goods and services, regulatory and environmental
risks associated with drilling and production activities, the
adverse effects of changes in applicable tax, environmental and
other regulatory legislation, and other risks and uncertainties are
described in the Company's filings with the Securities and Exchange
Commission. The Company undertakes no obligation to publicly update
or revise any forward-looking statements.
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