Tri-Valley Announces $5.0 Million Registered Direct Offering; Recent Asset Sale
April 06 2010 - 10:37AM
Business Wire
Tri-Valley Corporation (NYSE AMEX:TIV) announced today that it
executed a Securities Purchase Agreement on April 6, 2010, with a
group of institutional investors to purchase $5.0 million of its
common stock and warrants in a registered direct offering of
securities. Net proceeds from this offering will be used to drill a
horizontal injector well to evaluate Steam Assisted Gravity
Drainage (SAGD) at its Pleasant Valley heavy oil project at Oxnard,
California, for future use in the development and production of
heavy oil reserves. Tri-Valley will use the remaining proceeds for
start-up operations of existing wells and production facilities on
its Claflin property near Bakersfield, California, and for working
capital purposes.
Under the terms of the definitive agreements, the investors
purchased 3,846,154 shares of Tri-Valley's common stock at $1.30
per share, for a total of $5.0 million in gross proceeds, and
received warrants to purchase up to 2,307,692 shares (the
"Warrants") in the aggregate. The Warrants include Series A
Warrants to purchase up to 1,153,846 shares of common stock at
$1.50 per share for five years and Series B Warrants to purchase up
to 1,153,846 shares of common stock at $1.95 per share for seven
years. Subject to certain limitations, the Company may also be
obligated to issue to the investors a limited number of additional
shares pursuant to certain purchase price share adjustments on July
2, 2010 and December 1, 2010 that may occur dependent upon the then
current price of the Company’s common stock in relation to the
original issue price. All of such Warrants contain customary
adjustments for corporate events such as reorganizations, splits,
dividends, and the exercise prices of all such Warrants are subject
to anti-dilution adjustments in the event of additional issuances
of common stock below the exercise price then in effect.
The offering of the shares was made pursuant to a shelf
registration statement previously filed with the Securities and
Exchange Commission and declared effective by the SEC (file no.
333-163442) on March 16, 2010. Roth Capital Partners acted as
financial advisor to the Company in the transaction.
Recent Asset
Sale
Tri-Valley also announced that it has recently completed the
$700,000 cash sale of a surplus steam generator, with a rated
heating capacity of 50 million British thermal units per hour,
which had been refurbished by its Great Valley Production Services
subsidiary. In addition, Tri-Valley is negotiating the sale of its
South Belridge and Shields-Arms leases. Based on a multiple of
current annual net cash flow, the Company expects that the leases
could generate an aggregate sales price of between $2.5 and $4.0
million. However, the actual sales proceeds could vary due to a
number of contingencies including, but not limited to, changes in
oil and gas prices, future operating results or changes in reserve
estimates. The Company previously had identified these leases as
being considered for divestiture in its Annual Report on Form 10-K
for the year ended December 31, 2009.
About Tri-Valley
Tri-Valley Corporation explores for and produces oil and natural
gas in California, and has two exploration-stage gold properties
and a high grade calcium carbonate quarry in Alaska. Tri-Valley is
incorporated in Delaware and is publicly traded on the NYSE AMEX
exchange under the symbol "TIV." Our company website, which
includes all SEC filings, is www.tri-valleycorp.com.
Forward-looking
Statements
This press release contains forward-looking statements that
involve risks and uncertainties. Actual results, events and
performance could vary materially from those contemplated by these
forward-looking statements which includes such words and phrases as
exploratory, wildcat, prospect, speculates, unproved, prospective,
very large, expect, potential, etc. Among the factors that could
cause actual results, events and performance to differ materially
are risks and uncertainties discussed in "Item IA. Risk Factors"
and "Item 7. Management's Discussion and Analysis of Financial
Condition" contained in the company's Annual Report on Form 10-K
for the year ended December 31, 2009.
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