Credo Petroleum Corporation (Nasdaq:CRED), an
independent oil and gas company headquartered in Denver, Colorado,
with significant assets in the North Dakota Bakken and Three Forks,
Kansas, Nebraska, the Texas Panhandle and Oklahoma, announced today
that it has signed a memorandum of understanding to settle the
previously disclosed consolidated shareholder class action lawsuit
captioned In re Credo Petroleum Corporation Shareholder Litigation,
Consolidated C.A. No. 7641-VCP pending in the Delaware Court of
Chancery (the "Merger Litigation"). The Merger Litigation relates
to the Agreement and Plan of Merger, dated as of June 3, 2012, by
and among Forestar Group Inc. ("Forestar"),
Longhorn Acquisition Inc., a wholly owned subsidiary of
Forestar, and CREDO Petroleum Corporation ("CREDO").
CREDO agreed to the settlement solely to avoid the costs, risks
and uncertainties inherent in litigation, and without admitting any
liability or wrongdoing. CREDO denies all liability with
respect to the facts and claims alleged in the Merger Litigation
and specifically denies that any breach of fiduciary duty occurred,
or that any further disclosure is required to supplement the Proxy
Statement under any applicable rule, statute, regulation or
law.
The settlement provides, among other things, that the parties
will seek to enter into a stipulation of settlement which provides
for the conditional certification of the Merger Litigation as a non
opt-out class action pursuant to Court of Chancery Rule 23 on
behalf of a class consisting of all record and beneficial owners of
CREDO common stock during the period beginning on June 3, 2012,
through the date of the consummation of the proposed merger,
including any and all of their respective successors in interest,
predecessors, representatives, and the release of all asserted
claims. The asserted claims will not be released until such
stipulation of settlement is approved by the court. There can
be no assurance that the parties will ultimately enter into a
stipulation of settlement or that the court will approve such
settlement even if the parties were to enter into such
stipulation. The settlement will not affect the merger
consideration to be received by CREDO stockholders or the timing of
the special meeting of CREDO stockholders scheduled for
September 25, 2012.
Additionally, as part of the settlement, CREDO has agreed to
make certain additional disclosures related to the proposed merger,
which are set forth below. The additional disclosures
supplement the disclosure contained in the proxy statement filed by
CREDO with the Securities and Exchange Commission ("SEC") on
August 10, 2012 (the "Proxy Statement"), and should be read in
conjunction with the disclosures contained in the Proxy Statement,
which in turn should be read in its entirety. Nothing in this
press release or any stipulation of settlement shall be deemed an
admission of the legal necessity or materiality of any of the
disclosures set forth herein. Capitalized terms used herein,
but not otherwise defined, shall have the meanings ascribed to such
terms in the Proxy Statement.
The following disclosure replaces the first paragraph on page 25
of the Proxy Statement under the caption "Specific Transaction
Events":
On April 18, 2011, Mr. Huffman received an unsolicited telephone
call from Mr. Flavious Smith, Executive Vice President—Mineral
Resources of Forestar, inquiring as to whether the Company would be
interested in a strategic transaction with Forestar. Mr.
Huffman had a longstanding business relationship with Mr. Flavious
Smith dating back to the mid-1980s. Mr. Huffman had previously
been introduced to Mr. Flavious Smith by another employee of the
Company in the mid‑1980's prior to Mr. Flavious Smith's employment
with Forestar, and from time to time thereafter, Mr. Huffman and
Mr. Flavious Smith attended the same industry
conferences. Mr. Huffman and Mr. Flavious Smith did
not have substantive contact with one another until
Mr. Flavious Smith's call to Mr. Huffman on April 18,
2011. Mr. Huffman informed Mr. Flavious Smith that the Board
was open to considering strategic options that would create value
for its stockholders. Mr. Huffman subsequently informed Marlis
E. Smith, the Company's then Chief Executive Officer, of the
conversations with Mr. Flavious Smith and had telephone
conversations with other members of the Board regarding Forestar's
interest in the Company.
The following disclosure replaces the first paragraph on page 29
under the caption "Specific Transaction Events":
At an April 5, 2012 Board meeting in Denver, Messrs. DeCosmo and
Flavious Smith made a presentation about Forestar, including
operational information regarding a combination of Forestar and the
Company. Forestar's verbal indication of price at that time
was $14.50 per share, subject to due diligence, in a 50% cash and
50% stock transaction. Forestar also presented a 60-day
exclusivity agreement covering a proposed period during which due
diligence would be conducted. Forestar indicated that given
the significant time and expense that it expected to expend in
conducting its due diligence review of the Company, that some
period of exclusivity was reasonable. After the
representatives of Forestar left the meeting, the Board authorized
Mr. Huffman to continue merger discussions with Forestar, to obtain
a formal indication of interest outlining Forestar's proposal, and
to enter into an exclusivity agreement for due diligence
purposes. The Board concluded that Forestar's stated reasons
for requesting some period of exclusivity were reasonable,
especially when taken together with the $14.50 indication of price
and the fact that there were no active discussions with other
potentially interested parties at such time. Mr. Huffman
indicated that he would attempt to negotiate a shorter exclusivity
period prior to executing any agreement with Forestar.
The following disclosure replaces the sixth paragraph on page 29
under the caption "Specific Transaction Events":
Between April 12, 2012 and April 16, 2012, the Company received
revised indication of interest letters executed by Forestar
proposing the same transaction consideration and acknowledging the
Company's request, given the proposed issuance of Forestar stock to
the Company's stockholders, for Forestar to appoint one member of
the Company's Board to Forestar's board of directors following
consummation of the proposed transaction. Once subsequent
negotiations between the parties resulted in modifying the proposed
transaction consideration to cash only, there were no additional
discussions regarding the appointment of a Company director to
Forestar's board of directors. No provisions providing for any
such appointment were included in the Merger Agreement nor is there
any other agreement or understanding between the parties relating
to the appointment of any member of the Company's Board to
Forestar's board of directors.
The following disclosure replaces the first paragraph on page 35
under the caption "Financial Forecasts":
During the course of the discussions that led to the issuance of
the fairness opinions discussed under ''—Opinion of Northland
Capital Markets to the Company's Board of Directors'' and
''—Opinion of Houlihan Lokey Financial Advisors, Inc. to the
Company's Board of Directors'', the Company's management provided
certain unaudited prospective financial information regarding the
Company's future performance that was not publicly
available. The information provided included management's
projections of the financial performance for the Company for the
remaining portion of fiscal year ending October 31, 2012 (without
regard to the impact on the Company of the Merger). These
projections only cover fiscal year 2012 because, consistent with
past practice, the Company did not prepare such projections for
periods beyond fiscal 2012. The Company prepared partial
estimates of cash flows for 2013 which did not include any
projections for wells to be drilled in 2013 or estimates of the
revenues or expenses expected to be paid or received on those
wells. As of October 18, 2011, the Company estimated cash
flows for 2012 to be ($10,887,000) and estimated partial cash flows
for 2013, which did not take into consideration wells expected to
be drilled in 2013 and the net cash flow related to those wells, to
be $15,406,000. These 2013 estimates were not provided to, and
not utilized by, Northland Capital or Houlihan Lokey in conducting
their analysis of the Merger, were not provided to Forestar
or any potential buyers of the Company, and were not
considered by the Board in its evaluation of the
Merger. These estimated cash flows for 2012
and partial estimated cash flows for 2013 were provided
to the Board as part of the Board materials considered at the
October 27, 2011 board meeting. It is the Company's
standard business practice not to prepare longer term projections
because of the volatility of oil and natural gas prices, the
difficulty of predicting and estimating such prices for future
periods, and the difficulty in estimating the success or failure of
certain drilling projects. In addition, for non-operated
wells, it is difficult for the Company to estimate when wells will
be drilled and completed, the cost of the wells and the timing of
drilling and completion activities. The Company believes that
given the nature of these uncertainties, making such projections
beyond the current fiscal year are inherently imprecise.
The following disclosure was added as a new paragraph below the
last paragraph on page 38 under the caption "Overview":
The Company engaged Northland Capital Markets primarily because
of Northland Capital Markets' oil and gas expertise and familiarity
with the Company's assets and operations. The Company engaged
Houlihan Lokey primarily because of Houlihan Lokey's extensive
experience in analyzing the financial fairness of a transaction and
its strong reputation for valuation analysis. In consultation
with the Company's outside legal counsel, management and members of
the Board concluded that obtaining fairness opinions from two
different firms with varying expertise and experience would provide
the Company and its stockholders with a more comprehensive analysis
of the transaction and the fairness, from a financial point of
view, of the merger consideration offered by Forestar.
About Credo Petroleum
Credo Petroleum Corporation is an independent oil and gas
exploration, development and production company based in Denver,
Colorado. The Company has significant operations in the
Williston Basin of North Dakota, Kansas, Nebraska, the Anadarko
Basin of the Texas Panhandle and northwest Oklahoma, and in
southern Oklahoma. Credo uses advanced technologies to
systematically explore for oil and gas and, through its patented
Calliope Gas Recovery System, to recover additional reserves from
largely depleted gas reservoirs. For more information, please
visit our website at www.credopetroleum.com or contact us at
303-297-2200.
Safe Harbor for Forward-Looking Statements
Statements made in this press release that are not historical in
nature constitute forward-looking statements within the meaning of
the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995. The Company cannot assure you that the
future results expressed or implied by the forward-looking
statements will be achieved. Such statements are based on the
current expectations and beliefs of the management of the Company
and are subject to a number of risks and uncertainties that could
cause actual results to differ materially from the future results
expressed or implied by such forward-looking statements. These
risks and uncertainties include, but are not limited to, the
occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement; the inability
to obtain the Company's stockholder approval; or the failure to
satisfy other conditions to completion of the merger. The
Company's business could be materially adversely affected and the
trading price of the Company's common stock could decline if these
risks and uncertainties develop into actual events. The
Company cautions you not to place undue reliance on these
forward-looking statements, which speak only as of their respective
dates. The Company undertakes no obligation to publicly update
or revise forward-looking statements to reflect events or
circumstances after the date of this press release or to reflect
the occurrence of unanticipated events. A more detailed
discussion of factors that may affect the Company's business and
future financial results is included in the Company's filings with
the Securities and Exchange Commission (the "SEC"), including, but
not limited to, those described in "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's Annual Report on Form 10-K for the
year ended October 31, 2011.
CONTACT: Michael D. Davis
Chief Executive Officer (Interim)
or
Brian C. Mazeski
Chief Accounting Officer
303-297-2200
Website: www.credopetroleum.com
iShares Trust (NASDAQ:CRED)
Historical Stock Chart
From Aug 2024 to Sep 2024
iShares Trust (NASDAQ:CRED)
Historical Stock Chart
From Sep 2023 to Sep 2024