Maverick officially loses Fayetteville Shale gamble.
The Addison, Texas, company announced last week in an SEC filing that it has entered into a strict foreclosure agreement and has officially given up on its Fayetteville Shale properties. Arkansas Business reported Maverick's troubles last September, but the company has since given up on securing the additional funding it then said it needed to continue operating in Arkansas.
"Even though we have been able to successfully compromise significant financial obligations to the vendors and suppliers to our former Fayetteville Shale project, one of our former Fayetteville Shale partners, and to an existing claimant involving our former Fayetteville Shale project, our existing capital resources are not sufficient to maintain our operations and to pay our remaining liabilities generally as they become due," the filing said.
That includes not being able to fund outstanding payments to leaseholders in Arkansas, amounts required to "remediate existing well sites," and certain "severance and other employment-related obligations."
Maverick had sold off its operations at the Barnett Shale near Fort Worth to put all its eggs into one basket in 2005 by spending $16 million leasing some 125,000 acres in and around an area known as the Mississippi Embayment, about 25 miles east of the play's primary gas reserves. That area proved not to be profitable drilling territory, and the company essentially pulled out early last summer.
According to the SEC filing, Maverick accumulated nearly $33 million in losses to stockholders in 2006 and 2007, and as of Nov. 30, 2007, had run up a total deficit of more than $61 million.
"We have been unable to secure financial, operating or other developmental partners for our Fayetteville Shale project," the company said in the filing. "We have also been unable to secure additional funding for our operations. We have terminated all of our oil and gas personnel, and most of the balance of our administrative and executive personnel."
Maverick said the foreclosure transaction helped the company extinguish more than $28 million of senior secured indebtedness and helped the company retain a "modest amount of cash" that will help it "avoid, in the short term, an otherwise likely bankruptcy filing," according to the filing. Maverick will use its remaining cash assets to operate as an inactive company in the short term.
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|Date:||Jan 28, 2008|
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