Feb 8--25. GMXR PRs addressed the equity cash flwo problems then hired Jefferies. In the SEC filing triggering events included defualt of all debt interests and pref divi. Big warning signs, pps between $2 to $3.5.
March 11. Chatham filed form 13-D to increase common share holding from 6.82% to 20% as major holder. The March 11 account of commons are: Chatham has 19% =1.4M shares; GSO/Blackstone has 64% = 5.06M shares. the total was 7.7M common shares issued.
****In a 13D filing Chatham Asset Management said; "GMX Resources announced its current liquidity and cash needs. As a result of this announcement, Chatham Asset Management has engaged in preliminary discussions with GMX Resources any potential transactions that may be deemed to have the purpose or effect of changing or influencing control of the GMX Resources."
April 1. Chapter-11 filed in court. Case # 13-11456, inidcated GMXR has $458M debts (2015, 2017, 2018 & 2019 notes), 2.04M pref shares and 31.28M commons issued , as of March 29, 2013.
The increase of 23.5M shares of common between March 11 and March 29, to WHO??? Chatham ?? GSO/Blackstone ? Or someones else. The pps range in that period was $2.5 to $3.5. Why would the deep pockets buy so much commons knowing Ch-11 is coming?
Then it came the Chapter-11 protect GMXR from paying any interests and divi, and $50M DIP loan. Drag the creditors meeting to May 2013.
BIG, big mystry..........
going back to the april1 filing i find this statement most informative.
" The Company has been unsuccessful in finding any viable funding solution to meet its long-term liquidity needs.
"LONG-Term LIquidity needs." this is like 3-7 years or more down the road. (long term)
Based on discussions with the Company’s various creditor groups and advice from the Company advisors,
(gmxr sought out gso/blkstone / chatham thru jefferies ) to seek a solution for LONG Term Liquidity Needs......
legal protection to reorganize for (long term liquidity needs)
once in chap 11 there would be no basis for law suits upon any chosen formality & reorg positions when chap11 is dissovled and Gmxr re -emerges
23.5 million common was issued to & held by the company. (as planned) before entering chapter11
this ensures they hold control over the company once gmxr re-emerges.
chap11 provides the Company the ability to meet its immediate financial needs
to preserve the value of assets and to provide for the greatest recovery to its stakeholders in case
chap 11 is converted to chap 7.
we entered chap11 for a long-term liquidity solution...period with partners to boot.
do not sell your shares this is well worth holding to zero for.
enjoy your investments.
Smart & Lynch,
Let's do some thinking. The GMXR pre-pack BK is very unique, never seen anything like it.
GMXR total debts (includes 2015, 2017, 2018, 2019 notes and $25.5M bills, etc.) is $458M + $50M DIP loan. Pref shares are not consider debts since it has no mature date.
When the April 1 PR said GSO & other sr holders will PURCHASE all the assets from GMXR, it did not say any PRICE of the purchase (sale). This is a buyout from GMXR (includes ALL voters, i.e common holders), thus there has to be a price ($X) upon the sale. The sale may be in the form of 23.5M common shares issued to GSO/others + Chatham but they will pay for these common shares with the proceeds from the auctions.
Meanwhile filed Chapt-11 to stop all interest, bill and divi payments and assets claim law suits. GMXR will operate and drill under the DIP loan (revolving borrowings) to increase its EV as planned for 2013, which calls for $700M EV by Bakken/3-Fork alone by year end.
There is not any fixed dates for auctions, creditor 1st meeting is May 4, 2013. Assume the court will approve all petitions, then the auction may start in early fall. With further successful drillings, the market prices of both oil and NG leases will go up significantly (turn potential to proved status).
Assume the year end auctions bring in $700M (very low end estimate), before any debt is paid, the assets sale price $X must be paid to the common holders since GSO/others + Chamtham owe the assets sale price to GMXR owners (common holders, include GSO/others & Chamtham =31.5M shares).
Then GSO/others will collect their secured debts ($374M), then the bills, then the 2018 note holders, then the 2015 holders, then the prefs. This is how GSO/others & Chamtham got their azs covered from both cheeks.
The 2018, 2015 & pref holders may want to sue GSO big time, but they have no voting rights at present, nothing they can do to stop GSO & Chantham now.
In the same April 1 Chapter-11 filing,something about the DIP :
**** WHEREAS, the DIP Agreement provides the Company a senior secured super-priority
debtor-in-possession revolving credit facility that would permit borrowings of not less than $50
million outstanding at any one time (the "Financing"); and
WHEREAS, the Company, as borrower, desires to obtain the Financing to fund (a)
general working capital and operating costs and expenses (including, without limitation, the costs
of administering the Chapter 11 Cases of the Company and Subsidiaries) of the Company and
Subsidiaries, (b) severance and incentive payments to employees of the Company and
Subsidiaries, (c) fees of professional advisors to the Company and Subsidiaries, and (d) all fees
charged by the Agent and DIP Lenders (the "DIP Fees") in connection with the Financing,
subject to the all conditions set forth in the DIP Agreement, and subject to approval by the
bankruptcy court; *****
It's interesting to see NOT LESS THAN $50M at any one time, a revolving credit facility for multi-borrowings ?????
Also, to fund (a) general working capital ....., more drillings ?????
I watch the rig count daily on NDIC web site and will let this board know when GMXR moves a new rig into location. They had H&P rig #255, but gave that up just before BK. I suspect they will come back in with one of the larger walking (skid) rigs, as most of their new NDIC Dockets they recently filed call for 4 wells to be drilled at each location ~ each hole being about 50ft apart. A walking rig doing multiple wells from same pad area is much less expensive than trucking the rig piece-by-piece to a new location. The "back-yard" as it is called, (generators, fuel, supplies, etc) stay put during drilling of multiple wells. They also filed a docket for multiple stratigraphic production zones in one of their field. Prior to BK they reported better production by drilling side-by-side wells where fractures commute between fracked laterals, no dead end frac terminations, so there is flow-thru allowing better capture. The are using oil and mud mix now for drilling and say there is less damage to rock porosity compared to those drilled with water/mud mix. Their technical execution is 100% .... not a dry hole yet in the Bakken.