LA JOLLA, Calif., Oct. 10, 2016 (GLOBE NEWSWIRE) -- PICO Holdings, Inc. (NASDAQ: PICO ) announced today that on October 7, 2016, its Mendell Energy group of companies closed on the sale of a majority of their oil and gas assets, consisting of certain oil and gas lease interests and producing wells in the Wattenberg Field, Colorado, for gross proceeds of $10.2 million. The effective date of the transaction was October 1, 2016. The purchase and sale agreement for these oil and gas assets provides for a Company guarantee to the buyer for $1 million for any indemnification claims made by the buyer within one year of the sale. In addition, there is an escrow holdback of approximately $587,000 for lease title defect issues that the Company has the right to cure within one year of the sale.
The sale transaction will be recorded in the Company’s consolidated statement of operations in the fourth quarter of 2016 which is estimated to result in a gain before income taxes of approximately $8.6 million.
PICO’s President and Chief Executive Officer, John Hart commented:
“Mendell Energy's management team has done an excellent job of maintaining and enhancing the value of our petroleum assets. They also conducted a robust auction and contract process, which allowed us to realize a positive outcome.”
About PICO Holdings, Inc.
PICO Holdings is a diversified holding company. Currently, we believe the highest potential return to shareholders is from a return of capital to shareholders. As we monetize assets, rather than reinvest the proceeds, we intend to return the capital derived therefrom, less any working capital requirements, back to shareholders through a stock repurchase program or by other means such as special dividends taking into effect liquidity requirements, debt covenants and any other contractual and legal restrictions that may exist at the time.
As of September 30, 2016, our two major investments were:
- Vidler Water Company, Inc., a water resource development business; and
- a 56.9% interest in UCP, Inc. (NYSE: UCP), a publicly-traded homebuilder and land developer in markets located in California, the Puget Sound area of Washington State, North Carolina, South Carolina and Tennessee.
OTHER INFORMATION
At September 30, 2016, PICO Holdings, Inc. had a market capitalization of $272 million, and 23,069,381 shares outstanding.
The PICO Holdings, Inc. logo is available at: http://www.globenewswire.com/newsroom/prs/?pkgid=5044
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this press release that are not historical, including statements regarding our business objectives, the gain to be realized as a result of the sale of the oil and gas assets, and our ability to monetize assets and return capital to shareholders through stock repurchases or through other means, are forward-looking statements based on current expectations and assumptions that are subject to risks and uncertainties.
In addition, a number of other factors may cause results to differ materially from our expectations, such as: any slow down or downturn in the housing recovery or in the real estate markets in which UCP and Vidler operate; fluctuations in the prices of water and water rights; physical, governmental and legal restrictions on water and water rights; a downturn in some sectors of the stock market; general economic conditions; prolonged weakness in the overall U.S. and global economies; the performance of the businesses; the continued service and availability of key management personnel; and potential capital requirements and financing alternatives.
For further information regarding risks and uncertainties associated with our business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of our SEC filings, including our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, copies of which may be obtained by contacting us at (858) 456-6022 or at http://investors.picoholdings.com .
We undertake no obligation to (and we expressly disclaim any obligation to) update our forward-looking statements, whether as a result of new information, subsequent events, or otherwise, in order to reflect any event or circumstance which may arise after the date of this press release, except as may otherwise be required by law. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
CONTACT: Financial Profiles, Inc. Jim Barry 310-478-2700 jbarry@finprofiles.com
