OKLAHOMA CITY, Aug. 28, 2013 (GLOBE NEWSWIRE) -- GMX RESOURCES INC., (OTC Markets:GMXRQ) ("GMXR" or the "Company"), is an oil and gas exploration and production Company with assets in the Williston Basin, Denver Julesburg ("DJ") Basin and East Texas Basin.
As previously reported, on April 1, 2013, the Company filed a voluntary petition (In re: GMX Resources Inc., Debtor, Case No. 13-11456) for reorganization under chapter 11 of title 11 of the U.S. Code (the "Bankruptcy Code") in the Bankruptcy Court for the Western District of Oklahoma (the "Bankruptcy Court"). Two of the Company's subsidiaries, Diamond Blue Drilling Co. and Endeavor Pipeline Inc. (collectively with the Company, the "Debtors"), also filed related petitions with the Bankruptcy Court (Case Nos. 13-11457 and 13-11458, respectively). The Company's petition and its subsidiaries' petitions are referred to herein collectively as the "Bankruptcy Case."
Auction Results on August 28, 2013
The Company announces today that an auction of substantially all of the assets of the Company and its wholly owned subsidiaries was conducted on August 28, 2013 in accordance with the June 11, 2013 Order of the Bankruptcy Court (the "Order"), and that the winning bid at the auction was the $338 million "Credit Bid Amount" (described further and defined below) made pursuant to the Asset Purchase Agreement dated as of May 15, 2013 (the "Asset Purchase Agreement"), among GMXR Acquisition LLC (the "Purchaser"), GMX Resources Inc., each of the Company's subsidiaries listed on the signature pages thereto (together with the Company, each a "Seller" and collectively the "Sellers") and U.S. Bank National Association, exclusively in its capacity as Trustee and Collateral Agent (the "Trustee") for the holders of the Company's Senior Secured Notes Series A due 2017 and Senior Secured Notes Series B due 2017 (the "First Lien Lenders").
As set forth in the Order, the Bankruptcy Court will consider approval of the sale of the Purchased Assets at the hearing scheduled on September 10, 2013.
As previously disclosed, the Asset Purchase Agreement provides for the purchase of substantially all of the assets, properties, rights and interests, tangible or intangible, of the Sellers' business (free and clear of all liens, except Permitted Liens, as defined therein) (the "Purchased Assets") and the assumption of certain of the liabilities of the Sellers by the Purchaser, pursuant to sections 363 and 365 of the Bankruptcy Code. The purchase price under the Asset Purchase Agreement is $338 million (which amount shall be payable in the form of a credit bid of the Company's obligations owed to the First Lien Lenders, subject to adjustment pursuant to the Asset Purchase Agreement (the "Credit Bid Amount")), together with the assumption of the Assumed Liabilities (as defined therein). There will be no adjustments to the purchase price due to any title defects or environmental defects of the Purchased Assets. The Asset Purchase Agreement contains customary representations and warranties of the Sellers and the Purchaser, and certain pre-closing covenants including cooperation, access to records, notification of certain matters and conduct of business. The Asset Purchase Agreement is subject to customary conditions precedent to closing, including the approval by the Bankruptcy Court.
On June 11, 2013, the Bankruptcy Court approved the Order (a) establishing bidding procedures in connection with the sale of substantially all of the Debtors' assets, (b) approving the form and manner of notices related to the asset sale, (c) scheduling dates for an auction and sale hearing, (d) authorizing and approving the form of a Stalking Horse Asset Purchase Agreement, (e) approving procedures to determine cure amounts related to the assumption and assignment of certain executory contracts, (f) approving the sale of the assets free and clear of all liens, claims, encumbrances to the winning bidder and (g) authorizing the assumption and assignment of certain executory contracts and unexpired leases of the Debtors.
The Order set a deadline (the "Bid Deadline") to submit bids for the Debtors' assets at August 21, 2013 at 12:00 p.m. central time. If at least one Qualifying Bid (as determined by the Debtors and their advisors, in consultation with the Backstop Lenders, the Steering Committee and the Creditors' Committee, as such terms are defined in the Order) for the purchase of the Debtors' assets was received before the Bid Deadline, then the Order provided that an auction would be conducted on August 28, 2013 at 10:00 a.m. central time in accordance with the bidding procedures pursuant to the Order. The Order also set the date for the sale hearing for the Bankruptcy Court to consider approval of the sale of the Purchased Assets (defined below) at September 10, 2013 at 1:30 p.m. central time.
GMXR is an exploration and production company. The company is currently developing its Bakken and Three Forks oil shale resources located in the Williston Basin, North Dakota. GMXR's large natural gas resources are located in the East Texas Basin, primarily in the Haynesville/Bossier gas shale and the Cotton Valley Sand Formation; where the majority of GMXR's acreage is contiguous, with infrastructure in place and substantially all held by production.
This press release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that GMXR expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements include management's expectations and desire to address GMXR's financial challenges, preserve the value of assets and address important issues in an orderly way. These statements are based on certain assumptions and analysis made by GMXR in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes appropriate in the circumstances, including the assumption that there will be no material change in the operating environment for GMXR's properties. Such statements are subject to a number of risks, including but not limited to: (i) the ability of GMXR to obtain Bankruptcy Court approval with respect to the Asset Purchase Agreement or other motions in the Chapter 11 case; (ii) the ability of GMXR to consummate the contemplated sale of its assets pursuant to the Asset Purchase Agreement; (iii) the effects of the bankruptcy filing on GMXR and interests of various creditors, equity holders and other stakeholders; (iv) the effects of the bankruptcy filing on GMXR's liquidity or results of operations; (v) Bankruptcy Court rulings in the Chapter 11 cases and the general outcome of the cases; (vi) the length of time GMXR and its subsidiaries will operate under the Chapter 11 cases, and the length of time of its asset sale process; (vii) risks associated with potential third-party motions in the Chapter 11 cases, which may interfere with GMXR's ability to achieve its Chapter 11 goals; (viii) GMXR's ability to execute its business or restructuring plans; (ix) increased costs related to GMXR's bankruptcy filing and other litigation; and (x) the ability of GMXR to maintain contracts that are critical to its operation, including to obtain and maintain normal terms with its vendors, customers, landlords and service providers, and to retain key officers and employees. In the event that the risks discussed above and disclosed in GMXR's public filings cause results to differ materially from those expressed in GMXR's forward-looking statements, GMXR's business, financial condition, results of operations or liquidity, and the interests of creditors, equity holders and other constituents, could be materially adversely affected. GMXR undertakes no obligation (and expressly disclaims any such obligation) to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. For additional information concerning factors that could cause actual results to materially differ from those projected herein, please refer to GMXR's reports filed with the Securities and Exchange Commission on Form 10-K and 10-Q.
Lauren Stone Investor Relations Coordinator 405.254.5887
