HOT OFF THE PRESS: TIV Year-End 2010 Equity to Exceed Required Minimum for Continued Listing on NYSE Amex
Retains Investment Banking Firm for Potential OPUS Partnership Transaction
Reduction in Force and Other Measures Expected to Result in Approximately $1 Million in Annual Cost Savings
Financial Flexibility Achieved from Recently Completed Warrant Exchanges
BAKERSFIELD, Calif. --(BUSINESS WIRE)-- Tri-Valley Corporation (NYSE Amex: TIV) today reported significant progress on a number of important corporate initiatives designed to streamline operations, reduce costs, dispose of non-core assets, and regain compliance with minimum continued listing standards of the NYSE Amex, LLC exchange. Additionally, the Company has retained the investment banking firm C. K. Cooper & Company of Irvine, California , to provide financial advisory services related to financing the development of the Pleasant Valley Oil Sands Project jointly owned by the Company and its TVC OPUS 1 Drilling Program, L.P. This followed the meeting of the OPUS Advisory Committee held on December 15-16, 2010 , to review a recommended path forward for the OPUS partnership. The Company expects to present a formal recommendation to partners later this month.
Tri-Valley also reported that it expects to reduce general and administrative costs by approximately $1 million on an annualized basis following the recent elimination of five positions primarily at its headquarters office, outsourcing of the Information Technology function, and reductions in contract services for other activities. Included among the positions eliminated was the president of Select Resources Corporation, Inc. , Tri-Valley's mineral subsidiary, following the sale of the Admiral Calder calcium carbonate property last month. The Company also merged three inactive subsidiaries, Great Valley Production Services, LLC ; Great Valley Drilling Company, LLC ; and Tri-Valley Power Corporation into Tri-Valley Corporation at the end of 2010 to eliminate costs associated with maintaining those inactive entities.
During the fourth quarter 2010, Tri-Valley significantly strengthened its capital structure with the $2.5 million sale of the Admiral Calder property in Alaska , issuance of additional preferred stock in exchange for obligations of $835,000 related to Great Valley Production Services, and $575,000 in net proceeds ( $606,000 gross) from the sale of common stock under the existing shelf registration. As a result of these achievements, the Company expects to report shareholders' equity at December 31, 2010 in excess of the $6 million minimum equity required for continued listing on the NYSE Amex, LLC exchange.
With the recently announced cancellation of all the outstanding Series A and B warrants and relinquishment of all remaining rights for investors under the April 6, 2010 stock purchase agreement, Tri-Valley has enhanced its attractiveness as an investment to potential investors and significantly increased its flexibility to pursue a range of financing options to fund its growth initiatives.
"We made good progress on our corporate initiatives during 2010 and enter 2011 well positioned to drive improved revenue growth and cash generation," said Maston N. Cunningham , President and CEO of Tri-Valley . "For 2011, we are focused on increasing the production from our oil and gas assets. At the Pleasant Valley project, we are working aggressively to implement the SAGD pilot program so that production from the pilot wells can be initiated in the summer of 2011. SAGD appears to be very promising technology that will allow us to substantially increase the oil production and ultimate recovery of oil sand reserves at the site. We are also working with the OPUS partnership, which holds a majority interest in the Pleasant Valley project, to better align their interests with those of Tri-Valley's shareholders. We have made substantial progress and believe agreement will be reached on next steps towards development over the next several months. At the Claflin project near Bakersfield, California , we are working on financing alternatives to drill up to 22 wells in 2011."
"As previously reported, we are seeking a strong operational and financial partner to help us develop and monetize our potentially large porphyry copper, gold, and molybdenum deposits on our Shorty Creek prospect in Alaska . There has been strong interest already expressed from several potential partners who are well qualified and are reviewing the data package. We are optimistic that we will be able to come to an agreement during the year," Mr. Cunningham continued.
"Finally, we have taken the steps necessary to become a more efficient, cost-effective operation. We expect to leverage this effort, driving increased revenue, to generate cash from operations by the end of the year. We believe these initiatives should result in enhanced valuation for our shareholders," concluded Mr. Cunningham.
