PED 1 year target was stated at $90.00/share last night.
PEDEVCO Provides Second Status Update Regarding Open Letter Delivered to Avalon Energy, LLC
6:00 am ET August 28, 2020 (Accesswire)
HOUSTON, TX / ACCESSWIRE / August 28, 2020 / On August 28, 2020, PEDEVCO Corp. (NYSE American:PED) ("PEDEVCO" or the "Company") issued a second status update regarding the open letter delivered by the Company to Avalon Energy, LLC ("Avalon") as a holder of common units of the SandRidge Permian Trust (NYSE:PER)(the "Trust"), the owner of working interests underlying the overriding royalty interests owned by the Trust, and the operator of the assets underlying the Trust, regarding PEDEVCO's previously delivered letter to Avalon indicating the Company's interest regarding a potential acquisition of all the common units of the Trust held by Avalon, the working interests underlying the overriding royalty interests owned by the Trust, and operatorship thereof.
On the evening of August 27, 2020, Avalon notified the Company that the Board of Managers of each of Avalon and its parent company Avalon Exploration and Production LLC ("Avalon E&P") had evaluated the Company's proposal set forth in the indication of interest and rejected it, noting that Avalon E&P and its subsidiaries, including Avalon Energy, had already entered into an agreement with Montare Resources I, LLC ("Montare") regarding Avalon's ownership of common units of the Trust (the "Trust Units"), 100% of the working interests underlying the overriding royalty interests owned by the Trust, and all other related assets used in connection with operating the underlying properties related thereto, as further described in Montare's August 27, 2020 release. Avalon also indicated that due to the exclusivity provisions of Avalon's agreement with Montare, Avalon will not entertain any further communications with PEDEVCO regarding the prior indication of interest or the proposal set forth therein.
Notwithstanding, Avalon's rejection, the Company continues to evaluate options for a potential acquisition of all the Trust Units held by Avalon (or subsequently acquired by Montare), the working interests underlying the overriding royalty interests owned by the Trust, and operatorship thereof. The Company is also considering, among other things, a possible public tender offer that would offer PEDEVCO's publicly-traded common stock in exchange for the Trust Units not held by Avalon, which would not require any approval or support from the Trustee, Avalon, or Montare to consummate.
It is important to note that as of the date of this filing, PEDEVCO has only delivered preliminary indications of interest to the Trustee, holders of Trust Units and Avalon requesting meaningful discussion with PEDEVCO regarding a potential acquisition of all the Trust Units, the working interests underlying the overriding royalty interests owned by the Trust, and operatorship thereof, as specifically detailed in prior announcements, and that as described above and in prior releases, to date no meaningful discussions regarding a potential transaction have taken place. PEDEVCO has not entered into any agreements (binding or otherwise) with any of the Trustee, Trust, holders of Trust Units, Avalon or Montare regarding the indication of interest or any transactions proposed therein, and there can be no assurances that any of these parties will be interested in pursuing any such transactions, that mutually agreeable terms can or will be agreed to, that any definitive agreements will be entered into, that any required conditions to closing the transactions contemplated by such definitive agreement will occur or that any such transactions will be consummated. We further note that any potential transaction between PEDEVCO, the Trust, the holders of Trust Units, Avalon and/or Montare, may be hindered by, or unable to proceed at all, due to, the Trustee's and Avalon's initial indication of their unwillingness to engage in any discussions with PEDEVCO, and Avalon's entry into an exclusive agreement with Montare that contemplates a similar transaction involving Avalon and/or the Trust in support of Montare's acquisition of the Trust, which could directly compete with, frustrate or end PEDEVCO's efforts to achieve the same result. There is a significant risk and a strong possibility that neither the Trustee nor Montare will enter into discussions with PEDEVCO, that the proposed transaction will never progress past the indication of interest phase, that no definitive agreements will ever be entered into between the parties, and PEDEVCO will never acquire the Trust or its assets.
AI
