Tandem Updates Financial Structure and Drilling Operations
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BusinessWire
09:00 a.m. 06/23/2005
MIDLAND, Texas, Jun 23, 2005 (BUSINESS WIRE) -- As previously announced, Tandem Energy Holdings Inc. (TDYH) (the "Company") purchased the stock of Tandem Energy Corporation and the assets of Shamrock Energy Corporation for approximately $46 million. Partial funding was provided by Guaranty Bank for $23 million together with $2 million cash from the Company. Notes for $21 million were issued to certain principals of Tandem Energy Corporation (TEC) and Shamrock Energy Corporation for the balance due. These notes, due September 1, 2005, allowed the Company additional time to pursue a suitable facility whereby the notes could be paid.
The Company is pleased to announce that a permanent solution to the subordinated portion of the financing has been offered and accepted by management. This will complete the transaction between the Company and TEC/Shamrock. The note holders for TEC and Shamrock have agreed in principle to extend the term of their existing notes to 48 months. Consequently, the notes will become the subordinated debt facility bearing interest at prime. The final terms of these notes, once formalized, are expected to be more favorable to the Company than the terms available under a typical subordinated debt facility. The Company expects to save over $2 million annually in interest expense alone; money that can be used to reduce existing bank debt or to fund additional drilling operations. Todd Yocham, the president of Tandem Energy Holdings states, "This is excellent news for the Company and its shareholders. The savings generated will be significant, and the funding provided by Guaranty Bank and the new long-term notes will finalize the purchases we made earlier in the year. Now we can focus on our primary business, which is to exploit and develop our existing properties and to evaluate further acquisitions where they make strategic sense."
The Company has also announced an update of its current drilling operations in Kansas. The Company has drilled its first two Coal Bed Methane gas wells in Montgomery County, Kansas. The two wells, the Edds South "27" #1 and the Allee "27" #1, were drilled to a depth of approximately 1,500 feet, wherein both wells penetrated a number of potentially productive coal seams. Based on logs, the Company has set 4 1/2" production casing, and completion operations for both wells have begun. The Company believes these wells should be capable of producing in commercial quantities and expects them to be connected to a sales line within the next month.
Forward-Looking Statements:
Statements about the company's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act 1934, and as the term is defined in the Private Litigation Reform Act of 1995. The Company's actual results could differ materially from expected results. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances. Should events occur which materially affect any comments made within this press release, the Company will appropriately inform the public.
Tandem Energy Holdings Inc.
200 N. Loraine, Suite 500
Midland, Texas 79701
432-686-7136
Contact: Mickey Cunningham
Tandem Energy Holdings Inc., Midland Mickey Cunningham, 432-686-7136
Copyright Business Wire 2005
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