All taken from SEC filings. Bolding is mine. Also keep in mind effective date of sale is Jan 1 2018 ... so all production revenue for that period is an adjustment in favor of Eagle as a deduction from settlement.
"If the transaction contemplated by the Purchase Agreement proceeds notwithstanding the failure by Eagle Energy to timely make the Deposit, closing would be contingent upon (a) Eagle Energy’s ability to obtain satisfactory financing within 15 days of the execution of the Purchase Agreement and (b) the approval of the transaction by the Company’s shareholders. The sale is to be effective as of January 1, 2018 and closing is expected to occur five days after the Company’s shareholders approve the transaction. The Purchase Agreement contains certain termination rights for both Samson USA and Eagle Energy, including the right of either party to terminate the agreement if the aggregate reduction to the purchase price as a result of environmental and title defects exceeds 20% of the purchase price."
The proposed transaction allows the Company to realise its investment in the Project. The Company acquired the Project in April 2016 for US$16 million. The proposed transaction with Eagle Energy values the Project at approximately US$50 million. At the point of acquisition in March 2016 Samson recognized a “bargain purchase” gain of $10.9 million, and at the sale of this asset, if approved by Shareholders, it will realise a further gain of approximately $13.4 million before transaction costs (unaudited internal estimate).
I mean really ... we gained $10.9M + $13.4 = $24.3M on a PSA of asset yet in default and couldn't make a profit? I bet there is a bonus in there somewhere recognizing the genius of mgmt in buying and selling this asset for a huge gain. Just a shame it didn't translate into share price gains.
SSN Price at posting:
0.2¢ Sentiment: None Disclosure: Held
