"We are engaged in discussions with a non-bank lender with respect to refinancing our current $24 million credit facility, which expired October 31, 2018, and is now due and payable."
MOB are patient critters. Debt has matured and not been repaid ... that's default in anyone's language.
"Our ability to continue as a going concern is dependent on obtaining the capital necessary to permit additional development of our oil and gas properties or a monetization of some or all of those properties. We are engaged in discussions with a non-bank lender with respect to refinancing our current credit facility. We are also continuing to market our major asset for sale after the buyer failed to close on the sale contemplated by the purchase and sale agreement for the Foreman Butte Project executed in June 2018. Mutual of Omaha Bank currently has the right to issue a notice of default on account of the expiration of the $24 million credit facility, however, to the date of this report, the bank has not exercised that right.
In addition to pursuing a refinancing of our debt, we have re-engaged PLS Energy Advisors Group to market the Foreman Butte Project following the failure of the previously contracted buyer to close a $40 million purchase. Based on our current financial position, in both cases, we may now be required to accept terms less favorable than would otherwise be available to us. There also can be no assurance that we will be successful in refinancing our debt or the sale of the Foreman Butte Project, with or without a retained interest. These factors indicate there is substantial doubt about our ability to continue as a going concern."
Note the phrasing "based on our current financial position" & ""accepting terms less favorable"
Also note that "we have also engaged a non-bank lender to consider refinancing our current Mutual of Omaha Bank credit facility." - so this has also been tried before but to no avail. They are looking for $40M (of which $24M goes to MOB and then they have lots of payables to ... well pay, which sounds more like it will become a Debtor in Possession type loan which in US means only companies in Ch11 filing can go down this path).
The 10Q (filed 14th Nov in USA - so today for us Aussies) basically concludes with
SSN Price at posting:
0.2¢ Sentiment: None Disclosure: Held
