Oil exploration and production company Emerald Oil Inc. has signed a definitive agreement with White Deer Energy, an energy private equity firm based in Houston and New York, to issue and sell $50 million of Perpetual Preferred Stock to White Deer.
The Preferred Investment is structured as follows:
- 10% Perpetual Preferred Stock.
- Detachable warrants, exercisable for 5,114,633 shares of Emerald common stock, attached to voting rights for approximately 19.9% (approximately 16.6% pro forma following the Preferred Investment) of Emerald's outstanding common stock. The warrants are exercisable at $5.77 per share, the 10-day volume weighted average price of Emerald's common stock prior to entering into the definitive agreement.
- Upon closing the investment, Thomas J. Edelman, a co-founder and managing partner at White Deer, will be added to Emerald's board of directors, which will expand from 7 to 8 members.
- Closing and funding is scheduled to occur on February 19, 2013.
- Johnson Rice & Company LLC acted as advisor to Emerald.
Denver-based Emerald is focused primarily on the development of its approximate 47,000 net acres in the Williston Basin in North Dakota and Montana, prospective for oil in the Bakken and Three Forks formations. Following the completion of a pending transaction to sell approximately 31,000 net acres in the Sand Wash Basin in southwest Wyoming, Emerald will hold approximately 14,000 net acres in the Sand Wash Basin in northwest Colorado, prospective for oil in the Niobrara formation, and holds approximately 33,500 net acres in central Montana, prospective for oil in the Heath formation.