Tengasco Inc. (NYSE MKT: TGC) has closed the sale of its Swan Creek field in Hancock County, Tennessee, and all of its other Tennessee oil and natural gas leases and related properties together with its 67-mile natural gas pipeline system and related properties extending from the Swan Creek field to Kingsport, Tennessee, for $1.5 million pursuant to the terms of a previously announced March 1 purchase and sale agreement between Tengasco and Swan Creek Partners LLC and its affiliate General Gas Pipeline LLC.
The sale did not include the assets of Manufactured Methane Corp., including the methane facility and electric generator at Carter Valley landfill in Hawkins County, Tennessee.
Closing of the sale had been contingent upon the Tennessee Regulatory Authority granting regulatory approval to General Gas Pipeline LLC for the transfer of utility status of the pipeline, and Tengasco receiving certain landowner approvals of assignment of pipeline easements. The Tennessee Regulatory Authority granted transfer approval in July and the remaining conditions to closing were completed the first week of August.
On closing of the sale, Tengasco now has no remaining oil or natural gas producing properties or lease position for oil or gas exploration in Tennessee, and no natural gas pipeline assets. The company has used all of the proceeds of this sale to pay down its borrowings, reducing the current balance owed under its existing credit facility with F&M Bank in Dallas, Texas, from $5.2 million to approximately $3.8 million. As a result of Tengasco’s impairment of its pipeline asset in 2012 to a reduced value of $1.4 million, it is anticipated that this sale will have no effect upon its earnings in the current reporting period.