Rooster Energy Ltd.

Rooster Energy Ltd.

November 18, 2014 20:00 ET

Rooster Energy Completes Transformative Acquisitions and Recapitalizes Balance Sheet

CALGARY, ALBERTA--(Marketwired - Nov. 18, 2014) - ROOSTER ENERGY LTD. (or the "Company") ( (TSX VENTURE:COQ) is pleased to announce that it has closed on its acquisitions of Cochon Properties, LLC, and Morrison Well Services, LLC, and fully satisfied the Company's outstanding US$22.5 million term loan with proceeds from the issuance US$45 million in senior secured notes.

Robert P. Murphy, President & CEO, commented, "we are pleased to have consummated our transformative acquisitions of Cochon Properties and Morrison Well Services in combination with our refinancing of the Company's outstanding senior secured debt. Rooster's unique, vertically integrated strategy aggregates all the skill sets needed to take the development of oil and gas reserves from "Cradle to Grave". With our new financing in place we have strengthened the balance sheet not only for future development of our reserve base but also to deliver the same safety and quality in well intervention and plugging and abandonment services. We look forward to utilizing our integrated strategy in this opportunistic environment to grow Rooster and build value for our shareholders."

Cochon Properties and Morrison Well Services Acquisitions

The Company completed its acquisition of all of the membership interest of Cochon Properties, LLC ("Cochon") and Morrison Well Services, LLC ("Well Services") effective on November 17, 2014. The total consideration or purchase price paid for the acquisitions was US$125 million in common stock and cash.

Specifically, the sole member of Well Services received 161,596,596,958 common shares of the Company valued at US$85 million and the sum of US$10 million cash, and the three members of Cochon received a total of 57,034,221 common shares valued at US$30 million.

As a result, both Cochon and Well Services are wholly owned subsidiaries of the Company.

Subsequent to the acquisitions, the Company will have issued and outstanding 259,028,502 shares of common stock and 65,071 proportionate voting shares (each convertible to 1,000 common shares) or 324,099,502 common shares after conversion of the proportionate voting shares to common shares.

$45 Million Term Loan Facility

The Company has entered into a Note Purchase Agreement under which the Company has issued Senior Secured Notes in the amount of US$45 million due on February 17, 2016 (the "Notes"). The proceeds of the Notes will be used to: 1) repay existing senior secured debt in the principal amount of US$22.5 million plus accrued interest thereon and fees; 2) fund the US$10 million cash portion of the purchase price for Well Services; and 3) provide for working capital and other general corporate purposes.

The Notes are secured by a first priority security interest, lien and mortgage on all of the Company's assets including its oil and gas properties. The Notes bear interest at a rate equal to Libor + 11.5% per annum with interest payments due monthly; the minimum interest rate will be 13.0% per annum.

As a condition for closing the Notes, the Company was required to sell forward certain quantities of its oil and gas production over the term of the Notes. Accordingly, the Company has entered into fixed swap agreements to sell an average of 653 barrels of oil per day and 7,033 million British thermal units of gas per day at US$77.50 per barrel of oil and US$3.81 per thousand British thermal units of gas, respectively.


Rooster Energy Ltd. is a Houston, Texas, USA, based independent oil and natural gas exploration and production company focused on the development of resources in the shallow waters of the Gulf of Mexico. At June 30, 2014, our primary assets consist of interests in 22 producing oil and/or natural gas wells and 15 federal leases or blocks. The Company is the operator of the majority of its properties and daily oil and gas production.

Investors are welcome to visit our website at or contact the following for all corporate updates and investor inquiries:

Forward Looking Information and Statements

Certain statements and information in this press release may constitute "forward-looking information" or statements as such terms are used in applicable Canadian securities laws. Any statement that expresses, involves or includes expectations of the anticipated benefits of the acquisitions or refinancing of existing debt or future operations (including drill rig commitments and use of proceeds), commerciality of any hydrocarbon discovered, production rates, operating costs, commodity prices, administrative costs, commodity price risk and other components of cash flow and earnings, management activity, acquisitions and dispositions, capital spending, access to credit facilities taxes, regulatory changes, projections, objective, assumptions or future events that are not statements of historical fact should be viewed as "forward-looking statements". Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. These risks include, but are not limited to, the risks associated with the oil and gas industry, commodity prices, and exchange rate changes. Industry related risks could include, but are not limited to, operational risks in exploration, development and production, delays or changes in plans, risks associated with the uncertainty of reserve estimates, or reservoir performance, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to place undue reliance on any forward-looking statement in this press release. The Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Financial outlook information contained in this press release about the Company's prospective cash flows and/or financial position is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available. Readers are cautioned that any such financial outlook information contained herein should not be used for purposes other than for which it is disclosed herein.


Contact Information

  • Rooster Petroleum, LLC
    Gary Nuschler, Jr.
    Vice President-Finance
    (832) 463-0625

    Rooster Petroleum, LLC
    16285 Park Ten Place, Suite 120
    Houston, Texas, USA 77084