Energy Search Makes Production-Boosting Deal
With prices looking up, Energy Search Inc. of Knoxville, TN,
sought and will get a boost to help develop some of its oil and gas
properties. The company made a deal to accelerate development with
Southern Producer Services, a subsidiary of Atlanta-based Southern
In return for a commitment of up to $30 million, Southern
Producer Services will trade and market Energy Search production,
attain a minority overriding royalty interest in wells developed by
Energy Search using the Southern Producer Services funds, receive
warrants to 100,000 shares of common stock at $6.50 per share, and
collect with interest the $30 million advance.
The deal allows Energy Search to retire $8.8 million of bank
debt and accelerate developmental drilling on properties in Ohio
and West Virginia. Southern Producer Services, also will provide
hedging and price management services to Energy Search.
Energy Search CEO Charles P. Torrey said he expects the company
will drill 59 new wells during the next 13 months. "With energy
prices rising, this appears to be the right time to accelerate the
timely development of our properties. Our relationship with
Southern Energy allows us to do that."
Energy Search Inc. is an independent oil and gas exploration and
production company focused primarily on developmental drilling and
production of gas reserves in the Appalachian Basin.
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