With prices looking up, Energy Search Inc. of Knoxville, TN,sought and will get a boost to help develop some of its oil and gasproperties. The company made a deal to accelerate development withSouthern Producer Services, a subsidiary of Atlanta-based SouthernEnergy Inc.
In return for a commitment of up to $30 million, SouthernProducer Services will trade and market Energy Search production,attain a minority overriding royalty interest in wells developed byEnergy Search using the Southern Producer Services funds, receivewarrants to 100,000 shares of common stock at $6.50 per share, andcollect with interest the $30 million advance.
The deal allows Energy Search to retire $8.8 million of bankdebt and accelerate developmental drilling on properties in Ohioand West Virginia. Southern Producer Services, also will providehedging and price management services to Energy Search.
Energy Search CEO Charles P. Torrey said he expects the companywill drill 59 new wells during the next 13 months. “With energyprices rising, this appears to be the right time to accelerate thetimely development of our properties. Our relationship withSouthern Energy allows us to do that.”
Energy Search Inc. is an independent oil and gas exploration andproduction company focused primarily on developmental drilling andproduction of gas reserves in the Appalachian Basin.
Joe Fisher, Houston
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