NGI The Weekly Gas Market Report
Philadelphia-based Resource America Inc. announced it has signedan agreement to acquire the stock of Viking Resources Corp., aprivately held energy and energy finance company based in NorthCanton, OH, and centered in the Appalachian Basin.
Consideration will be in the form of approximately $17 millionin cash, 1.25 million shares of newly issued Company common stockand the assumption of $1.7 million of Viking’s debt at closing fora total of about $36 million. Additionally, contingentconsideration may be earned by selling stockholders for achievingcertain goals by January 2000, 2001, and 2002.
After the merger is completed, Resource America, through AtlasAmerica Inc., its Pittsburgh, PA-based energy operating subsidiaryacquired last year, and Viking, will manage more than 90partnerships and joint ventures, with an original cost exceeding$490 million. Additionally, it will operate more than 3,300predominantly gas wells and more than 1,375 miles of gas gatheringpipeline system, located primarily in western Pennsylvania, westernNew York and eastern Ohio.
Daily production is expected to increase from approximately 40.5MMcf/d gas equivalent to 55.5 MMcf/d. Proved and producing reserveswill increase from approximately 236.6 Bcf to 303.5 Bcf of naturalgas equivalent. Resource America operates a diversified financialservices company which started with energy and expanded into realestate finance and equipment leasing. With the acquisition of AtlasAmerica and Viking the company is “re-energizing” its originalfocus, a spokesman said.
The acquisition is expected to be accretive. Closing isanticipated to take place on Aug. 31, 1999. Viking, a participantin the energy finance industry for more than 15 years, offersenergy-related investment products through a nationwide network ofbroker/dealers. It currently manages partnerships and operatingenergy assets with an original cost of more than $140 million.
In conjunction with this activity, Viking has participated ineach of the 870 wells it has drilled and now operates in theAppalachian Basin, retaining an interest in the production andproviding operating services for each of the wells. Viking also hasconstructed and operates more than 150 miles of gas gatheringpipelines.
Viking will continue to offer private investment programs,focusing on gas development drilling opportunities in theirtraditional area of southwestern Pennsylvania, through its currentbroker/dealer network.
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