Resolute Energy Corp (NYSE:REN) is $177.5 million richer as it has sold the Gardendale assets in West Texas. The cash inflow will help in the debt reduction of the company and future developments in the Delaware basin property in West Texas and the Aneth Field property in southeast Utah.
A $15 million deposit was paid by the undisclosed buyer under the purchase and sale deed and the complete transaction will be done till December 22. The transaction is being initiated under the financial advice of Petrie Partners, LLC and BMO Capital Markets.
Right Time To Reduce Debt
The company’s Chairman and CEO Nicholas J. Sutton disclosed that this deal was part of the company’s debt reduction and liquidity improvement strategy. The company was also mulling to divert the attention to developing the Permian basin and other properties. He said that including the current transaction, the company has sold assets worth $275 million in 2015. The company was also working on monetizing the infrastructural assets and new strategies for competing with others in the industry. The move is definitely a right decision as it is aimed at making the company financially sound.
Reverse Stock Split To Discontinue Post 2015
In another announcement, Resolute Energy Corp (NYSE:REN) has also disclosed that it would not be initiating the reverse stock split after this year. The company has already sought consultancy from NYSE in this regard. According to a company statement, NYSE’s policies have allowed it to again regularize the trading price of the common stock to $1.00 till the company’s annual meet in 2016.
Until that time, if the company is unable to increase the trading price of the common stock in the event of the improvement in the market, then it would again have to consult the NYSE for getting permission for a reverse stock split by the shareholders. The reverse stock split will have to be completed during the 2016 annual meeting or the company would be delisted by the exchange. During the entire period, the company’s listing at the NYSE shall resume and if the company meets all the listing criteria, the stock will continue to trade at NYSE.