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Tengasco to review options
Posted on Tuesday, 14 January 2020 14:49
Tengasco has hired Roth Capital Partners to advise on a strategic review of options that could include continuing as a standalone company, going private and acquiring a business within or outside of the energy industry.
In a statement released before the stock market opened today, the Colorado-based oil and gas explorer and producer said it wanted to explore potential transactions or combinations to maximise shareholder value.
Chief executive Michael Rugen said: “Despite navigating challenging oil markets, Tengasco has carefully maintained its national exchange listing and a clean balance sheet.
“These characteristics make Tengasco a prime candidate for businesses seeking to go public that may not have a traditional IPO [initial public offering] route available to them.
“While there appear to be larger public vehicles (for example, special purpose acquisition companies [SPACs]) with larger transaction thresholds, we continue to believe there is a gap in access for small and medium-sized businesses that have a desire to go public.”
The company stressed the review would not necessarily result in a deal or other outcome and noted it does not intend to comment further until the board has approved a definitive agreement.
Tengasco’s conventional oil producing assets are primarily located in the Central Kansas Uplift, Kansas.
In 2018, the company sold its non-core methane facility assets in Carter Valley, Tennessee to focus on its existing oil properties.
Currently, Tengasco, “has no outstanding bank debt, maintains a positive working capital position, and has a neutral to positive monthly EBITDA [earnings before interest, tax, depreciation and amortisation]”, according to the statement.
Zephyr, the M&A database published by Bureau van Dijk, shows nine deals targeting the oil and gas extraction sector in the US have already been announced so far this calendar year.
The transactions include Midcoast Energy Holdings closing a USD 830.00 million refinancing of USD 830.00 million.
© Zephus Ltd