OKLAHOMA CITY, June 17, 2008 (PRIME NEWSWIRE) -- GMX Resources (Nasdaq:GMXR) (visit www.gmxresources.com to view the most recent Company presentation and for more information on the Company) today announced the execution of two definitive agreements with a private company to purchase 9,865 gross / 7231 net operated developed and undeveloped acres mostly in Harrison County, East Texas and Caddo Parish North Louisiana, which includes an average of 85% working interest in 11 units, producing 1,900 mcfepd. This acquisition increases the Company's net operated acreage to 74%. The mineral leases contain multiple producing layers and 90% of the acreage includes deep rights in the 'Haynesville'/Bossier Shale bringing the total approximate net 'Haynesville'/Bossier Shale acreage to 27,500. "These acquisitions represent a significant growth opportunity for GMXR, especially as we prepare our accelerated drilling plans for the 'Haynesville'/Bossier Shale," stated Ken Kenworthy, Jr., CEO and President. "The acreage represents excellent bolt-on operated opportunities adjoining our core development," he continued. The Company expects to begin horizontal drilling with multiple rigs in the 'Haynesville'/Bossier Shale within the next six months. Closing of the transaction will occur in the next few weeks.
Increase in Credit Facility
GMXR also announced an increase in the bank borrowing base to $140 million with a consortium of banks lead by Capital One,N.A. as Administrative Agent. Union Bank of California,N.A., BNP Paribas, Fortis Capital Corp and Compass Bank complete the newly expanded lending group. The Company expects an additional increase in the borrowing base in the fourth quarter of 2008 as a part of the regular semi-annual redetermination process. As a part of the addition of the new banks, the Company and the banks executed an amended and restated loan agreement providing for up to $250 million in loans as the borrowing base permits.
Dividend on 9.25% Series B Cumulative Preferred Stock
GMXR will pay a regular quarterly dividend of $0.578125 per share on July 1, 2008 to holders of record as of June 20, 2008 on the 2,000,000 outstanding shares 9.25% Series B Cumulative (non convertible) Preferred Stock. The shares are listed on The Global Select Market of The NASDAQ OMX Group, Inc. under the symbol "GMXRP."
GMXR is a 'Pure Play', E & P company with 435 BCFE in proved reserves and 2 TCFE in total 3P reserves that are 94% natural gas; consisting of 294 gross / 163.9 net Cotton Valley ("CV") producers and 1,457 gross / 904 net CV un-drilled locations; only 14% developed and providing a 100% success rate. Eight drilling rigs are currently developing this contiguous gas resource play on the Sabine Uplift; Carthage, North Field, in Panola & Harrison County of East Texas, where the Company has invested $60 million in infrastructure; which has contributed to 'Best In Class' finding and development costs; which also contains 19 vertical tests wells drilled and completed in 2006 into the Lower CV Bossier/Haynesville "Gas Shales" and has 175 horizontal locations on 120 acre density; 38 gross / 31 net Travis Peak/Hosston Sands & Pettit producers produce on the property. These multiple resource layers provide high probability repeatable organic growth. The Company, headquartered in Oklahoma City, Oklahoma, has interests in 351 gross / 207 net producing wells and operates 74% of its reserves. The Company's strategy is to grow shareholder value through acceleration of development and acreage additions achieving operational growth around its core area, converting its natural gas reserves to proved, while maintaining balanced prudent financial management.
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This press release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. They include statements regarding the Company's financing plans and objectives, drilling plans and objectives, related exploration and development costs, number and location of planned wells, reserve estimates and values, statements regarding the quality of the Company's properties and potential reserve and production levels. These statements are based on certain assumptions and analysis made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes appropriate in the circumstances, including the assumption that there will be no material change in the operating environment for the company's properties. Such statements are subject to a number of risks, including but not limited to commodity price risks, drilling and production risks, risks relating to the Company's ability to obtain financing for its planned activities, risks related to weather and unforeseen events, governmental regulatory risks and other risks, many of which are beyond the control of the Company. Reference is made to the Company's reports filed with the Securities and Exchange Commission for a more detailed disclosure of the risks. For all these reasons, actual results or developments may differ materially from those projected in the forward-looking statements.