Pyramid & Yuma Energy entered into Merger Agreement

Source: 2/6/2014, Location: North America

Pyramid Oil Company and privately held Yuma Energy, Inc. jointly have entered into a definitive merger agreement for an all-stock transaction. Upon completion of the transaction, which is subject to the approval of stockholders of both companies, Pyramid will change its name to "Yuma Energy, Inc.," and relocate its headquarters to Houston, Texas, while maintaining offices in Bakersfield to oversee its California operations.

Headquartered in Houston, Texas, Yuma has been in the oil and gas business for over 30 years. Yuma focuses on the exploration for and development of conventional and unconventional oil and gas prospects, primarily through the use of 3-D seismic surveys, in the U.S. Gulf Coast region. In addition, Yuma has a non-operated position in the Bakken Shale in North Dakota. Yuma's core competencies in generating oil and gas prospects include: unconventional oil plays; onshore liquids-rich projects; and high impact deep onshore prospects located beneath known producing trends, identified through the use of 3-D seismic surveys. As of December 31, 2013, Yuma had oil and gas leasehold acreage of approximately 80,000 net acres.

Yuma is currently producing approximately 2,850 barrels of oil equivalent per day (BOEPD), and based on a Netherland, Sewell & Associates, Inc. July 31, 2013 reserve report using Securities and Exchange Commission ("SEC") pricing parameters, Yuma had approximately 19.8 million BOE of proved reserves. By comparison, Pyramid is currently producing approximately 130 BOEPD and had proved reserves of 482,000 BOE, as of December 31, 2012. Both Pyramid and Yuma are updating their reserve information as of December 31, 2013.

Michael D. Herman, Pyramid Chairman, who also assumed the roles of Interim President and Interim Chief Executive Officer in October 2013 said, "This merger will allow Pyramid's shareholders to join a much larger company with a proven management team and very experienced Board of Directors. Yuma is focused on the rapid expansion of its production and reserves."

Sam L. Banks, Chairman and Chief Executive Officer of Yuma commented, "We believe the time is right for Yuma to become a publicly traded company. We have been working hard to position Yuma for this opportunity and look forward to working with Pyramid to complete this transaction and advance our collective portfolio of projects."

Terms and Conditions
Under the terms of the merger agreement, Pyramid will issue an aggregate of approximately 66 million shares of Pyramid common stock to Yuma stockholders, resulting in former Yuma stockholders owning approximately 93% of the post-merger company. Upon completion of the transaction, there will be an aggregate of approximately 71 million shares of common stock outstanding. As part of the merger, Pyramid will reincorporate as a Delaware corporation. The transaction is expected to qualify as a tax-deferred reorganization under Section 368(a) of the Internal Revenue Code.

As previously noted, the transaction is subject to the approval of the stockholders of both companies, as well as other customary approvals, including authorization to list the newly issued shares on the NYSE MKT. The companies anticipate completing the transaction in mid-2014.

Upon closing, all of the executive officers and directors of Yuma will assume the same roles with the merged company. Sam L. Banks, Yuma's Chairman and Chief Executive Officer, will assume the same roles of the merged company, as will Michael F. Conlon, Yuma's President and Chief Operating Officer, Kirk F. Sprunger, Yuma's Chief Financial Officer, Treasurer and Secretary, and James "Jay" Jacobs, Yuma's Vice President of Corporate and Business Development. The composition of the board of directors will be Sam L. Banks (Chairman), Richard K. Stoneburner, James W. Christmas, Frank A. Lodzinski, Richard W. Volk and Ben T. Morris; and the board will meet the director independence requirements of the NYSE MKT.

ROTH Capital Partners, LLC acted as financial advisor to Pyramid in the transaction. Legal counsel to Yuma in the transaction is Jones & Keller, P.C., Denver, Colorado. Legal counsel to Pyramid in the transaction is TroyGould PC, Los Angeles, California.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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