2014

Tri-Valley Corporation Files for Chapter 11 Relief; Receives Commitment for DIP Financing

BAKERSFIELD, Calif., Aug. 8, 2012 /PRNewswire/ -- Tri-Valley Corporation (OTCQB: TVLY) (the "Company") today announced the Company, its wholly owned subsidiaries, Tri-Valley Oil & Gas Co. ("TVOG") and Select Resources Corporation, Inc., and TVC Opus I Drilling Program, L.P. ("Opus"), of which the Company is the managing partner (collectively, the "Debtors"), filed voluntary petitions in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") seeking relief under the provisions of Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") (collectively, the "Chapter 11 Cases").  The Company's Chapter 11 Case is being administered under the caption "In re: Tri-Valley Corporation" (Case No. 12-12291).  The Debtors have filed a motion with the Bankruptcy Court seeking to jointly administer, for procedural purposes, all of the Debtors' Chapter 11 Cases under the caption "In re: Tri-Valley Corporation, et al."

The Company has received a debtor-in-possession financing commitment of $11,048,078 by its senior secured lender George T. Gamble 1991 Trust ("Gamble Trust"), of which $3,850,000 represents new credit availability, to support the Debtors' business operations during the Chapter 11 Cases.  Upon approval by the Bankruptcy Court, the new debtor-in-possession financing and cash generated from the Debtors' ongoing operations will be used to support the business during the bankruptcy process.

During the month of June 2012, the Company worked with FTI Consulting, Inc., the Company's financial advisor, to evaluate cash flows and assess its liquidity.  In June and early July, the Company, representatives of the Gamble Trust and the Opus Special Committee ("OSC"), met to discuss potential solutions to the Debtors' pressing need for capital and the strategic alternatives available under present circumstances.  After further consultation with the Gamble Trust, the OSC and their respective advisors prior to the filing date, the Company concluded that the only feasible way to repay creditors and generate a substantial return to Opus investors was to seek to sell substantially all of the Debtors' assets, including those at Pleasant Valley and Claflin, in a competitive sale process under Section 363 of the Bankruptcy Code.  The Debtors intend to propose a Chapter 11 plan that simultaneously (i) resolves the outstanding claims between Opus, and Tri-Valley and TVOG, and (ii) distributes the expected proceeds of sale fairly and equitably.

Maston Cunningham, President and CEO of Tri-Valley, said, "Uncertainties surrounding, among other things, the outstanding alleged claims by Opus and the ongoing inquiry by the staff of the Securities and Exchange Commission, have made the Company unattractive for the significant additional funding that would have been required to avoid the bankruptcy process and continue exploring strategic alternatives.  We expect that a robust sale process for our oil, gas and mineral assets, and for Opus' oil and gas assets, will produce a substantial recovery for Tri-Valley creditors and for investors in the Opus partnership."

The Debtors have filed a series of motions with the Bankruptcy Court to assure the continuity and stability of operating their respective businesses, including the payment of wages and the continuation of benefit programs.  The Company expects operations to continue as usual throughout this process.

The Company believes that there may not be any value for Tri-Valley stockholders resulting from the bankruptcy process, given, among other things, the priority of claims of the Company's secured and unsecured creditors and the resolution of the outstanding alleged claims between Opus, Tri-Valley and TVOG.

Court filings and other documents related to the proceedings are available on a website administered by the Debtors' claims agent, Epiq Bankruptcy Solutions, LLC, at http://dm.epiq11.com/TVCORP.

Bankruptcy law does not permit solicitation of acceptances of a Plan of Reorganization until the Bankruptcy Court approves the Disclosure Statement. Accordingly, this announcement is not intended to be, nor should it be construed as, a solicitation for a vote on the Plan, which has not yet been filed with the Bankruptcy Court. Further, the Plan will become effective only if it receives the requisite stakeholder approval and is confirmed by the Bankruptcy Court.

About Tri-Valley Corporation
Tri-Valley Corporation explores for and produces oil and natural gas in California and has two exploration-stage gold properties in Alaska. Tri-Valley is incorporated in Delaware and is publicly traded on the OTQCB under the symbol "TVLY." Our Company website, which includes all SEC filings, is www.tri-valleycorp.com.

Special Note Regarding Forward-Looking Statements
All statements contained in this press release that refer to future events or other non-historical matters are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  We have attempted to identify forward-looking statements by terminology including "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "hope," "intends," "may," "plans," "potential," "predicts," or "seeks," or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions based on management's expectations as of the date of this press release, and involve known and unknown risks, uncertainties and other factors, including: (i) the ability of the Debtors to obtain Bankruptcy Court approval with respect to motions in the Chapter 11 Cases, (ii) the ability of the Debtors to negotiate, develop and consummate one or more Section 363 sales transactions and plans of reorganization with respect to the Chapter 11 Cases, (iii) the effects of the bankruptcy filing on the Debtors and the interests of various creditors, equity holders and other constituents, (iv) Bankruptcy Court rulings in the Chapter 11 Cases and the outcome of the cases in general, (v) the length of time the Debtors will operate under the Chapter 11 Cases, (vi) risks associated with third-party motions in the Chapter 11 Cases, which may interfere with the ability of the Debtors to negotiate, develop and consummate one or more Section 363 sales transactions, and to develop one or more plans of reorganization and consummate such plans once they are developed, (vii) the potential adverse effects of the Chapter 11 proceedings on the Debtors' liquidity or results of operations, (viii) the ability to execute on the Debtors' businesses, (ix) increased legal costs related to the bankruptcy filings and other potential litigation, (x) the ability of the Debtors to maintain contracts and leases that are critical to their operation, including to obtain and maintain normal terms with their lessors, vendors, customers, landlords and service providers and to retain key executives, managers and employees, and (xi) such other risks and factors that are discussed in greater detail in our filings with the Securities and Exchange Commission from time to time. In the event that the risks discussed above cause results to differ materially from those expressed in the Company's forward-looking statements, the Debtors' businesses, financial condition, results of operations or liquidity, and the interests of creditors, equity holders and other constituents, could be materially adversely affected.  The Company undertakes no obligation (and expressly disclaims any such obligation) to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact:
Tri-Valley Corporation
Maston Cunningham, President & CEO
+1 661-864-0500
inquiry@tri-valleycorp.com

SOURCE Tri-Valley Corporation



RELATED LINKS
http://www.tri-valleycorp.com

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