OKLAHOMA CITY, Nov. 19 /PRNewswire-FirstCall/ -- Crusader Energy Group Inc. (Pink Sheets: CKGRQ) today announced that J/M Crusader Acquisition Sub LLC, a subsidiary of Jones Energy Ltd., was the successful bidder at an auction conducted on Friday, November 13, 2009, pursuant to the bid procedures approved by the Bankruptcy Court in Crusader's bankruptcy proceedings. Jones' successful bid is to acquire all shares of the common stock of Crusader that will be issued upon the effectiveness of the reorganization of Crusader and its wholly-owned subsidiaries under Chapter 11 of the United States Bankruptcy Code. As previously announced, Crusader and its wholly-owned subsidiaries filed voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code with the United States Bankruptcy Court for the Northern District of Texas, Dallas Division on March 30, 2009. Under Crusader's proposed plan of reorganization, all of the currently outstanding equity interests in Crusader would be cancelled upon consummation of the Jones transaction and Crusader and its wholly-owned subsidiaries would become subsidiaries of Jones.
Jones agreed to pay a combination of cash and a contractual contingent payment right to receive 22% of the net cash flow from certain of Crusader's properties after the closing. The Jones' bid was valued in the aggregate at $289 million, of which $240.5 million will be in cash, subject to customary closing adjustments. The contractual contingent payment right has an agreed value of $48.5 million among Crusader and certain of its creditors. Based on the consideration to be paid by Jones, the holders of Crusader's outstanding equity interests would not receive any distribution under the proposed plan of reorganization on account of their equity interests.
The closing of the transaction is subject to customary conditions, as well as confirmation of Crusader's plan of reorganization by the Bankruptcy Court. The closing is expected to occur during the fourth quarter of 2009.
In addition, Crusader completed the sale of certain oil and gas assets in the Whittenburg Basin in the Texas Panhandle on November 13, 2009. As previously announced, the Whittenburg Basin assets were subject to a separate sales process structured as a sale of assets under Section 363 of the United States Bankruptcy Code. Gunn Oil Company, Cogent Exploration, Ltd. and Apollo Exploration, LLC acquired the Whittenburg Basin assets for $400,000.00 in cash and the assumption of approximately $9.9 million of certain contractual obligations of Crusader and its subsidiaries.
Jefferies & Company, Inc. acts as financial adviser to Crusader in its Chapter 11 reorganization and advised Crusader on this transaction. Vinson & Elkins LLP is restructuring and reorganization counsel to Crusader.
Information regarding Crusader's plan of reorganization and disclosure statement may be obtained at www.bmcgroup.com and selecting "Find a Case" and then clicking on "Crusader Energy Group Inc."
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, statements regarding the consummation of the proposed transaction involving Jones. These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including that the proposed transaction may not be completed for reasons including because conditions precedent to the completion of the acquisition may not be satisfied. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
Oklahoma City-based Crusader Energy Group Inc. is an oil and gas company with assets focused in various producing domestic basins. The Company has a primary focus on the development of unconventional resource plays which includes the application of horizontal drilling and cutting edge completion technology aimed at developing shale and tight sand reservoirs. The Crusader assets are located in various domestic basins, the majority of which are in the Anadarko Basin and Central Uplift, Ft. Worth Basin Barnett Shale, Delaware Basin, Val Verde Basin, and the Bakken Shale of the Williston Basin.
SOURCE Crusader Energy Group Inc.