SAN ANTONIO, April 4, 2012 /PRNewswire/ -- Cross Border
Resources, Inc. (OTCQX: XBOR) ("Cross Border" or "the Company"), a
San Antonio-based oil and gas
exploration and production company, today announced that it has
filed a definitive consent revocation statement with the Securities
and Exchange Commission ("SEC") urging shareholders to reject the
consent solicitation being conducted by Red Mountain Resources,
Inc. ("Red Mountain") seeking to, among other proposals, add six
nominees selected by Red Mountain to the Cross Border Board of
Directors.
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Cross Border recommends that shareholders not take any action on
the consent solicitation card sent by Red Mountain, and if they
have already done so, revoke their consent by signing and returning
the BLUE consent revocation card that Cross Border will begin to
mail out to shareholders immediately. Cross Border disputes the
validity of the Red Mountain written consent solicitation under
Cross Border's Bylaws and Nevada
law. However, the Board has determined to solicit consent
revocations out of an abundance of caution in the event a court
rules that the Red Mountain consent solicitation is valid.
Cross Border's management team continues to execute its business
strategy and believes it has created significant value for the
Company's shareholders since the Company's inception, which
resulted from the business combination of Doral Energy Corp. and
Pure Energy Group on January 3, 2011.
The Company asks its shareholders to consider the following
facts:
- As reported in the Company's 2011 Form 10-K, proved reserves
grew to 2.1 million barrels of oil equivalent ("MMBOE") as of
December 31, 2011 with a PV10 for
proved reserves of approximately $44.0
million.
- Average production rate at January 31,
2012 was 500 barrels of oil equivalent per day ("BOED"), an
increase of 85% compared to 271 BOED at January 3, 2011. As of year-end 2011, the
Company's daily production mix was approximately 63% oil and
liquids.
- Cross Border has demonstrated its ability to access the capital
markets with the successful closing of a $5.4 million common stock and warrant private
placement in May 2011.
- The Company's borrowing base under its credit facility with
Texas Capital Bank, established at $4.0
million on January 31, 2011,
was increased to $9.5 million on
March 1, 2012.
- The Company refinanced its 7.5% debentures on March 1, 2012 using its increased capacity under
its existing credit facility, thus allowing management the
flexibility to access a lower cost of capital.
- By meeting requisite disclosure and financial qualifications,
Cross Border was assigned to the OTCQX market tier, the highest
tier of the over-the-counter market, in June
2011.
- At the end of 2011, 65 proved undeveloped locations remained in
the Company's reserves. During the year, Cross Border participated
in the drilling of 16 wells at a capital cost of over $3.6 million, successfully completing 12 of these
wells as producers by the end of 2011. As of March 9, 2012, two additional wells have been
placed on production, and two wells are being completed. With the
anticipated successful completion of the remaining two wells, Cross
Border will have enjoyed a 100% success rate in the 2011 drilling
program.
"As evidenced by the facts, we continue to realize value for our
shareholders," stated Will Gray,
Chairman and CEO of Cross Border. "While we are pleased with
Cross Border's growth in production and reserves since January 2011, we have undertaken a strategic
review process to identify alternatives to address the disconnect
between the Company's net asset value and its current share price.
If any cash offers or merger opportunities are received, the Board
will evaluate all such offers. Management is hopeful that the
strategic review process will present opportunities for maximizing
value for all shareholders, and in the Board's view, its actions
have been to achieve that and are not and have not been for the
purpose of entrenching management or the current Board. Management
believes the consent solicitation is detrimental to this strategic
review process, as it may be a deterrent to interested parties and
consumes significant management time and Cross Border resources.
Our current board members, the majority of whom are independent
directors, welcome Red Mountain's participation in our strategic
review process and in our upcoming annual meeting, but believe that
this hostile attempt to take over our Board is unwarranted."
The Company also asks that the Company's shareholders consider
the following when deciding whether to support Red Mountain's
attempts to take over the Board:
- The Board does not believe that Red Mountain has provided an
adequate indication as to how its nominees would operate the
Company differently from the current Board. It is possible that
their intent is to effect a change in the composition of the Board
with an aim to, subject to the Dissident Nominees' fiduciary duties
under Nevada law, facilitate a
sale of the Company or its assets (in whole or in part) to Red
Mountain on terms favorable to Red Mountain. The Board believes you
have a right to be advised of Red Mountain's ultimate intentions
with respect to its proposed changes to the Board and the strategic
direction of the Company before Red Mountain asks you to consent to
a change in the composition of the Board.
- Five of the six Red Mountain nominees are current officers or
directors of Red Mountain. Both Cross Border and Red Mountain are
engaged in the business of oil and gas exploration. The Board
believes that the Company's stockholders should have serious
concerns as to whether Red Mountain's nominees would have any
conflicts of interest that would preclude them from being in a
position to independently evaluate the Company's business and
undertake a review of all of the Company's strategic options.
- The Board believes that you should have significant concerns
regarding certain allegations made by the National Association of
Securities Dealers, Inc. ("NASD") against Alan W. Barksdale. In 2004 the NASD alleged that
Mr. Barksdale solicited an attorney to make contributions to
officials of an issuer with which Stephens Inc. was engaging in
municipal securities business. Mr. Barksdale was an investment
banker of Stephens at the time.
Without admitting or denying the allegations, Mr. Barksdale entered
into an acceptance, waiver and consent decree that provided for a
30-day suspension from associating with any NASD member and a
$5,000 fine.
- Prior to Red Mountain first filing a preliminary version of its
Consent Solicitation Statement with the SEC, Red Mountain had never
provided the Company with any nominations for directors, proposals
for stockholder resolutions or suggestions for business
combinations. Had RMR approached the Company with constructive
proposals prior to waging a consent solicitation, the Company would
have gladly engaged in productive discussions with RMR.
- The solicitation itself is consuming time and resources that
would be better spent on improving the Company's business and
strategic position, thereby undermining the Company's
implementation of its goal of maximizing stockholder value.
Mr. Gray continued, "We encourage our shareholders to vote
against Red Mountain's proposals and let Cross Border's current
directors complete their strategic alternative review in order to
provide shareholder value."
The Company will mail the definitive Consent Revocation
Statement and a form of consent revocation to each stockholder
entitled to deliver a written consent in connection with the
possible consent solicitation. CROSS BORDER URGES INVESTORS TO
READ THE CONSENT REVOCATION STATEMENT FILED WITH THE SEC ON
APRIL 2, 2012 (INCLUDING ANY
SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE
COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE, BECAUSE
THEY CONTAIN IMPORTANT INFORMATION. Cross Border, its
directors and certain officers may be deemed to be participants in
the solicitation of consent revocations from Cross Border
stockholders. Information concerning the interests of Cross
Border's participants in the solicitation is included in the
definitive Consent Revocation Statement. Stockholders will be able
to obtain, free of charge, copies of the Consent Revocation
Statement and any other documents filed by the Company with the SEC
in connection with the possible consent solicitation at the SEC's
website at http://www.sec.gov and at the Company's website at
http://www.xbres.com.
About Cross Border Resources
Cross Border Resources is an oil and gas exploration company,
headquartered in San Antonio,
Texas, focusing on non-operated opportunities with proven
operators within the Permian Basin.
Information about the Company is available on its website,
http://www.xbres.com.
Forward-Looking Statements
This news release contains forward-looking statements that are
not historical facts and are subject to risks and uncertainties.
Forward-looking statements are based on current facts and analyses
and other information that are based on forecasts of future
results, estimates of amounts not yet determined, and assumptions
of management. Forward-looking statements are generally, but not
always, identified by the words "expects", "plans", "anticipates",
"believes", "intends", "estimates", "projects", "aims",
"potential", "goal", "objective", "prospective", and similar
expressions or that events or conditions "will", "would", "may",
"can", "could" or "should" occur. Information concerning oil or
natural gas reserve estimates may also be deemed to be
forward-looking statements, as it constitutes a prediction of what
might be found to be present when and if a project is actually
developed.
Actual results may differ materially from those currently
anticipated due to a number of factors beyond the reasonable
control of the Company. It is important to note that actual
outcomes and the Company's actual results could differ materially
from those in such forward-looking statements. Factors that could
cause actual results to differ materially include misinterpretation
of data, inaccurate estimates of oil and natural gas reserves, the
uncertainty of the requirements demanded by environmental agencies,
the Company's ability to raise financing for operations, breach by
parties with whom the Company has contracted, inability to maintain
qualified employees or consultants because of compensation or other
issues, competition for equipment, inability to obtain drilling
permits, potential delays or obstacles in drilling operations and
interpreting data, the likelihood that no commercial quantities of
oil or gas are found or recoverable, and our ability to participate
in the exploration of, successful completion of development
programs on all aforementioned prospects and leases and general
economic and business conditions. Additional information risks for
the Company can be found in the Company's filings with the U.S.
Securities and Exchange Commission.
Contacts:
Investor Relations Contact:
Jon Cunningham
RedChip Companies, Inc.
Tel: +1-800-733-2447, Ext. 107
jon@redchip.com
http://www.redchip.com
Company Contact:
Cross Border Resources, Inc.
Everett Willard "Will" Gray II
willg@xbres.com
SOURCE Cross Border Resources, Inc.