Goodrich closes Eagle Ford transaction

Goodrich Petroleum Corp. (NYSE: GDP) has closed its divestiture of the company's reserves and associated leasehold in the Eagle Ford shale play in LaSalle and Frio counties, Texas.

After certain purchase price adjustments the consideration was $116 million, of which $102 million was received by the company in cash at closing, with the remaining $14 million placed into escrow pending resolution of post-closing adjustments. Goodrich used the proceeds at closing to pay off its senior credit facility, with the difference held in cash.

Goodrich has retained approximately 17,000 net undeveloped acres in the Eagle Ford shale play for future development or sale.

While near-term liquidity issues are alleviated with the sale, Stifel analysts are maintaining a Hold rating for the company “based on the company’s heavy balance sheet and challenging macro fundamentals,” the analysts said in a note to investors Tuesday evening.

On Aug. 28, Goodrich noted the suspension of the 3Q15 dividends on its 5.375% series B cumulative convertible preferred stock, its 10.00% series C cumulative preferred stock, and its 9.75% series D cumulative preferred stock, the analysts noted.

Stifel analysts concluded, “The preferred dividend suspension improves near-term liquidity although any unpaid dividends accumulate. Based on our recently reduced NYMEX oil price forecast of $42.50 for 2H15 and $50 for 2016, GDP can cover its projected interest expense but would dip heavily into its cash balance (projected to be $47 million at 9/30/15 following the recent Eagle Ford sale that net $116 million).”

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...