Black Ridge Oil & Gas Inc. (OTCQB: ANFC) has confirmed a restructuring agreement with the company's subordinated lender, Chambers Energy Management LP.
Per the terms of the agreement, all of the oil and gas assets (including working capital and tangible and intangible assets) currently owned by the company, together with the liabilities from the assets and the liabilities from the company's senior revolving credit facility and subordinated credit facility, will be contributed to Black Ridge Holding Co. LLC (BRHC), a new entity controlled and majority-owned by Chambers. Black Ridge will have an initial ownership in BRHC of 5%, subject to dilution from additional capital investments made by Chambers.
Black Ridge will continue to manage the oil and gas assets of the new entity in exchange for a management fee and further non-voting equity sharing if certain valuation hurdles are met. This transaction is subject to approval from Cadence Bank NA, and completion of required filings with the US Securities and Exchange Commission. The transaction is expected to close in May with an effective date of April 1. The company will exit this restructuring with no debt.
Following the transaction, Black Ridge Oil & Gas will remain a public company, transitioning corporate strategy from that of a direct asset owner to that of an indirect asset owner and asset manager, with no change to governance or shareholder base.