Constellation Energy Partners LLC (NYSE: CEP) has closed the previously announced sale of its Robinson’s Bend Field assets, which are located in Tuscaloosa County, Ala.
The sale resulted in net proceeds of approximately $55.3 million, $50.0 million of which was used to retire debt under the company’s credit facility. After the debt reduction, borrowings outstanding under the credit facility totaled $34.0 million. Adjusting for estimated transaction costs, the company maintained a cash balance of approximately $12.1 million as of Feb. 28, 2013, the date of the close. Upon closing of the sale, the borrowing base under the credit facility was immediately reduced to $37.5 million and the facility maturity date was extended to March 31, 2014. Since the third quarter of 2009, the company has reduced debt by 85%.
“This transaction marks a milestone for CEP and helps provide the financial flexibility necessary to support our efforts focused on growing our asset base by drilling for oil and pursuing consolidation opportunities in and around our Mid-Continent footprint,” said Stephen R. Brunner, president and chief executive officer of Constellation Energy Partners. “We believe these focused efforts, when combined with our reduced leverage, will have a positive impact on the way we achieve growth and, ultimately, value for our unitholders.”
The Spyglass Hill Unit comprises approximately 113,000 gross acres and holds all of the leases within the unit to all depths, including those depths and formations below the CBM Mesa Verde coal formation.
The recent rise in natural gas prices may enable the Denver-based company to initiate a plan of development which will include completing coals currently behind pipe, working over existing wells and drilling our permitted locations.