GMX Resources Inc., Oklahoma City, Okla., (NYSE: GMXR) has closed on an agreement to sell a limited term overriding royalty interest in certain of the company's oil and gas properties located in the Haynesville/Bossier shale formation (H/B) in Harrison County in East Texas to EDF Trading North America LLC, a subsidiary of EDF Trading, the trading group for the French owned power conglomerate EDF S.A.

The Production Payment for $49.7 million dollars will be for scheduled quantities of an aggregate of approximately 14.75 Bcf to be produced over a 95-month period commencing December 1, 2011. The term may be extended as necessary to fully deliver scheduled quantities. Natural gas produced from the subject interests will be allocated first to the Production Payment, and the oil and other liquid hydrocarbons produced from the subject interests will be allocated first to the company's retained interests, so that the Production Payment hydrocarbons will consist of natural gas to the extent reasonably practicable. Scheduled quantities of production of natural gas from these properties attributed to the Production Payment for 2012 will be approximately 3.9 Bcf.

The VPP will be treated as a sale for accounting purposes and the company's oil and natural gas properties will be reduced accordingly. The reduction from the VPP on the Company's year-end 2010 PV-10 of $249.9 million is expected to be approximately $45.6 million, and is not expected to result in any adjustments to our proved undeveloped locations. A portion of the proceeds from the VPP was used to retire the company's borrowings under our revolving bank credit facility.

As previously planned, the company has monetized its entire natural gas hedge portfolio for $18.5 million dollars. These hedges were primarily combinations of put spreads and costless collars on 16.7 Bcf in 2012 and 4.7 Bcf in 2013. Combined with the Production Payment, the company has created $68 million dollars in cash proceeds allowing for the continued transition to a liquids rich drilling program.