Terms also include warrant coverage of 625,000 shares at a $6 strike price with a two-year term. The effective date of the transaction is March 1, 2008.
The purchase price was funded with $40.1 million of cash and borrowing capacity available under Teton’s revolving credit facility with JPMorgan and $13.3 million of Teton common stock.
The available borrowing base under Teton’s bank credit facility was increased from $10 million to $50 million as a result of the combination of the added reserves from this transaction, ongoing drilling programs and new hedging positions.
Teton has hedged 80% of the oil proved developed producing (PDP) production and 80% of the natural gas PDP production related to this transaction for five years through a series of costless collars in order to lock in base case economics associated with the acquisition.
