ADB Admiral Bay Resources Inc.

Admiral Bay Resources Inc. (TSX VENTURE:ADB) ("Admiral Bay" or the "Company")
today announced the completion of the foreclosure proceedings previously
disclosed. As a result, Admiral Bay and its former lenders agreed to settle its
debt obligations by ceding certain corporate assets in exchange for forgiveness
of approximately $42.5 million in debt and a fund established by lenders to
satisfy outstanding trade obligations. 


Upon completion of the foreclosure, Admiral Bay is debt free, has positive
working capital and retains its Ft. Scott Property in Bourbon County, Kansas. As
of July 31, 2009, Ft. Scott had proved reserves of approximately 4.2 Bcf and is
presently producing approximately 50 Mcfgpd. The Company has also retained a 25%
working interest in the Revloc Project located in Cambria County, Pennsylvania.


While the foreclosure process eliminated all of Admiral Bay's outstanding debt,
it also significantly reduced cash flow limiting the Company's current ability
to develop and expand production. As a result of the foreclosure, Admiral Bay's
field personnel were transferred to the lender's entity operating the foreclosed
assets. In addition, the Company will likely eliminate key financial personnel
upon conclusion of the annual meeting in September. 


The foreclosure exchanged Company proved reserves of approximately 45 Bcf (as of
July 31, 2009) of natural gas for the forgiveness of approximately $42.5 million
in debt as well as a fund to satisfy the Company's other credit obligations. The
foreclosed assets had net, after royalty, production in the quarter ended April
30, 2010 of approximately 2,400 Mcfgpd and is over 50% undeveloped. With the
transfer of assets in the foreclosure, the Company also mitigated its future
plugging and abandonment liability. The Company also provided the lenders with a
warrant to purchase up to 17.5% of the common equity of Admiral Bay at a fixed
price of approximately $0.039 (CDN) per share over the next five years. 


As a result of the foreclosure action, Admiral Bay has significantly increased
its financial flexibility with a host of options available to attempt to
increase shareholder value. The Company is considering a number of strategic
options including the sale of additional assets, the purchase of or combination
with other oil and gas assets to create a company with additional scale and
growing the Company through intrinsic drilling and development of existing
assets. Some options may require the Company to seek additional capital. While
all of these alternatives are available and being reviewed by the Company, there
are no guarantees the Company will be successful in executing on new strategic
initiatives. 


"Given the anemic gas price environment, especially in the Cherokee Basin, and
the economic morass that has acutely impacted the energy exploration industry,
this result - while personally disappointing - is among the best outcomes
available to Admiral Bay stakeholders," said Admiral Bay Chief Executive Officer
Steve Tedesco.. "The ability to eviscerate over $42 million in secured debt and
satisfy our trade creditors without a formal bankruptcy allows Admiral Bay to
keep a core asset and consider a number of options to rebuild shareholder value,
a task on which management and the Board of Directors are keenly focused." 


About Admiral Bay Resources

Admiral Bay Resources Inc. (www.admiralbay.com) is an unconventional gas
production company focused on the development of projects in the Cherokee Basin
in southeast Kansas and the Appalachian Basin in Pennsylvania. Admiral Bay is
listed on the TSX Venture Exchange under the symbol ADB.


Statements in this release that are not historical facts are "forward-looking
statements" within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995. Readers are cautioned that any such statements are not guarantees
of future performance and that actual developments or results may vary
materially from those in these "forward-looking statements".

Admiral Bay Resources Inc. (TSXV:ADB)
Historical Stock Chart
Von Jun 2024 bis Jul 2024

Admiral Bay Resources Inc. (TSXV:ADB)
Historical Stock Chart
Von Jul 2023 bis Jul 2024