?ABC Funding Inc., Houston, (OTCBB: AFDG) has completed its acquisition of Voyager Gas Corp., Dallas, for $35 million in cash and shares valued at $7 million for a total deal value of $42 million, and changed its name to Cross Canyon Energy Corp.
The deal is valued at $2.59 per thousand cu. ft. equivalent for proved reserves and $1.78 per thousand including probable reserves, according to Cross Canyon.
Voyager assets include approximately 14,300 net contiguous acres in three lease blocks within the Frio and Yegua producing trends in Duval County in South Texas at depths from 4,000 to 7,500 feet. As of April 1, 2008, net proved reserves were 16.2 billion cu. ft. equivalent (5.2 billion proved developed producing; 5.6 billion proved developed nonproducing; 5.4 billion proved undeveloped; 69% gas). Proved plus probable reserves are 23.6 billion equivalent.
Net daily production for August averaged 3 million cu. ft. equivalent. Assets include 15 producing wells, nine drilled behind-pipe opportunities, and six undeveloped and seven probable locations. All wells have multiple-pay potential. The producing area is connected to multiple gas-gathering systems. The company now holds 14,300 net contiguous acres and a reserves-to-production ratio of approximately 10 years.
Cross Canyon funded the deal with $11.5 million from a new revolving credit agreement and a $22-million term-loan agreement. CIT Capital USA Inc. was administrative agent. CIT was given a seven-year warrant to purchase up to 24.2 million shares of Cross Canyon at $0.35 per share.
Robert P. Munn, Cross Canyon chairman and chief executive, says, “The acquisition of Voyager Gas…provides us with a strong operating footprint in a very prolific basin in South Texas. With the acquisition of these properties, Cross Canyon Energy becomes a substantial independent oil and gas company, with the ability to meaningfully grow our production and reserves through a combination of low-risk recompletions and workovers, plus the drilling of undeveloped locations.”

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