Cygnus Oil and Gas Corporation: Appointment of New CEO and Default on Debt Obligation
09 January 2007 - 9:50AM
Business Wire
Cygnus Oil and Gas Corporation (OTCBB:CYNS) announced today that
the Company has defaulted on the payment of interest on certain of
its senior convertible notes. On April 4, 2006, pursuant to a
Securities Purchase Agreement (�Purchase Agreement�) entered into
on that date between the Company and certain accredited investors
(the "Holders"), Cygnus Oil and Gas Corporation (formerly known as
Touchstone Resources USA, Inc.) ("Company�) issued, among other
things, $22,000,000 aggregate principal amount of its 7.5% senior
convertible notes due April 4, 2009 (�Convertible Notes�)
convertible into shares of the Company�s common stock, subject to
the terms and conditions of the Convertible Notes and the Purchase
Agreement. Under the terms of the Convertible Notes, the Company is
required to periodically pay to the Holders interest accruing with
respect to the Convertible Notes at a rate of 7.5% per year. On
December 31, 2006, the Company failed to make the $412,500 in
interest payments required under the terms of the Convertible
Notes. Following the expiration of the cure period on January 5,
2007, the failure to make such payment of interest results in an
event of default under the terms of the Convertible Notes. As such,
the Holders may now exercise various remedies available to them
under the Convertible Notes, including requiring that the Company
immediately redeem all or a portion of the Convertible Notes at the
current aggregate redemption price of $27,500,000, as set forth in
the Convertible Notes. The Company is in discussions with the
Holders regarding the Convertible Notes. The Company also announced
today that on December 29, 2006, the Company�s Board of Directors
appointed R. Gerald Bennett as Chairman of the Board, President and
Chief Executive Officer to succeed Roger L. Abel who resigned from
these positions effective as of the same date. Mr. Abel will
continue to serve as a director of the Company. Mr. Bennett has
served as a member of our board of directors since November 29,
2005. He has nearly 40 years of experience in the petroleum and
related industries. From July 2000 until March 2005, he served as
President and CEO of Total Safety, Inc., a safety services provider
to the energy industry. From June 1996 until November 1999, he
worked for Equitable Resources, Inc. as President and CEO of ERI
Supply and Logistics where he directed oil and gas exploration,
midstream operations, and wholesale marketing efforts. During his
career, Mr. Bennett has served as President of Enron Gas Services,
Chairman and CEO of Houston Pipeline Company, President and CEO of
Perry Gas Companies, Vice President of Parker Drilling Company, and
Manager of Gas Activities for Conoco, Inc. Mr. Bennett is currently
a Director of the Memorial Hermann Healthcare System Board, a
Texas-based not-for-profit healthcare system, and immediate past
Chairman of the Memorial Hermann Hospital Board. Mr. Bennett is a
graduate of Oklahoma State University with a B.S. and M.S. in
Industrial Engineering and Management, and a graduate of The
Harvard Business School Program for Management Development. With
his appointment as Chief Executive Officer of the Company, Mr.
Bennett resigned as Chairman of the Audit Committee of the Company
effective as of December 29, 2006. At that time, the board
appointed Alfred J. Moran, Jr., currently serving as a member of
the Company's board of directors, to serve as the Company's audit
committee chairman. Mr. Alfred J. Moran is Chairman and Chief
Executive Officer of the Moran Group, LLC, a Value Creation, Crisis
Management and Turnaround consulting firm specializing in
strategic, operational and financial turnarounds and Interim CEO
engagements. For many years he was a Senior Managing Director and
Partner of Kibel Green, Inc., the leading Value Creation, Interim
CEO, Turnaround, Restructure, Strategic Breakthrough consulting
firm in the Western United States. Alfred Moran is a seasoned
Professional Chief Executive Officer and Value Creation Consultant
with over 35�years' experience in building and enhancing
shareholder value for companies ranging in annual sales of
approximately $3.0�Million to approximately $2.3�Billion. He has
been CEO of public and private companies and has provided
professional assistance to the boards and CEOs of many companies in
diversified industries. Mr. Moran has a master of business
administration from the Harvard Business School and a bachelor of
arts degree in Philosophy from the University of North Carolina at
Chapel Hill. He is a Member of World Presidents Organization in
Houston, Texas. As of this time, the Company requires additional
financing to fund its current and planned operations and meet its
capital requirements, to continue operating, exploring and
developing oil and gas properties, and to otherwise implement its
business plan. As such, the Company is searching for alternative
sources of financing. As of the date of this report, the Company
has not obtained such financing, and there is no assurance that the
Company will obtain such financing. In addition to restructuring
its debt obligations, the Company has considered and will continue
to consider the following alternatives, in addition to other
business strategies available to the Company, if the Company does
not secure the additional financing needed to continue its
operations as presently conducted: (i) entering into a business
combination with another company or selling a portion or all of the
Company's assets; (ii) selling at auction certain of the Company's
assets; and (iii) reorganization or liquidation proceedings. ABOUT
CYGNUS OIL AND GAS CORPORATION Headquartered in Houston, Texas,
Cygnus Oil and Gas Corporation is an oil and gas exploration and
production company. Primarily a resource player, its key assets
consist of shale acreage in Woodruff County, Arkansas and McIntosh
County, Oklahoma and it also owns a variety of non-producing assets
in Alabama, Louisiana, Mississippi, and New Zealand. Since August
2005, the Company has made significant changes in its management,
Board of Directors and the nature of oil and gas assets it acquires
to better position itself for future company growth.
FORWARD-LOOKING STATEMENTS This news release contains
forward-looking statements, including, in particular, statements
about Cygnus�s plans and intentions. These have been based on the
Company�s current assumptions, expectations and projections about
future events. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, the
Company can give no assurance that the expectations will prove to
be correct.
Cygnus Oil and Gas (CE) (USOTC:CYNS)
Historical Stock Chart
From Nov 2024 to Dec 2024
Cygnus Oil and Gas (CE) (USOTC:CYNS)
Historical Stock Chart
From Dec 2023 to Dec 2024