Ecoark Holdings, Inc. Completes Acquisition of Energy AssetsPosted on June 16, 2020
Acquired assets expected to deliver attractive payback and achieve a production rate of 1,000 barrels of oil per day by the end of the third quarter of 2020
Reiterating commitment to value creation and growing via multi-industry holding company strategy
Exploring a potential near-term uplist to a national exchange
FRISCO, Texas, June 11, 2020 (GLOBE NEWSWIRE) — Ecoark Holdings, Inc. (“Ecoark”) (OTC: ZEST), announced that it has completed an acquisition of certain energy assets from an energy company, whose identity will be released in the future, in the process of bankruptcy reorganization. The all-cash transaction, with a projected short-term payback, includes the transfer of 262 total wells in Mississippi and Louisiana, approximately 9,000 acres of active mineral leases, and significant drilling and production materials and equipment. The 262 total wells include 57 active producing wells, 19 active disposal wells, 136 shut-in with future utility wells, and 50 shut-in pending plugging wells. Included in the assignment are four wells in the Tuscaloosa Marine Shale (“TMS”) formation. The acquired assets are expected to achieve a production rate of 1,000 barrels of oil per day (“BOPD”) by the end of the third quarter of 2020 when considering the acquired asset’s current production, planned production, and planned re-entry projects.
“We are excited to complete this highly opportunistic transaction as we grow our asset portfolio and extend our industry diversification strategy while maintaining a consistent and intense focus on value creation,” said Randy May, Chairman Chief Executive of Ecoark. “This transaction is a continuation of our recent acquisition of the energy assets of Banner Midstream and our ongoing focus on growing through select energy investments to further strengthen our position as a holding company and support our long-term success. The current energy landscape is providing resourceful companies like Ecoark with access to deal flow and unique prospects to selectively invest in the long-term success of domestic energy markets at a highly opportunistic time. We remain committed to expanding Ecoark’s energy portfolio and are currently evaluating the potential acquisition of other high-quality assets under bank or credit ownership.”
“To maximize the value of our latest acquisition, we plan to immediately deploy our existing workover rigs to re-enter some of the shut-in with future utility wells with the most immediate expected production impact and highest economic returns,” said Brad Hoagland, CFA, Principal Financial Officer of Ecoark. “We expect that these actions focused on advancing our production profile, combined with modest additional investments, will generate approximately six-month payback on the growth capital deployed. The current positive free cash flow generated from the acquired active producing wells and the minimal capital expenditure estimated to bring additional production wells back online is expected to drive further improvement in Ecoark’s overall profitability. As commodity price volatility subsides and we establish a reliable production baseline, we will explore implementing hedging instruments to efficiently manage risk and consider initiating earnings guidance for our energy operations.”
“With the actions we have taken to date, Ecoark has advanced its position as a growth-oriented, opportunistic holding company,” continued Mr. May. “Today, we maintain a portfolio of three active, wholly-owned operating subsidiaries spanning a range of sectors including technology, financial services, and energy. We remain fully committed to each of our operating businesses and believe that each business will drive value creation through our diversified industry strategy.”
“We have analyzed the various standards to uplist to a national exchange and feel that the company currently unequivocally exceeds, or can exceed, all minimum criteria,” continued Mr. Hoagland. “We are working diligently to complete the filing of our March 31, 2020 Form 10-K and will immediately initiate the various steps to uplist upon the completion of that filing.”
About Ecoark Holdings, Inc.
Founded in 2011, Ecoark is a diversified holding company. The company has three wholly owned subsidiaries: Zest Labs, Inc. (“Zest Labs”), Banner Midstream Corp (“Banner Midstream”) and Trend Discovery Holdings (“Trend Discovery”). Zest Labs, offers the Zest FreshTM solution, a breakthrough approach to quality management of fresh food, is specifically designed to help substantially reduce the $161 billion amount of food loss the U.S. experiences each year. Banner Midstream is engaged in oil and gas exploration, production, and drilling operations on over 20,000 cumulative acres of active mineral leases in Texas, Louisiana, and Mississippi. Banner Midstream also provides transportation and logistics services and procures and finances equipment to oilfield transportation services contractors. Trend Discovery invests in a select number of early stage startups each year as part of the fund’s Venture Capital strategy; we are open-minded investors with a founder-first mentality. Trend Discovery LP has an audited track record of uncorrelated outperformance of the S&P 500 since inception.
Forward Looking Statements
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