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Royale Energy Finalizes Merger with Matrix
March 12, 2018
Strasburger & Price, LLP represented Royale Energy, Inc. (OTCQB:ROYL) in its recently completed merger with Matrix Oil Management Corporation. Royale is an independent exploration and production company focused on the acquisition and development oil and natural gas. Northland Capital Markets acted as financial advisor to Royale in the stock exchange transaction.
In the transaction, Royale was merged into a newly formed subsidiary of Royale Energy Holdings, Inc., a Delaware corporation (“New Royale”) and Matrix was merged into a second newly formed subsidiary of New Royale. Additionally, all limited partnership interest of two limited partnership affiliates of Matrix (Matrix Permian Investments, LP, and Matrix Las Cienegas Limited Partnership), were exchanged for New Royale common stock using conversion ratios according to the relative values of each partnership.
All Class A limited partnership interests of another Matrix affiliate, Matrix Investments, LP (“Matrix Investments”) were exchanged for New Royale Common stock using conversion ratios according to the relative value of the Class A limited partnership interests, and $20,124,000 of Matrix Investments preferred limited partnership interests were converted into 2,012,400 shares of Series B Convertible Preferred Stock of New Royale.
Another Matrix affiliate, Matrix Oil Corporation, was acquired by New Royale by exchanging New Royale common stock for the outstanding common stock of Matrix Oil Corporation using a conversion ratio according to the relative value of the Matrix Oil Corporation common stock.
Matrix, a private independent oil and natural gas production company based in Santa Barbara, CA, provides Royale with proved reserves of 9.1 million barrels of oil equivalent (“BOE”) (84% oil) with a PV10 value of $58.8 million based on SEC pricing, according to an internal reserve report. Other highlights of Matrix:
- 10,036 net acres across 14 fields located primarily in California and West Texas
- Approximately 320 BOE per day of net production for the fourth quarter of 2017
- More than 75 proved undeveloped drilling locations across California and West Texas
- Core management team has more than 195 combined years of technical and operating experience
“To execute this complex merger required the skills of a broad group of Strasburger attorneys who worked diligently as a united team to bring this complicated transaction to a close,” said Lee Polson, lead attorney on the transaction at Strasburger. “The expertise and leadership exhibited by this team was crucial to the successful execution of this merger.”
Strasburger attorneys involved in the transaction included:
- Lee Polson
- Debra Gattison Hatter
- Alison Cross
- Jules Brenner
- Katherine David
- Stanley Blend
- Brooks Caston
- Weldon Woodall
- Austin Mercer
Counsel to Matrix in the transaction was Porter & Hedges, LLP.
Click here to read Royale Energy’s official news release.
A premier Texas law firm with a proud history spanning more than 75 years, Strasburger & Price, LLP stands ready to fill the full range of legal needs for Texas-based, middle-market companies, while also performing “run the company” work for national and international clients. With experience in more than 30 practice areas, Strasburger attorneys provide legal advice to a variety of businesses – publicly and privately held companies from start-ups to those in the Fortune 500 – as well as individuals and governmental entities. Strasburger has Texas offices in Austin, Beaumont, Collin County, Dallas, Houston and San Antonio, along with offices in New York City, Washington, D.C. and, as Strasburger & Price, S.C., in Mexico City.