Herb Mee, Jr., president of The Beard Co., Oklahoma City, (Pink Sheets: BRCO) reports that the company has made considerable progress under its Restructuring Plan, which was announced at year-end 2010.
Progress on Restructuring Plan
On December 31, 2010, the board elected to make some radical changes and cost reductions under a major Restructuring Plan. The directors appointed Scott Brown, one of the company's directors, as restructuring consultant, giving him authority to reduce costs and make restructuring decisions for a period of two to four months. Under his guidance, significant progress has been made to date under the Plan:
- On December 22, 2010, The Beard Co. made the final payment to complete the purchase, effective May 1, 2010, of an additional 7.53571% BPO working interest (3.01428% APO working interest) in the Dilworth Field. The purchase was announced on June 7, 2010.
- On December 30, 2010, The Beard Co. filed to delist the company's common stock and suspend our duty to file reports with the Securities and Exchange Commission, reducing its annual legal and accounting expenses by an estimated $300,000 or more.
- Since January 1, 2011, the company has:
- Through a reduction in force, reduced general and administrative expenses by approximately 35%.
- Eliminated all management perks.
- Adopted a Deferred Stock Compensation Plan to promote ownership by officers and directors of a greater proprietary interest in the company while conserving cash
- Worked diligently with the largest outside WI owner in the Dilworth Field and made sure they had a clear understanding of the Restructure and what the company is trying to accomplish
- Revised/revamped its organizational structure and implemented an employee evaluation process for both The Beard Co. and Beard Oil Co.
- Updated the BRCO Website to focus on its oil and gas operations.
- On March 11, 2011, the company closed on a $2,500,000 loan from a Miami Beach-based LLC to purchase equipment in the Dilworth Field that had previously been leased from Schlumberger and Rentzel:
- By exercising its options to purchase this equipment, the company reduced the lease operating expense in the field by approximately $204,000 per month ($35,770 per month to the company)
- On May 3, 2011, the company completed the sale of most of Beard Technologies Inc.'s (BTI) assets to a Coral Gables-based LLC. The company expects to complete the sale of BTI's remaining assets by June 30, 2011
The company estimates that the total annualized savings from the cost reductions implemented to date amount to approximately $1.284 million.
The board was favorably impressed with the progress made under Scott Brown's leadership and direction, and on April 1, the company elected him as interim chief executive.
Dilworth Field
The Beard Co.'s primary asset is its share of the Dilworth Field oil and gas project in northern Oklahoma. The company's wholly owned subsidiary, Beard Oil, is operator of the field. By making the final payment on December 22, 2010, on the interest purchased effective May 1, 2010, the company's WI in the field remained at the previously announced figures of 17.53571% before payout (BPO) and 17.01428% after payout (APO). As a result of the purchase announced on August 24, 2010, by Beard Dilworth LLC of an additional 7.53571% BPO WI (3.01428% APO W.I.), the company's WI in the field, after the partners in the LLC have recouped their $900,000 investment, will increase to 21.30356% BPO (18.52142% APO).
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