GMX aims for up to $120 million of new liquidity with exchange offer

By Aleesia Forni

Columbus, Ohio, Nov. 3 - GMX Resources Inc. announced that it has entered into an exchange offer to tender its supporting holder's existing notes, which will create $100 million to $120 million in new liquidity and will ensure the company's ability to fund its capital expenditure requirements through 2013.

"As a result of this financing, we are able to monetize our hedges, which have increased in value since Q3 and are now worth a price of $16.6 million," the company's president, Michael Rohleder said during the call.

"We expect to sell the hedges as early as next week."

"GMXR's objectives for the second half of 2011 have been to increase our liquidity in order to fund our transformation of our company's operations into oil liquids drilling programs," chief executive officer Ken L. Kenworthy said during the company's third-quarter earnings conference call on Thursday.

Due to a backstop feature, this transaction ensures that the company will have at least $100 million in new capital at the closing, which is expected by mid-December.

The company expects to have the offering memorandums out for the exchange no later than Nov. 15.

GMX is an Oklahoma City-based oil and natural gas company.

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