Toreador Resources Corp., (Nasdaq: TRGL) says it has developed a plan to cut overhead, divest non-core assets, reduce debt and improve its core operations in France and Hungary in response to concerns expressed by shareholder Nanes Balkany Partners LLC.
Following the January settlement with Nanes Balkany, Toreador’s board of directors undertook a two-step initiative to create a new corporate platform to improve operational and financial performance and develop a three-year strategic plan to be rolled out by its annual shareholder meeting on June 4. The plan also includes moving Toreador’s headquarters to Paris.
The platform is a response to Toreador’s significant near-term debt obligations with net debt of approximately $97 million. Under the new corporate platform, Toreador has closed the $55-million sale of a 26.75% interest in the South Akcakoca Sub-Basin to Petrol Ofisi and retained Stellar Energy Advisors, London, to manage an open-bid process to sell its remaining 10% interest in the sub-basin, in addition to its onshore production and 2.916 million net acres in exploration licenses that are currently held and 1.085 million net acres that are pending approvals. Proceeds of the Petrol Ofisi sale will be used to repay Toreador’s outstanding balance, effectively closing the facility.
Also a part of the platform, a share buyback program has been adopted by the board of directors for the repurchase of up to 1 million common shares of Toreador over the next 12 months. Toreador also says it will buy back a portion of convertible bonds.
Toreador says its current Dallas headquarters cost it more than $7 million a year in overhead, and with its operations located in Europe, it says moving its headquarters to Paris will improve its efficiency. The move should be completed by July and will result in a reduction in its U.S. presence to focus only on securities exchange requirements and investor relations.
The company is drilling a high-impact exploration well on the Tompa Block in Hungary, with results expected by early second-quarter 2009. Toreador says the Paris Basin will remain its core asset, with current production of approximately 1,000 net barrels per day.
Toreador chief executive officer Craig M. McKenzie says, “This year we will focus on what we can control and build credibility through delivery of our 2009 platform priorities and development of a three-year strategic plan. With the full support of the board of directors, we are drastically reshaping the way this company is managed so that shareholders will have the ability to benchmark both our progress and our commitment to creating superior shareholder returns.”
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