UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 15, 2008
ISRAMCO, INC.
(Exact name of registrant as specified in its charter)
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Delaware 0-12500 13-3145265
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
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11767 KATY FREEWAY, HOUSTON, TX 77079
(Address of principal executive offices, including Zip Code)
713-621-3882
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act(17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On February 15, 2008, Jay Petroleum, LLC ("Jay Petroleum"), a subsidiary of
Isramco Inc. (the "Company"), entered into Purchase and Sale Agreements (the
"Agreements") with GFB Acquisition - I, L.P. ("GFB") and Trans Republic
Resources, Ltd. ("Trans Republic," and, together with GFB, the "Sellers")
pursuant to which Jay Petroleum agreed to purchase the Sellers' interests in
certain oil and gas properties located in Texas, New Mexico and Oklahoma for an
aggregate purchase price of approximately $102 million (the "Purchase Price").
The transaction includes mainly operated oil and gas properties in approximately
40 fields (approximately 490 Leases) in East Texas, Texas Gulf Coast, Permian,
Anadarko and San Juan Basins. Significant fields are the Alabama Ferry Field in
East Texas, the Bagley Field in West Texas and New Mexico, and the Esperson Dome
Field on the Texas Gulf Coast. Net daily production from the properties is
approximately 600 Barrels of oil and 3.5 MMCF. Based on a third party consulting
firm that has performed a reserve report as of January 1, 2008, total net proved
developed producing reserves are approximately 2.7 million barrels of oil and 14
BCF of natural gas. Contemporaneously with the execution of the Agreements, the
Company paid to GFB a deposit of approximately $10 million (the "Deposit"). The
final Purchase Price is subject to adjustment, as specified in the Purchase
Agreement. The closing of the transaction is expected to be on March 25, 2008 or
on April 2, 2008 at Sellers' discretion, subject to certain closing conditions
specified in the Agreements.
In the event that the specified closing conditions are not satisfied, then
either Jay Petroleum or the Sellers may terminate the Agreements and the Deposit
may or may not be returned to the Company depending upon the circumstances which
led to the failure to satisfy the closing conditions. Assuming the transaction
is consummated in accordance with the terms of the Agreements, the Deposit will
be credited towards the Purchase Price.
The Company anticipates that it will fund up to 5% of the Purchase Price from
working capital, and that it will obtain third party loans to fund the rest of
the Purchase Price. In connection with the entry into the Agreements, on
February 15, 2008, the Company and the Bank of Novia Scotia entered into a
Commitment Letter pursuant to which the bank agreed to provide or arrange a
secured revolving credit facility, subject to the execution of customary loan
documents and other customary closing conditions for transactions of this type.
Under such credit facility, it is anticipated that the Company will be able to
initially borrow up to $54 million.
The Company has entered to a swap agreement with the bank to sell 605,016
barrels of oil during 48 months commencing April 1, 2008 and 3,424,348 MMBTU of
gas during 48 months commencing April 1, 2008.The average oil price is $90.01
per barrel and the average gas price is $8.51 per MMBTU.
The press release announcing the signing of the Purchase Agreement is included
as Exhibit 99.1 to this Current Report and is incorporated herein by reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits:
99.1 Press Release dated February 22, 2008.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATED: February 22, 2008 ISRAMCO, INC.
BY: /s/ Haim Tsuff
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HAIM TSUFF
CHIEF EXECUTIVE OFFICER