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Related Party Activities
12 Months Ended
Dec. 31, 2016
Related Party Transactions [Abstract]  
Related Party Activities

14. Related Party Activities

Leucadia

On August 2, 2016, LRAI and the Company entered into the Purchase Agreement with Juneau, Leucadia, as guarantor of Juneau’s obligations, the other purchasers party thereto and Jefferies, LLC, in its capacity as the collateral agent for the purchasers, relating to the issuance and sale of (i) up to $49,900,000 aggregate principal amount of Second Lien Notes and (ii) Warrants to purchase up to an aggregate 998,000 shares of the Company’s Class A common stock. Pursuant to the Purchase Agreement Juneau purchased $13,000,000 aggregate principal amount of Second Lien Notes and Warrants to purchase 500,000 shares of Class A common stock. On August 2, 2016, the Company also issued 500,227 shares of Class A common stock to Juneau pursuant in exchange for interests in certain oil and gas assets pursuant to a purchase and sale agreement (the “Purchase and Sale Agreement”). As part of the Purchase and Sale Agreement, the Company entered into a swap of assets of 50% of its interest in the Carter Lake - Wildcat area for 50% of the assets owned by Juneau in the 1,300 net mineral acres.  The Company owned 1,110 net mineral acres (“Swap Assets”) in the Carter Lake - Wildcat area on August 1, 2016.  As further part of the Purchase and Sale Agreement, the Company agreed to commence operations on drilling one (1) Eagle Ford Shale well by December 31, 2016 on Juneau Energy, LLC’s assets or the Swap Assets; and, another Eagle Ford Shale well on Juneau Energy LLC’s assets or the Swap Assets by December 31, 2017.  As of December 31, 2016, the Company had commenced drilling operations of two (2) Eagle Ford Shale wells satisfying the drilling commitment provision under the Purchase and Sale Agreement.

Due to Leucadia’s ownership interests in Juneau, Leucadia is considered to be the beneficial owner of shares Juneau owns. As a result of the Warrants and Class A common stock issuances to Juneau in connection with the Purchase Agreement and the Purchase and Sale Agreement, respectively, Leucadia is the beneficial owner of more than 10% of the Company’s Class A common stock.

In connection with entering into the Purchase Agreement, the Company also entered into a Registration Rights Agreement and an equity commitment agreement, both dated as of August 2, 2016. Pursuant to the Registration Rights Agreement, the Company has agreed to register for resale certain Class A common stock issued or issuable to Juneau and Leucadia, including those issuable upon exercise of the Warrants. Leucadia has agreed, pursuant to the equity commitment agreement, to purchase a certain number of Class A common stock equal to (a) $20,000,000 (or such lesser amount as the Company requests) divided by (b) the offering price to investors in a registered public offering of securities that is completed on or before December 31, 2016.  On December 22, 2016 Leucadia purchased 3,478,261 shares of Class A voting common stock (costing $20,000,000), thus satisfying the equity commitment. In connection with Leucadia’s commitment, the Company agreed to pay Leucadia a fee equal to $1,000,000, payable upon the closing of such offering.  This amount was recorded in accounts payable in the consolidated balance sheet at December 31, 2016.  This amount was paid on January 3, 2017.

EF Realisation

On October 26, 2016, the Company entered into a Board Representation Agreement (“Board Representation Agreement”) with EF Realisation. Under the Board Representation Agreement, for as long as EF Realisation owns 15% or more of the issued and outstanding shares of our Class A common stock, it has the right to nominate up to, but no more than, two directors to serve on our Board of Directors and for as long as EF Realisation owns at least 10% but less than 15% of our issued and outstanding shares of Class A common stock, it has the right to nominate up to, but no more than, one director to serve on our Board of Directors.

On October 26, 2016, the Company entered into a Registration Rights Agreement with EF Realisation, pursuant to which we agreed to register for resale Class A common stock held by EF Realisation. We have agreed to file a registration statement providing for the resale of Class A common stock held by EF Realisation no later than the earlier of (i) October 26, 2017, and (ii) 30 days after the date we first become eligible to file a registration statement on Form S-3. We have also granted EF Realisation certain piggyback and demand registration rights.

Frank D. Bracken III and Thomas H. Olle

In April 2014, the Company loaned $539,000 in total to Frank D. Bracken, III and Thomas H. Olle to assist with their tax obligations as a result of stock compensation awarded to them in 2013.  The loans were on arms-length commercial terms and were settled in full in January 2016.

Dr. Christopher Rowland

Butterfly Flaps, Ltd, a company in which Dr. Christopher Rowland (a director of the Company) owns an interest, has performed consultancy work for the Company since 2013 covering various strategic, tax structuring and investor matters at a cost of approximately $25,000 per quarter.  In July 2016, the Company issued 2,500 shares of Class B non-voting common stock to Butterfly Flaps, Ltd. The shares were issued for services to be performed by Butterfly Flaps, Ltd. in 2017.

Daniel R. Lockwood

New Tech Global Ventures, LLC, a company in which Daniel R. Lockwood (a director of the Company) owns a limited partnership interest, has provided field engineering staff and consultancy services for the Company since 2013. The total cost for such services was approximately $665,000 and $938,000 for the years ended December 31, 2016 and 2015, respectively. 

Mitchell Wells

Mitchell Wells, who served as our director since December 2014 until his resignation in January 2017, has provided consultancy services as our Company Secretary since January 2013. These services have been provided through BlueSkye Pty Ltd, for which Mr. Wells is the sole Director and shareholder. BlueSkye Pty Ltd was paid approximately $95,000 and $142,500 for the years ended December 31, 2016 and 2015, respectively.  He has not received any additional compensation for his service as a Director.