Newspaper article THE JOURNAL RECORD

Alexander Plans Merger; Stock Split Gets Approval

Newspaper article THE JOURNAL RECORD

Alexander Plans Merger; Stock Split Gets Approval

Article excerpt


By Ronda Fears Plans for a merger of Alexander Energy Corp. of Oklahoma City with an unidentified company that would double the size of Alexander Energy were revealed Tuesday at the local company's annual stockholders meeting.

Also, stockholders approved a 1-to-3 stock split designed to boost the value of shares from about $1 a share to $5 a share.

In December, Bob G. Alexander, president, said negotiations to buy Bonray Energy Corp., also of Oklahoma City, were terminated. The two companies had signed a letter of intent five weeks prior. It was referred to as a $9 million deal.

On current merger talks, Alexander said his company has adequate financing to complete the transaction. The identity of the company targeted for the merger was not revealed.

"We've been working on this for some time," he said.

"It would double our revenues, cash flow and net income."

For 1990, Alexander Energy had net income of $739,000, compared to a net loss of $519,000 for 1989. Revenues totaled $7.3 million, up 39 percent from $5.2 million.

Proved reserves were estimated at 6.5 million barrels of oil equivalent at yearend 1990. Alexander said the company replaced 300 percent of production last year.

To accomplish a merger, Alexander said half of the funds needed would be raised through a stock action and the rest with incurred debt.

Hence, the stock split should better position the company for a higher valued energy stock placement. An investment analyst at the meeting encouraged the move.

"It is controversial," Alexander said of the stock split.

"We think it's the proper thing to do. We've kind of get ourselves in a bind here with the penny stock mentality. We hope this is going to get us into a bigger market house."

Presently, and for most of 1990, Alexander Energy stock has been trading at $1. …

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