Glori Energy Provides Update On Its Financial Condition
and Outlines Plan to Sell Assets
HOUSTON, January 26, 2017 -- Glori Energy Inc. (OTCQB: GLRI), an oil production company with a
proprietary technology to increase oil recovery, today outlined a plan to divest certain assets to enable
the Company to meet current and upcoming financial obligations.
As previously disclosed in recent filings with the U.S. Securities and Exchange Commission (the SEC),
the significant risks, uncertainties, a significant working capital deficit, historical operating losses and
resulting cash used in operations raised substantial doubt about the Company's ability to continue as a
going concern. The Company also disclosed in its most recent quarterly filing with the SEC that it did not
have lines of credit available to it, and as a result of its negative operating cash flows and resulting
decrease in cash, it would need to raise additional capital in the fourth quarter of 2016 in order to continue
to fund its operations.
As of this date, Glori has been unsuccessful in securing additional funding. As a result, the Company’s
focus is on eliminating its term debt, reducing costs to the absolute minimum, including the termination
of non-critical staff, and selling assets to maximize cash for its creditors and potentially its stockholders.
First, Glori Energy Production, Inc. (GEP), a wholly-owned subsidiary of the Company, is finalizing
arrangements with the lender of its $9.9 million term loan for the lender to assume ownership and
operatorship of GEP’s producing oil properties, which collateralize the loan, in satisfaction of all amounts
due under the term loan facility which matures March 14, 2017. Since its oil price swaps expired in
December 2016, costs associated with GEP’s oil and gas assets together with debt service requirements
result in losses from operations. This transaction includes the Coke and Bonnie View fields in Texas.
Secondly, Glori is proceeding to dispose of its assets to enable it to meet its obligations, principally to its
trade creditors. As part of this effort, the Company recently completed the sale of certain non-producing
lease acreage and related intangible assets in an abandoned oil field. Glori received cash for the acreage
and related intangible assets and will receive a net profits interest from future revenues, if any, generated
by the buyer from this field.
Additionally, Glori intends to market for sale or license the intellectual property related to its AERO
microbial enhanced oil recovery technology as well as other fixed assets previously associated with its
AERO Services business. Glori intends to seek partners, licensees, or buyers for this proprietary
enhanced oil-recovery technology.
The Company has reduced its operations and recently reduced staff to skeleton levels necessary to
implement its wind-down and asset sales program. Additionally, reflecting the Company’s reduced
activities, this month, Michael Pavia, Chief Technology Officer, and Ken Nimitz, SVP of Operations,
resigned from their respective positions.
Based on these actions, the only revenues Glori expects to receive would be from the sale or licensing
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of its technology and from its net profits interest, if any, from the redeveloped abandoned oil field that
was recently sold. The Company intends to dedicate available cash to meet its obligations to its creditors.
Accordingly, disposition of the Company’s oil and gas assets and its proprietary AERO technology will
result in the termination of continuing operations and, future returns to stockholders, if any, will arise from
revenues generated from the net profits interest received from the sale of non-producing acreage and
revenues received from the sale of the Company’s intellectual property. No purchasers have expressed
an interest in the Company’s intellectual property and no assurance can be made of the amount of
proceeds, if any, which will be received for such sale.
These measures follow a stringent cost reduction and operating efficiency program implemented in
stages over the last two years in response to the rapid and precipitous fall in crude oil prices. This included
reductions in staffing, and third-party services and minimizing capital expenditures. The crude oil price
drop made it difficult to execute on its strategy of acquiring producing properties that would have
contributed to its cash flows. The decrease in oil prices also adversely impacted the Company’s AERO
service business as the E&P industry dramatically cut spending.
As the Company previously reported, the oil price environment negatively affected the availability of
capital to Glori and the exploration and production industry in general, and it also resulted in a dramatic
decrease in the Company’s stock price, which impacted its ability to access capital markets to fund its
operations.
The significant risks, uncertainties, significant working capital deficit, historical operating losses and
resulting cash used in operations continue to raise substantial doubt about the Company's ability to
continue as a going concern. For more information, see “Note 3 - Liquidity Considerations and Ability to
Continue as a Going Concern” in our Quarterly Report on Form 10-Q for the quarter ended September
30, 2016.
As previously reported on September 30, 2016, Glori Energy delisted its common stock from the
NASDAQ stock exchange and began trading on the OTCQB over-the-counter market. On January 24,
2017, the Company filed a Certification and Notice of Termination of Registration on Form 15 with the
SEC which is a notice of suspension of duty to file reports under the Securities Exchange Act of 1934,
indicating that it will no longer be an SEC reporting company. The Company will continue trading on the
OTC.
ABOUT GLORI ENERGY INC.
Glori Energy is a Houston-based oil production company that deploys its proprietary AERO technology
to increase the amount of oil that can be produced from conventional oil fields. Glori owns and operates
oil fields onshore U.S. and additionally provides its technology as a service to E&P companies globally.
Only one-third of all oil discovered in a typical reservoir is recoverable using conventional technologies;
the rest remains trapped in the rock. Glori's proprietary AERO System recovers residual oil by stimulating
a reservoir's native microorganisms to sustainably increase the ultimate recovery at a low cost. For more
information, visit www.GloriEnergy.com.
FORWARD LOOKING STATEMENTS
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions
of the U.S. Private Securities Litigation Reform Act of 1995. Any statements contained herein which are
not statements of historical fact may be deemed to be forward-looking statements, including, without
limitation, statements identified by or containing words like “believes,” “expects,” “anticipates,” “intends,”
“estimates,” “projects,” “predicts,” “potential,” “target,” “goal,” “plans,” “objective,” “should,” “could,” “will,”
or similar expressions. All statements by us regarding our possible or assumed future results of our
business, financial condition, liquidity, results of operations, plans for sale of assets, ability to reach
satisfactory arrangements with our senior lender regarding the return of assets, the identification of
potential purchasers and successful sale of our intellectual property, plans and objectives and similar
matters are forward-looking statements. Glori gives no assurances that the assumptions upon which such
forward-looking statements are based will prove correct. Forward-looking statements are not guarantees
of future performance and involve risks, uncertainties and assumptions (many of which are beyond our
control), and are based on information currently available to us. Actual results may differ materially from
those expressed herein due to many factors, including, without limitation: factors as are discussed in
Item 1A “Risk Factors” and Item 7 “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in our Annual Report on Form 10-K for the 2016 fiscal year and our subsequent
Quarterly Reports on Form 10-Q for 2016. Although Glori believes that the expectations reflected in such
forward looking statements are reasonable, it can give no assurances that such expectations will prove
to be correct. These risks are more fully discussed in Glori’s filings with the Securities and Exchange
Commission. Glori undertakes no obligation to update any forward-looking statements contained herein
to reflect events or circumstances, which arise after the date of this document except as required by law.
Glori Energy Contact
Victor M. Perez
Chief Financial Officer
713-237-8880
[email protected]
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