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Legend Oil and Gas to buy Black Diamond Energy

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Staff writer ▼ | February 28, 2015
Legend Oil and Gas has entered into a nonbinding letter of intent (LOI) with Black Diamond Energy Holdings, to purchase 100% of its limited liability company membership interests.
Legend Oil and Gas
Acquisition   The purchase price to be paid is $4.354 million
The purchase price to be paid is $4.354 million, with an initial payment of $1.5 million at closing, and the balance of the purchase price being payable pursuant to a secured promissory note in the principal amount of $2,854,000 due on the first anniversary date of closing, together with 5% interest per annum.

The note will be secured by certain assets of the acquired combined entities. The original founders of Maxxon will also receive newly created Legend perpetual convertible preferred stock with a value of approximately $260,000.

Maxxon was founded in 2012 and has grown from zero revenue to over $10 million in 2014 revenue (unaudited). Maxxon is a last mile trucking company in North Dakota (The Bakken), transporting oil for various companies, many of which are some of the largest oil producing operators in North Dakota.

Its customers include Statoil, Northern Tier Energy (Western Refineries) and Bridger Trading Group.

Maxxon's unaudited net income and EBITDA of over $1.5 million for the year ended December 31, 2014, currently has no debt and as of the same year end had (unaudited) approximately $6 million in total assets (which include cash, receivables and the depreciated value of its rolling stock).

Maxxon began operations in 2012 with six trucks and as of 2015 owns 13 trucks, with additional leases of seven trucks, for a current operational fleet of 20 trucks. The combined Maxxon-Legend management team expects that by June 30, 2015, subsequent to closing of the acquisition by Legend, total trucks in operation will be between 25 to 30 trucks owned and/or operated.