Aspen Exploration Corporation (OTC:ASPN) took the unusual step several days ago of making a second announcement regarding the payment of a cash dividend of $0.73 per share to stockholders of record on November 16, 2009. The company initially announced that the dividend would be payable to stockholders of record on November 16, 2009, with the dividend being paid on or about December 2, 2009. The second announcement provides that the Financial Industry Regulatory Authority (FINRA) has advised the company of the operation of Nasdaq Rule 11140(b)(2), which states:
In respect to cash dividends or distributions, stock dividends and/or splits, and the distribution of warrants, which are 25% or greater of the value of the subject security, the ex-dividend date shall be the first business day following the payable date.
This means that the dividend will trade with the stock until December 2, 2009, the payable date. Purchasers on December 3 or later will not be entitled to the dividend.
We’ve been following ASPN (see our ASPN post archive) because it’s trading at a discount to its $1.17 per share liquidation value and there are several potential catalysts in the stock, including a 13D filing from Tymothi O. Tombar, a plan to distribute substantially all of the net, after-tax proceeds from the completion of the Venoco sale to its stockholders ($5.3M), and the possibility that the company will dissolve. The stock is down 1.5% since we initiated the position to close yesterday at $0.983. This values the remaining stub of ASPN at $0.24 ($0.97 less $0.73) against a liquidating value I estimate at $0.44 ($1.17 less $0.73).
Here’s the text of the announcement [via Marketwire]:
DENVER, CO–(Marketwire – November 18, 2009) – Aspen Exploration Corporation (OTCBB: ASPN) viewed what appeared to be unusual market activity yesterday and today in light of its previous announcement of November 3, 2009. That announcement advised the public that a cash dividend of $0.73 per share will be payable to stockholders of record on November 16, 2009, with the dividend being paid on or about December 2, 2009. Notwithstanding the Board’s declaration of a record date, Aspen has been advised by the Financial Industry Regulatory Authority (FINRA) of the application of Nasdaq Rule 11140(b)(2) which states: “In respect to cash dividends or distributions, stock dividends and/or splits, and the distribution of warrants, which are 25% or greater of the value of the subject security, the ex-dividend date shall be the first business day following the payable date.” Persons needing further information or interpretation should consult with their broker-dealer or legal advisors.
[Full Disclosure: I do not have a holding in ASPN. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. Do your own research before investing in any security.]
Greenbackd 
Press release on ASPN merger:
COLORADO SPRINGS, CO — (MARKET WIRE) — 06/28/10 — Dillco Fluid Services, Inc., a provider of oilfield services to the domestic onshore oil and gas industry, today announced it has entered into an Agreement and Plan Of Merger and Reorganization (the “agreement”) with Denver-based Aspen Exploration Corporation (ASPN:…) .
Under terms of the agreement, Aspen will acquire all outstanding shares of privately held Dillco through the issuance of 14,519,244 shares of Aspen common stock to Dillco’s shareholders. Upon completion of the transaction, the holders of Aspen common stock will own approximately one third of the combined company, while Dillco shareholders will own the remaining two thirds. Closing of the transaction, which is expected to take place on or before July 31, 2010, is subject to completion of a fairness opinion, completion of due diligence and final approval of the merger by Aspen’s board of directors, among other conditions.
Following completion of the proposed transaction, Aspen expects to do business under the trade name “ENSERVCO.” Aspen will be 100% owner of Hugoton, Kan.-based Dillco Fluid Services, Inc. and indirectly (through Dillco) 100% owner of Colorado Springs, Colo.-based Heat Waves Hot Oil Service.
Both Dillco and Heat Waves are longtime providers of well-site services to the onshore oil and gas industry. The businesses, which collectively operate an extensive fleet of modern oilfield trucks and equipment, provide hot oiling, frac heating, acidizing, water hauling and well-site construction services to customers throughout the Rocky Mountain region and central United States. In addition, Heat Waves has established a growing presence in the Northeast United States, where customers are operating in the prolific Marcellus Shale. The Company also has plans to begin operations in the Bakken Formation, and is establishing a facility in North Dakota to do so. Customers range from small independents to many of the largest diversified energy companies in the United States.
Mike Herman, Chairman and CEO of Dillco, said, “This planned merger represents a critical step in the advancement of our business plan. As a publicly traded company, we believe we will have additional financial and operational flexibility that will allow us to accelerate certain strategic initiatives. We have enjoyed working with the Aspen board of directors in pursuing this transaction. Their professionalism and knowledge of the energy industry has been very valuable.”
R.V. Bailey, CEO of Aspen, said, “Our board of directors has been actively reviewing a range of business alternatives since the divestiture of our California natural gas assets in June of last year. We believe Dillco’s current operations and growth plans in the oilfield services industry represent a compelling opportunity for our stockholders. We look forward to moving forward with this proposed merger.”
Further information will be made available in additional filings with the Securities and Exchange Commission and in news releases as appropriate. There also is more information in a June 24, 2010, Securities Exchange Commission filing by Aspen on Form 8K.
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Per most recent Proxy:
“* Three directors, Robert A. Cohan, Kevan B. Hensman and Douglas P. Imperato are continuing to evaluate whether they believe the Company can identify
and execute on a business opportunity that may offer long term value to the Company’s stockholders and as such none have yet authorized the Board to
make a recommendation for or against approval of Proposal No. 2.”
“Although the Board did not determine whether dissolution is in Aspen’s best interests at the present time, the Board did determine it is appropriate to
submit the proposal to its stockholders at the Annual Meeting. As such the proposal is being submitted to the stockholders without any recommendation
from the Board of Directors. For further discussion on this issue see page 30 of this Proxy Statement.”
One director, R.V. Bailey, believes that the prospective value of Aspen as a public corporation with a continuous filing record and clean financial statements
exceeds the value of the remaining net assets, and believes that stockholders may benefit by the possibility of making a business acquisition (including a
reverse takeover) that could offer Aspen’s stockholders potential long term value.
Bailey, a ~19% shareholders, is against the liquidation.
As of right now, after the special dividend, there is a high risk that the remaining assets are used to chase after aquisitions instead of making more distributions to shareholders.
Has Greenbackd talked to mgmt or to the activist investor?
Is Greenbackd comfortable that company will end up liquidating instead of continuing to burn cash after $.73 distribution?
Any reason to believe that company will be able to make an accretive acquisiton?
Thank you,
Love the site – keeps pumping out lucrative ideas.
JT
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hey – are you at all worried that despite announced plans to liquidate, management continues to say its looking at other acquisition opportunities? Specifically page 15 says –
Aspen has called a meeting of its stockholders for November 30, 2009, at which time it will present a dissolution proposal for consideration. Notwithstanding the dissolution proposal, Aspen also intends to consider other opportunities in the natural resources industry, which may include an acquisition of assets or business operations, or a merger or other business combination. As we do not intend to limit what types of business opportunities we may pursue, if we identify an appropriate business opportunity it may result in Aspen changing its line of business although Aspen intends to focus its search within the broad scope of the natural resources industry. If Aspen were to dissolve, it would not enter into another business opportunity but would wind up its operations, attempt to settle any outstanding fiscal obligations and distribute its remaining assets to stockholders (if any).
Although Aspen has engaged in preliminary discussions with third parties about various possibilities, none of these discussions have resulted in an agreement that could lead to the conclusion of any future relationship. Depending on the nature of the business opportunities and the related transactions, a future business acquisition may or may not require stockholder approval. If the transaction does not require stockholder approval, the board of directors will be entitled to accomplish the transaction in its discretion, although the board may (but would not be required to) seek an advisory vote of the stockholders.
Do you see it as a low probability event that they would enter a transaction even after the vote on Nov 30 or is it something we should be wary of?
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3Q update:
http://sec.gov/Archives/edgar/data/319458/000100009609000256/aspen10q93009.htm
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