Item 2.01 Completion of Acquisition or Disposition of Assets.
On October 5, 2021, Viking Energy Group, Inc. ("Viking"), a majority-owned
subsidiary of Camber Energy, Inc. ("Camber" or the "Company"), entered into an
Assignment of Membership Interests (the "Assignment Agreement") with TO Ichor
2021, L.L.C. ("Assignee"), pursuant to which Viking assigned all of its
membership interests in Ichor Energy Holdings, L.L.C. ("Holdings") to the
Assignee, effective October 5, 2021.
Holdings is the owner of all of the membership interests in Ichor Energy, LLC
("Ichor Energy"), which owns all of the membership interests of Ichor Energy LA,
LLC ("Ichor LA") and Ichor Energy TX, LLC ("Ichor TX" and, together with
Holdings, Ichor Energy and Ichor LA, the "Ichor Entities"), which collectively
owned approximately 58 producing wells, 31 salt water disposal wells, 46 shut in
wells and 4 inactive wells as of June 30, 2021. The assets held by the Ichor
Entities were acquired by the Ichor Entities in December 2018 from an affiliate
of the Assignee (the "Original Acquisition").
In connection with the Original Acquisition, Holdings and Ichor Energy entered
into that certain Term Loan Credit Agreement, dated as of December 28, 2018, by
and among Holdings, Ichor Energy, ABC Funding, LLC, as administrative agent, and
the lenders party thereto (the "Term Loan"). The obligations under the Term Loan
are secured by mortgages on the oil and gas leases of the Ichor Entities, a
security agreement covering all assets of Ichor Energy, and a pledge by Ichor
Holdings of all if the membership interests in Ichor Energy. Camber and Viking
are not parties to the Term Loan. Concurrent with the closing of the Original
Acquisition and entrance into the Term Loan in December 2018, Ichor Energy also
entered into one or more hedge contracts with respect to a certain percentage of
the estimated oil and gas production from Ichor Energy's oil and gas assets,
expiring on or about December 28, 2022. The consideration for the conveyance of
the Ichor Entities by Viking was the assumption by Assignee of all of the
obligations associated with the Ichor Entities.
The Assignment Agreement contains a right of first refusal, and provides that if
the Assignee receives an arms-length bona fide offer from any third party to
purchase any of the membership interests in Holdings, such interests shall first
be offered to Viking, and Viking shall have the right, exercisable within thirty
(30) calendar days, to elect to purchase such membership interests upon
substantially the same terms and conditions as are contained in the offer.
The foregoing description of the Assignment Agreement and the transactions
contemplated thereby does not purport to be complete and is subject to, and
qualified by, the full text of the Assignment Agreement, which is filed as
Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by
Item 9.01 Financial Statements and Exhibits.
(a) Pro Forma Financial Information
As previously disclosed in Camber's Current Report on Form 8-K filed on
September 16, 2021, Camber is filing restated financial statements and,
accordingly, is currently unable to provide financial statements giving pro
forma effect to the Assignment Agreement. Camber will provide unaudited pro
forma financial statements giving effect to the transactions under the
Assignment Agreement as of and for the periods required by Regulation S-X on or
about the time that it provides reclassified financial statements.
Please see the Current Report on Form 8-K filed today by Viking, which includes
unaudited pro forma financial statements of Viking as of and for the six months
ended June 30, 2021 and year ended December 31, 2020, in each case giving effect
to the transactions under the Assignment Agreement.
2.1 Assignment of Membership Interests
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