-- Companies to host a joint investor call
on December 11, 2024 at 4:30 p.m. ET --
Arcadia Biosciences, Inc.® (Nasdaq: RKDA) and Roosevelt
Resources LP announced today that they have entered into a
definitive securities exchange agreement which, when completed,
will combine the two companies in an all-stock transaction. Under
the terms of the agreement, Arcadia will issue to the partners of
Roosevelt shares of Arcadia common stock at the closing of the
transaction in exchange for all of the equity interests in
Roosevelt. Following the closing of the transaction, the current
equity owners of Roosevelt and the Arcadia shareholders as of the
closing are expected to own approximately 90% and 10%,
respectively, of the outstanding shares of Arcadia, subject to
certain possible adjustments as provided in the definitive
agreement.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20241205151921/en/
Roosevelt Resources LP is a Dallas-based
oil and gas company. (Graphic: Business Wire)
“Since July 2023, Arcadia has been undergoing a strategic review
with external advisors to evaluate the best alternatives for
maximizing shareholder value,” said T.J. Schaefer, president and
CEO of Arcadia. “During that time, we have streamlined our
operations to focus on Zola® coconut water, reduced operating
expenses and generated non-dilutive capital through the sale of our
GoodWheatTM brand and our wheat IP. After a comprehensive and
prolonged review, we have concluded that a business combination
with Roosevelt Resources is the best alternative to create value
for Arcadia and its shareholders.”
Roosevelt is a privately held, Dallas, Texas based exploration
and production company led by industry veteran Elliott “Tony”
Roosevelt, Jr. and his team of experienced oil and gas
professionals with an extensive background in development of major
oil and natural gas projects. Roosevelt’s primary asset is a carbon
capture utilization and storage (CCUS) oil and natural gas project
spanning 16,208 (13,892 net) contiguous acres on the Northwest
Shelf of the Texas Permian Basin that Roosevelt plans to develop
over the next 40+ years as an enhanced oil recovery (EOR) project
reaching an anticipated peak production capacity in 2051 of 55,000
gross barrels of oil equivalent per day (boepd).1
Roosevelt’s Assets and Operations
- Roosevelt’s CCUS project is located within the RR-Googins
field, which is part of the Texas Railroad Commission designated
Platang (San Andres) Field in Yoakum County, Texas and covers 25
square-miles. The planned development of the project is expected to
result in one of the largest CCUS projects in the United
States.
- Roosevelt has commissioned third party studies with respect to
the oil in place in the project which serve as the framework for
the full field development. The most recent model prepared by
Schlumberger estimates 956 million gross technically recoverable
barrels of oil equivalent (boe) over an estimated 70-year life of
the project.2
- Over $82 million has been invested by Roosevelt in the project
to date with a goal of reducing risks relating to the development
plan. Appraisal wells confirming hydrocarbon saturation in the San
Andres reservoir within the RR-Googins field have been on-line
since 2015, and have produced approximately 1.2 million gross boe
since then, with current production of approximately 450 gross
boepd. The internally prepared reserve report of Roosevelt as of
September 30, 2024 using the SEC pricing methodology estimates
proved undeveloped reserves of approximately 780 million gross boe
and proved developed producing reserves of approximately 3.8
million gross boe.
- Roosevelt intends to deploy the use of horizontal drilling to
construct carbon dioxide (CO2) injection wells together with
producing hydrocarbon wells, with the goal of leveraging improved
capital efficiency compared to conventional straight hole drilling
for subsurface CO2 flooding.
- Roosevelt estimates that development costs to complete the
initial CO2 distribution system, drill CO2 injection wells and
complete initial CO2 injection(s) through 2025 will be in the range
of $125 million. Roosevelt’s development anticipates that field
total production will increase an average of approximately 4,000
gross boepd each year for the first ten years after CO2 response,
reaching an anticipated rate exceeding 40,000 gross boepd and
remaining greater than 40,000 gross boepd for over 30 years. It is
anticipated that a peak production rate of approximately 55,000
gross boepd will be achieved for ten years beginning in 2051.
- Roosevelt is currently in discussions with various groups to
source anthropogenic CO2 long-term supply agreements that Roosevelt
believes should result in carbon advantaged oil production as the
project develops.
- The RR-Googins field is transversed by a major CO2 pipeline and
is strategically located approximately 20 miles from existing
infrastructure in the Permian Basin including Denver City, the
world’s largest CO2 hub distributing CO2 from the Cortez, Sheep
Mountain and Bravo CO2 pipelines.
- Roosevelt intends to apply a Miscible Ascending Dispersion
(MAD) method to the field utilizing both natural and anthropogenic
CO2 in seeking to recognize a higher recovery factor compared to
traditional CO2 floods elsewhere in the Permian Basin. The MAD
application currently has a processing patent application pending
that, if granted, would allow Roosevelt to apply the MAD method to
other fields and basins to achieve higher rates of oil
recovery.
About the Proposed Transaction, Management and
Organization
At the closing of the transaction and thereafter, the following
are expected to occur:
- Arcadia will effectuate a change of its corporate name to
Roosevelt Resources, Inc.
- Assuming Nasdaq approval of the company’s application for
continued listing of its shares on the Nasdaq Capital Market, the
company’s shares are expected to trade under a new trading
symbol.
- Current management of Roosevelt will manage the combined entity
with Tony Roosevelt serving as chief executive officer, Jimmy
Hawkins serving as president and chief operations officer, and
Jerrel Branson serving as chief financial officer.
- One or more members of Arcadia management and personnel may
continue to assist in managing the existing on-going operations of
Arcadia.
Elliott “Tony” Roosevelt, Jr., chairman and CEO of Roosevelt
stated, “This asset has been in the Roosevelt Family for over 100
years. Starting in 2007, we started the study and evaluation of the
RR-Googins field to position it for field wide development. Through
the application of technology, drilling and producing oil and
planning and sourcing necessary components for field development,
we believe we are positioned to now execute on this promising
project. This business combination with Arcadia will position us to
continue the next steps in this field development.”
Investor Call
Senior management from Arcadia and Roosevelt will hold an
investor call on December 11, 2024 at 4:30 p.m. ET to discuss key
details and benefits of this transaction. Interested participants
may join the conference call using the following options:
- An audio-only webcast of the conference call will be available,
with a link posted in the Investors section of Arcadia’s
website.
- To join the live call, please register here, and a dial-in
number and unique PIN will be provided.
The related slide presentation will be available in the
Investors section of Arcadia’s website at www.arcadiabio.com and on
Roosevelt’s website at www.rooseveltresources.com.
Timing and Approvals
The transaction is expected to close during the first quarter of
2025 or thereafter, and it is subject to customary closing
conditions and regulatory approvals, including the filing and
effectiveness of a registration statement to be filed by Arcadia
with the Securities and Exchange Commission, approval by the
Arcadia stockholders, at a special meeting of stockholders, of
proposals relating to the proposed transaction, approval by Nasdaq
of the shares to be issued in the transaction and continued listing
of the common stock on the Nasdaq Capital Market, and other closing
conditions.
Transaction Advisors
Lake Street Capital Markets acted as exclusive financial advisor
to Arcadia, and Weintraub Tobin is serving as legal advisor to
Arcadia.
Roth Capital Partners acted as exclusive financial advisor to
Roosevelt, and Jones & Keller is serving as legal advisor to
Roosevelt.
About Arcadia Biosciences, Inc.
Since 2002, Arcadia Biosciences (Nasdaq: RKDA) has been
innovating high-value, healthy ingredients to meet consumer demands
for healthier choices. With its roots in agricultural innovation,
Arcadia cultivates next-generation wellness products. For more
information, visit www.arcadiabio.com.
About Roosevelt Resources, LP
Since 2007, Roosevelt has assembled a proposed carbon capture
utilization and storage (CCUS) project spanning 16,208 gross
(13,892 net) contiguous acres in the Permian Basin planned to be
produced as a CO2 enhanced oil recovery (EOR) project. For more
information visit www.rooseveltresources.com.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains forward-looking statements within
the meaning of the safe harbor provided by Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act
of 1934 and the Private Securities Litigation Reform Act of 1995,
about Arcadia and Roosevelt. Forward-looking statements are all
statements other than statements of historical facts. The words
“anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,”
“estimate,” “probable,” “project,” “forecasts,” “predict,”
“outlook,” “aim,” “will,” “could,” “should,” “would,” “potential,”
“may,” “might,” “anticipate,” “likely” “plan,” “positioned,”
“strategy,” and similar expressions or other words of similar
meaning, and the negatives thereof, are intended to identify
forward-looking statements. Forward-looking statements include any
statements regarding the expected timetable for completing the
proposed transaction, the results, effects, and benefits of the
proposed transaction, future opportunities for the combined
company, future financial performance and condition, guidance. Any
other statements regarding Arcadia’s or Roosevelt’s future
expectations, beliefs, plans, objectives, financial conditions,
assumptions or future events or performance that are not historical
facts are forward-looking statements based on assumptions currently
believed to be valid. Forward-looking statements involve a wide
variety of risks and uncertainties that could cause actual results
to differ materially, and reported results should not be considered
as an indication of future performance. These risks and
uncertainties relating to Arcadia include, but are not limited to,
the risks set forth in filings that Arcadia makes with the SEC from
time to time, including in Arcadia’s Annual Report on Form 10-K for
the year ended December 31, 2023 and other filings that Arcadia has
made with the SEC since that date. Specific forward-looking
statements also include statements regarding Roosevelt’s
technology, Roosevelt’s anticipated development and production
plans, and the ability of Roosevelt to grow production. The risks
and uncertainties relating to Roosevelt include, without
limitation, statements with respect to Roosevelt’s strategy and
prospects; statements about resource potential, expected future
expenditures, production, financial position, business strategy,
revenues, costs, capital expenditures and debt levels.
Forward-looking statements are based on current expectations and
assumptions and analyses made by Roosevelt and its management in
light of their experience and perception of historical trends,
current conditions and expected future developments, as well as
other factors appropriate under the circumstances. However, whether
actual results and developments will conform to expectations is
subject to a number of material risks and uncertainties, including
but not limited to: declines in oil, natural gas liquids or natural
gas prices; the level of success in development and production
activities; adverse weather conditions that may negatively impact
development or production activities; the timing of development
expenditures; inaccuracies of reserve estimates or assumptions
underlying them; revisions to reserve estimates as a result of
changes in commodity prices; risks related to level of indebtedness
and periodic redeterminations of the borrowing base and interest
rates under Roosevelt’s credit facility; Roosevelt’s ability to
generate sufficient cash flows from operations to meet the
internally funded portions of its capital expenditures budget; the
effects of future regulatory or legislative actions; cost and
availability of transportation and storage capacity as a result of
oversupply, government regulation or other factors; and possible
changes in taxation and environmental regulation. The combined
company will have other risks and uncertainties as set forth
below.
In addition, these forward-looking statements involve
significant risks and uncertainties that could cause actual results
to differ materially from those anticipated, including, but not
limited to, the possibility that stockholders of Arcadia may not
approve the issuance of new shares of Arcadia common stock in the
transaction or other proposals that are a condition to the
transaction or that the stockholders of Arcadia and the partners of
Roosevelt may not approve matters relating to the exchange
agreement; the risk that any condition to closing of the proposed
transaction may not be satisfied, that either party may terminate
the exchange agreement or that the closing of the proposed
transaction might be delayed or not occur at all; potential adverse
reactions or changes to business or employee relationships,
including those resulting from the announcement or completion of
the transaction; the diversion of management time on
transaction-related issues; the ultimate timing, outcome and
results of integrating the operations of Arcadia and Roosevelt; the
effects of the business combination of Arcadia and Roosevelt,
including the combined company’s future financial condition,
results of operations, strategy and plans; changes in capital
markets and the ability of the combined company to finance
operations in the manner expected; the risks of oil and gas
activities; and the fact that operating costs and business
disruption may be greater than expected following the public
announcement or consummation of the proposed transaction.
Expectations regarding business outlook, including changes in
revenue, pricing, capital expenditures, cash flow generation,
strategies for our operations, oil and natural gas market
conditions, legal, economic and regulatory conditions, and
environmental matters are only forecasts regarding these
matters.
All forward-looking statements speak only as of the date they
are made and are based on information available at that time.
Neither Arcadia nor Roosevelt assumes any obligation to update
forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements were made or to
reflect the occurrence of unanticipated events except as required
by federal securities laws. As forward-looking statements involve
significant risks and uncertainties, caution should be exercised
against placing undue reliance on such statements.
This press release contains hyperlinks to information that is
not deemed to be incorporated by reference into this press
release.
No Offer or Solicitation
This press release and the information contained herein is not
intended to and does not constitute (i) a solicitation of a proxy,
consent or approval with respect to any securities or in respect of
the proposed transaction or (ii) an offer to sell or the
solicitation of an offer to subscribe for or buy or an invitation
to purchase or subscribe for any securities pursuant to the
proposed transaction or otherwise, nor shall there be any sale,
issuance or transfer of securities in any jurisdiction in
contravention of applicable law. No offer of securities shall be
made except by means of a prospectus meeting the requirements of
the Securities Act of 1933, as amended, or an exemption
therefrom.
Subject to certain exceptions to be approved by the relevant
regulators or certain facts to be ascertained, the public offer
will not be made directly or indirectly, in or into any
jurisdiction where to do so would constitute a violation of the
laws of such jurisdiction, or by use of the mails or by any means
or instrumentality (including without limitation, facsimile
transmission, telephone and the internet) of interstate or foreign
commerce, or any facility of a national securities exchange, of any
such jurisdiction.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED
OR DISAPPROVED OF THE SECURITIES OR DETERMINED IF THIS PRESS
RELEASE IS TRUTHFUL OR COMPLETE.
Additional Information for Stockholders
In connection with the proposed transaction, Arcadia intends to
file materials with the SEC, including a Registration Statement on
Form S-4 (the “Registration Statement”) that will include a proxy
statement/prospectus. After the Registration Statement is declared
effective by the SEC, Arcadia intends to mail a definitive proxy
statement/prospectus to the stockholders of Arcadia. This press
release is not a substitute for the proxy statement/prospectus or
the Registration Statement or for any other document that Arcadia
may file with the SEC and send to Arcadia’s stockholders in
connection with the proposed transaction. INVESTORS AND SECURITY
HOLDERS OF ARCADIA ARE URGED TO CAREFULLY AND THOROUGHLY READ THE
REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS, AS EACH
MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER
RELEVANT DOCUMENTS FILED BY ARCADIA WITH THE SEC, WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
ARCADIA, ROOSEVELT, THE PROPOSED TRANSACTION, THE RISKS RELATED
THERETO AND RELATED MATTERS.
Investors will be able to obtain free copies of the Registration
Statement and proxy statement/prospectus, as each may be amended
from time to time, and other relevant documents filed by Arcadia
with the SEC (when they become available) through the website
maintained by the SEC at www.sec.gov. Copies of documents filed
with the SEC by Arcadia will be available free of charge from
Arcadia’s website at www.arcadiabiosciences.com under the
“Investor” tab.
Participants in the Proxy Solicitation
Arcadia, Roosevelt and their respective directors, partners and
certain of their officers and other members of management and
employees may be deemed, under SEC rules, to be participants in the
solicitation of proxies from Arcadia’s stockholders in connection
with the proposed transactions. Information regarding the officers
and directors of Arcadia is included in Arcadia’s most recent
Annual Report on Form 10-K/A filed with the SEC on April 29, 2024,
including any information incorporated therein by reference, as
filed with the SEC, and its definitive proxy statement for its 2024
annual meeting filed with the SEC on May 16, 2024. Additional
information regarding such persons, as well as information
regarding Roosevelt’s directors, managers and officers and other
persons who may be deemed participants in the proposed transaction,
will be set forth in the Registration Statement and proxy
statement/prospectus and other materials when they are filed with
the SEC in connection with the proposed transaction. Free copies of
these documents may be obtained as described in the paragraphs
above.
1 Estimates of produceable and recoverable hydrocarbons are
dependent on many factors, including the costs of development and
operations, capital expenditures to be made and actual prices
received for oil and natural gas. Estimates of produceable and
recoverable hydrocarbons are not estimates of reserves prepared in
accordance with regulations of the Securities and Exchange
Commission (SEC).
2 Estimates of produceable and recoverable hydrocarbons are
dependent on many factors, including the costs of development and
operations, capital expenditures to be made and actual prices
received for oil and natural gas. Estimates of produceable and
recoverable hydrocarbons are not estimates of reserves prepared in
accordance with regulations of the Securities and Exchange
Commission (SEC).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241205151921/en/
Arcadia Biosciences Contact: Sue Wandell
ir@arcadiabio.com
Roosevelt Resources Contact: Jerrel Branson
jerrel@rooseveltresources.com
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