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HOUSTON, TX / ACCESSWIRE / August 27, 2020 / On August 27, 2020, PEDEVCO Corp. (NYSE:PED) ("PEDEVCO" or the "Company") issued a status update regarding the August 26, 2020 open letter delivered by the Company to The Bank of New York Mellon Trust Company, N.A., as trustee of the SandRidge Permian Trust (NYSE:PER)(the "Trustee" and the "Trust"), the common unit holders of the Trust (the "Unit Holders"), and Avalon Energy, LLC ("Avalon") as a holder of Trust common units and the operator of the assets underlying the Trust, regarding PEDEVCO's interest in a potential acquisition of all the common units of the Trust (the "Trust Units"), its underlying assets, and operatorship thereof, which open letter was included in the Company's press release filed on August 26, 2020 (the "August 26th Press Release").
Subsequent to the Company's delivery of its initial indication of interest to the Trustee, on August 26, 2020, the Trustee notified the Company that its authority as Trustee is limited to taking actions in furtherance of achieving the purposes of the Trust as set forth in the Trust's trust agreement, and, as a result, the Trustee is not authorized to enter into an arrangement with an offeror with respect to a negotiated exchange offer or tender offer for the outstanding Trust Units, or to express support for any such offer, and, accordingly declined to enter into discussions with the Company regarding the proposed transactions contemplated by the Company's indication of interest. Notwithstanding such response, the Company promptly requested that the Trustee engage in discussions with the Company regarding communication of the Company's indication of interest to the Unit Holders, receipt of a Unit Holder list to facilitate such communication by the Company, and to discuss working together to extend the Trust's pending delisting deadline from the New York Stock Exchange. To date, the Company has not received a response to such request from the Trustee. Accordingly, although the Trustee has stated that it has no authority to enter into an arrangement with the Company or to negotiate such arrangement, the Company has continued to request that the Trustee engage in discussions with the Company regarding its indication of interest and in furtherance of a potential transaction, to the extent permitted by the Trust's trust agreement and consistent with the Trust's duties to the Unit Holders.
In addition, the Company is aware that Montare Resources I, LLC ("Montare") announced today that it has entered into an agreement with Avalon and its affiliates (a holder of 25% of the issued and outstanding Trust Units and the operator of the assets underlying the Trust) regarding Avalon's ownership of its Trust Units, 100% of the working interests underlying the overriding royalty interests owned by the Trust, and all other related assets used in connection with operating the underlying properties related thereto. As stated in the public announcement, "Avalon Energy has agreed, subject to the satisfaction of certain conditions, to contribute all of its Units and its other Trust related assets to Montare and has granted Montare an irrevocable proxy to vote its Units. Avalon has also granted exclusivity to Montare with respect to any transaction involving Avalon and/or the Trust, and has agreed to support Montare's acquisition of the Trust (either by merger, acquisition of assets, acquisition of the remaining Units not owned by Avalon or otherwise) and not to take any action that is detrimental to or hinders Montare's ability to consummate an acquisition of the Trust." Given this new information regarding Avalon and its exclusive arrangement with Montare, the Company plans to attempt to engage in direct discussions with both Avalon and Montare regarding the Company's prior indication of interest relating to the potential acquisition of all the Trust Units, its underlying assets, and operatorship thereof.