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Yuma Energy, Inc. (NYSE MKT:YUMA) and privately held Davis Petroleum Acquisition Corp. agreed to merge in an all-stock transaction. At closing Davis Petroleum shareholders will own over 61% of the combined company, while Davis will become a wholly owned subsidiary of Yuma. On Friday, Feb. 12, the date of the announcement of the deal with Davis Petroleum, Yuma’s stock rose 31.58%, closing at $0.25 per share, and its total market capitalization reached $16.5 million. Davis Petroleum is a Houston, Texas-based oil and gas company focused on acquisition, exploration and development of domestic oil and gas properties. Davis Petroleum’s company-operated properties are conventional fields located onshore in south Louisiana and the upper Texas Gulf Coast, and its non-operated properties include Eagle Ford and Eaglebine properties in east Texas. Over 90% of the common stock of Davis Petroleum Acquisition Corp. is owned by entities controlled by or co-investing with Evercore Capital Partners LP, a unit of Evercore Partners Inc. (NYSE:EVR), Red Mountain Capital Partners, and Sankaty Advisors, an affiliate of Bain Capital, who purchased Davis Petroleum Corp. for $150 million from the family of Marvin H. Davis in March 2006, upon emergence of a pre-packaged bankruptcy filing. The late Marvin H. Davis (1925-2004) was an American industrialist, philanthropist, and notorious corporate raider who made his fortune as the chairman of Davis Petroleum and at one time owned 20th Century Fox, the Pebble Beach Corporation, the Beverly Hills Hotel, and the Aspen Skiing Company. Yuma Energy is a Houston, Texas-based oil and gas company focused on the exploration for, and development of, conventional and unconventional oil and gas prospects. Yuma has employed a 3-D seismic-based strategy to build a multi-year inventory of development and exploration prospects. Yuma’s current operations are focused on onshore central Louisiana, where Yuma is targeting the Austin Chalk, Tuscaloosa, Wilcox, Frio, Marg Tex and Hackberry formations. In addition, Yuma has a non-operated position in the Bakken Shale in North Dakota and has operated positions in Kern and Santa Barbara Counties, California. Yuma Energy was founded in 1983 by Sam L. Banks, its majority owner, chairman, president and CEO. He previously served as assistant to the president of Tomlinson Interests, a private independent oil and gas company, from late 1976 to 1982. Earlier in 1976, he served as Republican assistant finance chairman for the re-election of President Gerald Ford, under former Secretary of State Robert Mosbacher. He graduated from Tulane University in New Orleans, Louisiana with a B.A. degree in 1972. On September 2014 Yuma Energy, privately held until then, closed a reverse merger deal with Pyramid Oil Co. (NYSE MKT: PDO). On February 19, 2014, within two weeks after the merger with Pyramid was announced, the company’s stock traded at $7.15 per share. The share price kept falling continuously until it became a ‘penny stock’ since April 14, 2015. Under the terms of the deal with Davis Petroleum, Yuma will reincorporate in Delaware, implement a one for ten reverse split of its common stock, and convert each share of its existing Series A preferred stock into 35 shares of common stock prior to giving effect for the reverse split (3.5 shares post reverse split). Yuma will then issue additional shares in an amount sufficient to result in approximately 61.1% of the common stock being owned by the current common stockholders of Davis Petroleum. “We believe the combination of these two companies is a compelling value transaction for each company’s owners and look forward to working with Davis and its Board of Directors to complete the merger,” Banks said. “We are excited about the combination and the resulting synergies that this merger will bring, creating value for both companies. The Davis properties complement Yuma’s existing portfolio from a geographic and strategic standpoint, while also strengthening its position in resource plays. We believe that Davis brings near term liquidity and long term optionality for the Pro Forma Company,” said Michael Reddin, chairman, president and CEO of Davis. “Our major stockholders are all committed to the deal, and look forward to becoming part of a larger, more diverse, publicly-traded enterprise.” Upon closing, four of the five current Yuma Energy board members will continue to serve on the combined company board. Richard K. Stoneburner (who resigned on Feb. 12 from the board of Cub Energy) will serve as non-executive chairman, and Sam Banks will continue to serve as director, president and CEO. James W. Christmas and Frank A. Lodzinski will also continue to serve. Three additional directors will be nominated by Davis, bringing the size of the new board to seven. Legal counsel to Yuma Energy in the transaction is Jones & Keller, P.C., Denver, Colorado. Legal counsel to Davis Petroleum in the transaction is Porter & Hedges, LLP, Houston, Texas. Roth Capital Partners acted as financial advisor to Yuma Energy. Northland Capital Markets and Euro Pacific Capital have been retained by Yuma Energy to assist with the preparation of stockholder materials and closing the transaction. Evercore Partners Inc. operates as an independent investment banking advisory firm in the United States, Europe, Latin America, and internationally. The company operates through two segments, Investment Banking and Investment Management. The Investment Banking segment offers advisory services on mergers, acquisitions, divestitures, leveraged buyouts, and related corporate finance matters; capital markets advice relating to debt and equity securities; and services related to securities underwriting, private fund placement services, and commissions for agency-based equity trading services and equity research. This segment also raises funds for financial sponsors; and provides restructuring advice to companies in financial transition, as well as to creditors, shareholders, and potential acquirers. The Investment Management segment manages financial assets for institutional investors; provides independent fiduciary services to corporate employee benefit plans; offers wealth management services for high net-worth individuals; and manages private equity funds. The company has more than $13 billion in assets under management, with $1.5 trillion in announced investment banking transactions. Evercore was founded in 1995 by Roger C. Altman, its executive chairman, and is based in New York, New York. Roger Altman began his investment banking career at Lehman Brothers and became a general partner in 1974. Beginning in 1977, he served as Assistant Secretary of the U.S. Treasury for four years. He then returned to Lehman Brothers, later becoming co-head of overall investment banking, a member of the firm’s management committee and its board. He remained in those positions until the firm was sold. In 1987, he joined Blackstone as vice chairman, head of the firm’s advisory business and a member of its investment committee. He also had primary responsibility for Blackstone’s international business. Beginning in 1993, he returned to Washington to serve as Deputy Secretary of the U.S. Treasury for two years. He is a trustee of New York-Presbyterian Hospital, serving on its Finance Committee, and is a trustee of MIT. He also serves as chairman of New Visions for Public Schools. He is a member of the Council on Foreign Relations. He received an A.B. from Georgetown University and an M.B.A. from the University of Chicago. Red Mountain Capital Partners LLC, headquartered in Los Angeles, is a private investment firm dedicated to investing in small capitalization public and private companies with a private equity approach. Red Mountain acquires strategic or control stakes in public companies and participates in negotiated private equity transactions on a selected basis. The firm was established by Willem Mesdag, a former partner of Goldman, Sachs & Co and the head of its Los Angeles office. The company has over $5 billion in assets under management. Sankaty Advisors, LLC, an independently managed affiliate of Bain Capital, is a leading global credit specialist, with approximately $27.8 billion in assets under management. The firm invests across the full spectrum of credit strategies, including leveraged loans, high-yield bonds, distressed debt, private lending, structured products, non-performing loans (NPLs) and equities. Founded in 1998, Sankaty has organically grown into a global organization of more than 230 employees operating from a network of seven offices around the world. Over 110 investment professionals focus on identifying the most attractive credit opportunities in North America, Europe and Asia Pacific and are supported by a deep, highly-tenured team of analysts, financial experts and other support staff.]]>