Red Mountain Resources to Offer Cumulative Redeemable Term Preferred

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Little oil and gas exploration company Red Mountain Resources is offering a 10% Cumulative Redeemable Term Preferredissue.

This issue is interesting in that it is a Term Preferred, with optional redemptions prior to mandatory redemption.  Starting immediately the company can redeem the shares at a premium to par.  The premium is reduced the closer the issue gets to mandatory redemption in 2018.

Red Mountain is tiny as oil and gas explorers go—just $20,000,000 in revenues and certainly there is plenty of risk to this issue.  Just the same we have an interest in this issue and may well be purchasing a position in this issue.


As reference one can look at any number of preferreds that are ‘dicey’ in quality–GreenHunter Resources, Miller Energy etc., etc. and see that these issues can perform damned good–but one must not go into these issues blindly.

This issue is a $25 par issue–but the price to be offered to the public is still in negotiation with the underwriters–it could be $22 or $23.GreenHunter Resources 10% Preferred came to market 2 years ago at $21–it trades at par now.

You can get further details on the issue here where you can begin your due diligence.  Under no circumstances should you make a decision based on our actions.  You must understand the risk for your situation.

Thanks to our readers for making sure we got this published.


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Tim McPartland

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Tim McPartland
Tim McPartland is a private investor with over 45 years of investing experience. His analysis, research and writing is devoted to the hunt for income producing securities of all types, but in particular specializing in preferred stocks, exchange traded debt and Master Limited Partnerships.
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