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million of outstanding 10 percenft seniorsecured debentures, pay $2 million in debt to , repah about $1 million in promissory notes connected to the company'w purchase of the DD Energy project, pay fees and expenses for the new facilitg and expand current development projects, including completion of 31 new oil welle drilled since May. The company said it will use futur borrowings mainly forthe acquisition, development and exploratio of oil and gas capital expenditures and general corporate EnerJex also said its 1-for-5 reverse stocm split approved by shareholders May 27 will be effective on or abour July 25.
The split will combiner each five shares of common stockl and reclassify it into one share ofcommobn stock, reducing the number of shares outstanding to abougt 4.4 million from about 22.2 million. The companyu said it also has entered intoa "costless collar" with on 130 barrel s of oil a day with a priced floor of $132.50 a barrel and a ceilingb price of $155.70 a barrel for NYMEX West Texazs Intermediate for 18 montha from Oct. 1, 2009, through Marchy 31, 2011. The company's production as of May 30 approximatede 270 barrelsa day.
A costless collaer is created by buying a protective put and writingan out-of-the-moneuy covered call with a strike price with the premium receives equal to the premium of the protectivr put purchased, . Costless collars can be created to fully protect existinvg long stock positions with little or no cost because the premiumk paid for the protective puts is offset by the premiumss received for writing thecovered calls, according to the EnerJex is an oil and natural gas acquisition, exploratiobn and development company.
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