Bengal Signs $20M Secured Credit Facility for Ongoing Australian Projects

Bengal Energy Ltd. (Bengal or the Company) reported Tuesday that it has signed an indicative term sheet for a $20.0 million secured credit facility (the Facility) with a leading Australian commercial bank (the Lender), and provides an update on its Cuisinier exploration program in Cooper-Eromanga Basin in Queensland, Australia.

$20 Million Secured Credit Facility

The Facility contemplates a borrowing base of up to $20 million, over a three year term at attractive fixed income market rates tied to USD LIBOR to fund its ongoing Australian development. The Company has thoroughly stress tested its existing production base to ensure that this Facility and Bengal's existing unsecured debt are fully serviceable in multiple commodity price scenarios.

The initial draw on the Facility will fund past costs associated with the Company's Cuisinier Phase 1 drilling program and further draws are expected to fully fund its Australian development through March 2015 as well as anticipated future development. With the Facility in place, Management expects to be able to fund future planned exploration activities in India and Australia through internally generated cash flows.

The Facility remains subject to the completion of due diligence by the Lender and the entering into of a final Offer to Finance with Bengal and will remain open for a fixed period to allow Bengal to review other competitive lending proposals received. Management expects an average cost of capital over the term of its finalized Facility to be within the range of five to seven percent.

"The establishment of a reserve-based facility by a leading international bank provides another milestone in the development of Bengal's world-class Cuisinier oil play. The Facility provides greater financial flexibility and enhanced predictability of our free cash flow," said Chayan Chakrabarty, Bengal's president and CEO. "Together with our existing cash flow and working capital, this Facility will provide us with the capital needed to fund our ongoing capital program, offer us the flexibility to finance additional development opportunities, and free up internally generated cash flows for the financing of other potential exploration opportunities in Australia and India."

Bengal's existing $7.37 million or CAD 8 million (10 percent coupon) and $1.65 million or CAD 1.8 million (10 percent coupon) unsecured notes remain outstanding with maturities on July 31, 2015 and January 31, 2016 respectively.

Cuisinier 2014 Exploration Program Update


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