Platina Clarifies Financing Terms for Appalachian Prospect
Platina Energy Group entered into a funding agreement in the amount of $17 million for the Company's Appalachian Prospect. Based upon what appears to be an inordinate amount of short selling, the Company is now providing additional information relating to the financing, to dispel concerns that the financing might have elements of a convertible debenture.
Blair Merriam, CEO of Platina, stated that "the $17 million financing provided was through an equity line of credit as part of a Joint Venture between the investor group and Platina, and not any form of a convertible debenture or common stock dilution. The agreement will include a buy-back provision for Platina for the investor group's working interests once the wells have been completed and are on line. The exact terms have yet to be determined."
Our contribution to the Joint Venture agreement is our lease-hold acreage. The investor group will be providing funding for the drilling and completion of up to $17 million for 55 wells.
Pending finalization of the agreement, Platina will retain a carried interest in the joint venture greater than 25% plus a substantial operating agreement.
Platina Energy Group has based its projections on an engineering report estimating proven reserves that top $200,000,000.00 at current forward contract pricing. The investor group believes potential reserves to be substantially higher in the combined areas in which we will be drilling.
The investors further concluded, that based on more recent well production data on adjacent properties, income to the joint venture once all wells are drilled and completed could be significantly higher than $2 million per month estimates.
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