Storm Cat Closes $80 Million Credit Facility, Approves 2008 Capital Budget

Storm Cat Energy Corporation announced the closing of a new $80.0 million senior, secured credit facility with Regiment Capital Advisors, LP and Wells Fargo Foothill, part of Wells Fargo & Company. The proceeds from the Credit Facility will be used by the Company to retire the outstanding principal balance under its previous senior credit facility, including accrued interest, and provide additional liquidity for development of the Company's capital development opportunities.

The $80.0 million Credit Facility has an initial $55.0 million borrowing base which is comprised of a $50.0 million senior revolving credit facility ($25.0 million initial borrowing base; $13.0 million outstanding) and a $30.0 million term loan facility ($30.0 million initial borrowing base; $30.0 million outstanding). The Credit Facility is secured by substantially all of the Company's assets. Outstanding borrowings under the Credit Facility will mature on September 27, 2011, which maturity date may be extended to December 27, 2012 if the Company's existing subordinated convertible notes are fully converted into equity or refinanced prior to September 27, 2011.

The Credit Facility will be used, in conjunction with cash flow from operations, to fund the Company's 2008 Capital Expenditure budget of $38.2 million, recently approved by the Company's Board of Directors. The 2008 Capital Expenditure budget allocates $16.0 million to the Fayetteville Shale to drill eight net wells, $20.0 million in the Powder River basin to drill approximately 120 wells, $1.0 million in Elk Valley to continue ongoing production operations and the remainder on non-project capital expenditures.


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