BNK Petroleum, Inc. has entered into a binding commitment with the Energy Banking division of Capital One, N.A. through its wholly owned subsidiary Bankers Petroleum (US) Inc., for two loan facilities.
"We are extremely pleased with our financial partnership with Capital One in this early stage of our development. We are looking forward to a long lasting and mutually beneficial relationship," said Wolf Regener,
The Facility A is a senior revolving credit facility secured by a US $23 million certificate of deposit which will be funded by a loan from Bankers Petroleum Ltd. pursuant to a subordinated loan agreement between Bankers and the Company.
The Facility B is a US $50 million senior secured revolving credit facility subject to a borrowing base and secured by all proved oil and gas properties and undeveloped acreage of the Company. The initial borrowing
The Facility A bears interest at 1% over the interest rate paid on the underlying deposit. The Facility B bears interest at US prime rate plus a margin which ranges from 0 basis points (bps) to 25 bps based on the
The Capital One Facilities have no scheduled repayment terms and mature in three years from closing unless terminated earlier by the Company without penalty. The Company expects to use the proceeds from the Capital One Facilities in the development of its Tishomingo Gas Field in Ardmore County, Oklahoma and general working capital purposes.
The Subordinated Loan payable to Bankers bears interest at LIBOR plus 3.5% and is secured by a floating charge debenture and a general security agreement. The Company will repay to Bankers up to US $12.5 million of the Subordinated Loan in the event of an equity offering. The proceeds from any subsequent equity offerings will be directed to the repayment of the Subordinated Loan as to 50%. The Company additionally will repay 100% of the proceeds of any debt issued by the Company and its subsidiaries and 90% of any increase in the borrowing base at each determination date to Bankers. The Subordinated Loan matures on the fourth anniversary of the closing of the Capital One Facilities.
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