Petro Resources Corporation has closed two credit facilities with CIT Capital USA Inc. totaling $65 million on September 9, 2008. The Credit Agreement is a $50 million revolving facility with an initial borrowing base of $17 million. The Second Lien Term Loan is a $15 million facility which was fully drawn at closing.
The Company has utilized approximately $16.3 million of the facilities to retire all mezzanine debt incurred in acquiring its Williston Basin assets. The Company is permitted to use the remaining available funds to finance its capital program, optionally redeem its outstanding preferred stock, and fund general corporate purposes.
As part of the transactions, the Company entered into a series of hedges with Macquarie Bank Limited. These swap agreements cover approximately 127,000 barrels of oil at a swap price of $105.45 per barrel from October 2008 through December 2011.
CIT Capital Securities LLC was the Sole Lead Arranger and Sole Bookrunner for the transaction. Canaccord Adams served as investment advisor to the Company.
Wayne Hall, Chief Executive Officer, commented, "The closing of these credit facilities is another significant milestone in our brief history. These facilities will provide a lower cost of borrowing, provide more flexibility in the funding of our capital program, and provide the base for a future property acquisition."
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