Cano Restructures Credit Facilities
Fort Worth-based Cano Petroleum, Inc. said that it has successfully negotiated new terms under its existing credit facilities and provided updated reserves.
The increased financial flexibility provided by the company's $115 million credit facilities, and stabilized production operations from disruption due to fires in the Texas Panhandle earlier this year, now put Cano in a solid position to deploy waterflood and/or surfactant/polymer pilot programs on major assets in the company's portfolio including the Panhandle, Corsicana, and Desdemona fields within 90 days and Nowata by December 2006.
"The new terms we have agreed to will benefit Cano shareholders as we initiate waterflood and surfactant/polymer pilot projects," stated CEO Jeff Johnson. "I appreciate the hard work and commitment that Union Bank of California and Natexis Banques Populaires, our senior lenders, and Energy Components SPC EEP Energy Exploration and Production Segregated Portfolio and UnionBancal Equities, Inc., our subordinated lenders, all exhibited through this process. I am looking forward to working with them throughout the term of these facilities."
The company's two credit facilities have a borrowing base of $100 million and $15 million, respectively. The $100 million senior facility with Union Bank of California matures in November of 2008 and bears an interest rate of libor plus 2.5%-3.25%. $53.75 million is currently drawn under this facility. The $15 million subordinated facility matures in November of 2009 and currently bears an interest rate of libor plus 6.5%. $15 million is currently drawn under this facility.
Additionally, the Company announced that Forrest A. Garb & Associates, Inc., its independent engineer, provided interim updated proved reserves of the company, as of March 31, 2006, of 45.4 MMBOE (million barrels of oil equivalent) with a PV10 value of $447.8 million at a March 31, 2006, price deck of $66.25/bbl and $6.98/mcf.
Cano Petroleum Inc. is an independent Texas-based energy producer with properties in the mid-continent region of the United States. Led by an experienced management team, Cano's primary focus is on increasing domestic production from proven fields using enhanced recovery methods. Cano trades on the American Stock Exchange under the ticker symbol CFW.