Arcan Increases Revolving Credit Facility to $36 Million
Arcan Resources has entered into an agreement with its bank lender, Alberta Treasury Branches, to increase the amount available under its revolving operating credit facility from $25 million to $36 million.
Pursuant to the terms of the amalgamation of Arcan with Desco Energy Ltd. on January 1, 2007, each former Desco shareholder received one Performance Share as a portion of the consideration for each Desco common share held at the time of the amalgamation. Pursuant to the provisions of the Performance Shares, such shares will, on November 1, 2008, be either redeemed and cancelled or converted into a fraction of an Arcan common share (to a maximum of 0.20380435 of a common share for each Performance Share) depending on the volume of oil and natural gas reserves at the Company's Hamburg property effective June 30, 2008.
The terms of the Performance Shares provide that the Company may, at its option, elect to convert each Performance Share into 0.20380435 of a common share at an earlier date as specified by the directors. The board of directors of the Company has consented to give immediate effect to the earlier conversion of the Performance Shares. Accordingly, all 6,550,400 outstanding Performance Shares are being converted into 1,335,000 common shares, effective immediately. Further information regarding the issuance of share certificates representing common shares to be issued upon the conversion of the Performance Shares will be provided to holders of Performance Shares in due course.