Contact Information: Contact: Don Kirkendall President (832) 369-6986
Petro Resources Announces Amendments to Credit Facilities
| Source: Petro Resources Corporation
HOUSTON, TX--(Marketwire - March 30, 2009) - Petro Resources Corporation (NYSE Amex: PRC)
(NYSE Alternext US : PRC ) ("the Company") announced today that the Company
has amended its Credit Agreement and Second Lien Term Loan Agreement ("Term
Loan Agreement") with CIT Energy effective March 19, 2009. The borrowing
base under the Credit Agreement was reduced from $17 million to $12
million. The Company has approximately $5.5 million of availability under
the amended borrowing base of the Credit Agreement. The Company is
permitted to use the remaining borrowing base availability under the Credit
Agreement to finance its capital program and fund general corporate
purposes.
As of this date, the Company has drawn a total of $21.5 million, of which
$15.0 million was fully drawn on the Term Loan Agreement and $6.5 million
was drawn on the Credit Agreement.
The Company had informed CIT Energy that it was unable to comply with the
interest and debt coverage covenants contained in Sections 9.01(a) and
9.01(b) of the Credit Agreement and Section 9.01 (b) of the Term Loan
Agreement for the fiscal quarter ended December 31, 2008 and requested a
waiver of the defaults. The administrative agent and the lenders have
agreed to waive the defaults.
The terms of the Credit Agreement and Term Loan Agreement were further
amended as follows:
Under the Credit Agreement, the Company must have (A) a ratio of EBITDAX to
Interest Expense of not less than 2.0:1.0 for the first and second fiscal
quarters of 2009, 2.25:1.0 for the third and fourth fiscal quarters of
2009, and 2.5:1.0 for each fiscal quarter thereafter; (B) a ratio of Net
Debt to EBITDAX of not more than 6.5:1.0 for the fiscal quarters of 2009,
6.0:1.0 for the fiscal quarters of 2010, and 5.0:1 for each fiscal quarter
thereafter; (C) a ratio of consolidated current assets to consolidated
current liabilities of not less than 1.0:1.0 for each fiscal quarter; and
(D) a ratio of Credit Agreement debt to EBITDAX of not more than 2.75:1.0
for each fiscal quarter. Borrowings under the Credit Agreement bear
interest, at our option, at either a fluctuating base rate or a rate equal
to LIBOR (with a LIBOR floor of 2.50%) plus, in each case, a margin
determined based on our utilization of the borrowing base. The amendment
includes an increase in the margin of 50 basis points.
Under the Term Loan Agreement, the Company must have (A) a ratio of Total
Reserve Value to Debt of not less than 1.75:1.0; and (B) a ratio of Net
Debt to EBITDAX of not more than 6.5:1.0 for the fiscal quarters of 2009
and 2010 and 5.5:1 for the fiscal quarters of 2011 each fiscal quarter
ending thereafter. Borrowings under the Term Loan Agreement bear interest,
at our option, at either a fluctuating base rate plus 6.50% per annum or a
rate equal to LIBOR (with a LIBOR floor of 2.50%) plus 7.50% per annum.
About Petro Resources
Petro Resources Corporation and subsidiaries is an independent exploration
and production company engaged in the acquisition of exploratory leases and
producing properties, secondary enhanced oil recovery projects, exploratory
drilling, and production of oil and natural gas in the United States.
For more information, please view our website at
www.petroresourcescorp.com.
Forward-looking Statements
The statements contained in this press release that are not historical are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including statements, without limitation, regarding the Company's
expectations, beliefs, intentions or strategies regarding the future. Such
forward-looking statements relate to, among other things: (1) the Company's
proposed exploration and drilling operations on its various properties, (2)
the expected production and revenue from its various properties, and (3)
estimates regarding the reserve potential of its various properties. These
statements are qualified by important factors that could cause the
Company's actual results to differ materially from those reflected by the
forward-looking statements. Such factors include but are not limited to:
(1) the Company's ability to finance the continued exploration and drilling
operations on its various properties, (2) positive confirmation of the
reserves, production and operating expenses associated with its various
properties; and (3) the general risks associated with oil and gas
exploration and development, including those risks and factors described
from time to time in the Company's reports and registration statements
filed with the Securities and Exchange Commission, including but not
limited to the Company's Annual Report on Form 10-K for the year ended
December 31, 2007 filed with the Securities and Exchange Commission on
March 31, 2008 and our subsequently filed reports. The Company cautions
readers not to place undue reliance on any forward-looking statements. The
Company does not undertake, and specifically disclaims any obligation, to
update or revise such statements to reflect new circumstances or
unanticipated events as they occur.