VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 13, 2011) - Lynden Energy Corp. (TSX VENTURE:LVL) reports that its wholly owned subsidiary, Lynden USA Inc., has executed a preliminary term sheet with Texas Capital Bank of Dallas, Texas which contemplates the provision of a three year reducing revolving line of credit (the "Credit Facility") in an amount up to US$50 million. If implemented, the Credit Facility will provide for an initial borrowing base of US$9.5 million.
The Credit Facility will bear interest determined by the percent of the borrowing base utilized and by elections made by the company. A minimum interest rate of 4.5% is required on borrowings under the Credit Facility. Payments under the Credit Facility will be required to the extent that outstanding principal and interest exceed the borrowing base. Other fees will also apply.
Increases in the borrowing base will be made based on the bank's engineering valuation of the company's oil and gas reserves. The borrowing base will be re-determined semi-annually; however, the company may request two additional re-determinations of the borrowing base annually.
If implemented, proceeds of the Credit Facility will be used to provide working capital, to fund oil and gas property acquisitions, developmental drilling expenditures and to fund other expenditures for general corporate purposes. The Credit Facility will contain certain mandatory covenants, including minimum current ratio and cash flow requirements, and other standard business operating covenants.
The finalization of the Credit Facility remains subject to conditions precedent in favor of Texas Capital Bank and, if necessary, regulatory approval. The preliminary term sheet does not represent a commitment to advance funds.
Lynden is a Canadian-based oil and gas company with operations focused on our Wolfberry and Mitchell Ranch projects in the Permian Basin, West Texas, and our Paradox Basin Project, Utah.
ON BEHALF OF THE BOARD OF DIRECTORS
LYNDEN ENERGY CORP.
Colin Watt, President and CEO
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Contact Information:
Colin Watt
President and CEO
(604) 629-2991
(604) 602-9311 (FAX)