TIDMCAZA
RNS Number : 8222M
Caza Oil & Gas, Inc.
25 January 2016
January 25, 2016
Caza Oil & Gas, Inc.
CAZA OIL & GAS ANNOUNCES EXECUTION OF
SENIOR SECURED RESERVE-BASED REVOLVING CREDIT FACILITY
HOUSTON, TEXAS (Marketwire - January 25, 2016) - Caza Oil &
Gas, Inc. ("Caza" or the "Company") (TSX:CAZ) (AIM:CAZA) is pleased
to announce today that its wholly owned subsidiary, Caza Petroleum,
Inc. ("Caza Petroleum"), has entered into a credit agreement for a
five-year, senior secured, reserve-based, revolving credit facility
(the "Credit Facility") with JPMorgan Chase Bank, N.A., as Lender
and Administrative Agent ("JPMorgan"), with J.P. Morgan Securities
LLC, acting as sole lead arranger and sole bookrunner of the Credit
Facility.
Facility Commitment
Pursuant to the credit agreement, the Credit Facility commitment
is a maximum US$100.0 million, governed by an initial borrowing
base of US$15.0 million, including a sub-facility for the issuance
of letters of credit up to a maximum aggregate face amount of 10%
of the borrowing base in effect. Interest on loans under the Credit
Facility may be elected by Caza Petroleum to be based on LIBOR or a
base rate (determined as the greatest of the prime rate, federal
funds rate + 0.50% and adjusted LIBOR + 1%) from time to time, plus
a margin determined based upon utilization of the borrowing base
ranging from 2% to 3% for LIBOR loans and ranging from 1% to 2% for
base rate loans. The Credit Facility also requires Caza Petroleum
to pay a commitment fee equal to 0.50% per annum based on the
average daily unused portion of the borrowing base. Additionally,
upfront fees will be paid to JPMorgan at closing in an amount equal
to 0.50% of the initial borrowing base.
Borrowing Base
The borrowing base is the loan value to be assigned to the
proved reserves attributable to the Company's proved oil and gas
properties, as evaluated in the most recent reserve report(s) and
delivered pursuant to the credit agreement. As of the closing date,
the borrowing base was set at US$15.0 million until the next
scheduled redetermination or as the borrowing base is otherwise
adjusted or redetermined.
Redeterminations based on updated reserve reports are scheduled
semi-annually, and each of Caza Petroleum and JPMorgan have the
ability to request one interim redetermination in each 6 month
period between scheduled redeterminations. The initial borrowing
base redetermination will occur on July 1, 2016, unless the
borrowing base is adjusted or redetermined before such date in
accordance with the terms of the Credit Facility.
Security Granted
The Credit Facility is guaranteed by Caza Petroleum's wholly
owned subsidiary, Caza Operating, LLC ("Caza Operating"), and the
collateral provided to secure the Credit Facility (and any hedges
or cash management obligations owing to JPMorgan) consists of
substantially all of Caza Petroleum's and Caza Operating's
respective now owned or hereafter acquired personal property, as
well as at least 80% of the PV-9 of their oil and gas
properties.
Financial Covenants
The Credit Facility includes financial covenants tested on a
quarterly basis, including a maximum funded debt to EBITDAX ratio
of 4.0x and a minimum current assets to current liabilities ratio
of 1.0x, each tested on a consolidated basis for Caza Petroleum and
its subsidiaries. The Credit Facility also includes
representations, warranties, affirmative and negative covenants,
events of default, remedial provisions and other terms that are
usual and customary for secured reserve-based credit
facilities.
Availability and Maturity
Subject to the borrowing base in effect, the Credit Facility is
available on a revolving basis during the period commencing on the
closing date and ending on the fifth anniversary of the closing
date, which is January 21, 2021.
Use of Proceeds
Caza Petroleum and Caza Operating will use the proceeds of the
loans for (i) the payment of transaction fees and expenses in
connection with the closing of the Credit Facility; and (ii)
funding the working capital, capital expenditures and other general
corporate purposes of Caza Petroleum and Caza Operating.
About Caza
Caza is engaged in the acquisition, exploration, development and
production of hydrocarbons in the following regions of the United
States of America through its subsidiary, Caza Petroleum, Inc.:
Permian Basin (Southeast New Mexico and West Texas) and Texas and
Louisiana Gulf Coast (on-shore).
For further information, please contact:
Caza Oil & Gas, Inc.
Michael Ford, CEO +1 432 682 7424 (Midland)
Richard R. Albro, VP +1 832 381 3853 (Houston)
Cenkos Securities plc
Neil McDonald +44 131 220 6939 (Edinburgh)
Nick Tulloch +44 131 220 9772 (Edinburgh)
VIGO Communications
Chris McMahon +44 20 7016 9570 (London)
The Toronto Stock Exchange has neither approved nor disapproved
the information contained herein.
ADVISORY STATEMENT
Information in this news release that is not current or
historical factual information may constitute forward-looking
information within the meaning of securities laws. Such information
is often, but not always, identified by the use of words such as
"seek", "anticipate", "plan", "schedule", "continue", "estimate",
"expect", "excellent", "may", "will", "hope", "project", "predict",
"potential", "intend", "could", "might", "should", "believe",
"develop", "test", "anticipation", "looks to be" and similar
expressions. In particular, information regarding timing and scope
of future oil and gas operations, the availability of the Credit
Facility, the use of proceeds under the Credit Facility and any
implication to increase production, cash flow, reserves or
shareholder value contained in this news release constitutes
forward-looking information within the meaning of securities
laws.
Implicit in this information, are assumptions regarding the
success of oil and gas operations, rig availability, projected
production, projected revenue and expenses and well performance.
These assumptions, although considered reasonable by the Company at
the time of preparation, may prove to be incorrect. Readers are
cautioned that actual future operations, operating results and
economic performance of the Company are subject to a number of
risks and uncertainties, including general economic, market and
business conditions, well performance and operating risks and could
differ materially from what is currently expected as set out
above.
For more exhaustive information on these risks and uncertainties
you should refer to the Company's most recently filed annual
information form which is available at www.sedar.com and the
Company's website at www.cazapetro.com. You should not place undue
importance on forward-looking information and should not rely upon
this information as of any other date. While we may elect to, we
are under no obligation and do not undertake to update this
information at any particular time except as may be required by
securities laws.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCKZLFLQFFXBBZ
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January 25, 2016 02:00 ET (07:00 GMT)
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