Petrol Oil and Gas Completes Debt Facility of up to $50 Million to Support Drilling Program
November 2, 2005LAS VEGAS, Nov. 2, 2005 - Petrol Oil and Gas, Inc. (OTCBB: POIG) announced today that it has entered into an agreement with Laurus Master Fund, which will provide debt financing of up to $50 million to support Petrol's expanded drilling program. Under the Agreement, $10 million was escrowed today, the release of which is pending completion of certain closing requirements. The proceeds will be used to drill and develop Petrol's Coal Bed Methane (CBM) gas fields in eastern Kansas as well as to install a gas gathering pipeline and processing system in the production areas.
"This financing represents a milestone event for our stockholders," said Paul Branagan, Petrol's Chairman and CEO. "We have spent the past year acquiring a portfolio of promising prospects and testing the production capacity of these Cherokee group coal beds. This financing will enable us to greatly expand our drilling activities and when this new production begins it will substantially augment the existing cash flow from our current production. We are gratified that Laurus, already an existing investor, has agreed to significantly increase its investment in Petrol."
The notes will bear interest at 3.75% above the prime rate, with a minimum interest rate of 10%. Laurus will receive a 3% royalty interest on portions of Petrol's existing Mineral acreage, in addition to a first priority lien on all of Petrol's and its subsidiaries assets. Petrol also issued to Laurus five-year warrants to purchase one million shares of Petrol's common stock at $2.00 per share. The additional $40 Million facility is subject to the discretion of Laurus and the satisfaction of certain requirements by Petrol.
Kansas City Web Design
Kansas City Web Development
Kansas City Custom web design
kansas web page design