CALGARY, Canada and DENVER, Aug. 1 /CNW/ -- Storm Cat
Energy Corporation (Amex: SCU; TSX: SME) today announced that it has closed a
revolving line of credit facility led by JPMorgan Chase Bank, N.A. providing
for a credit line of up to US$250 million. Loans made under the revolving
credit agreement are secured by mortgages on the Company's oil & gas
properties and guaranteed by Storm Cat's Powder River Basin assets.
Each loan bears interest at a Eurodollar rate or a base rate, as requested
by Storm Cat, plus an applicable percentage based on Storm Cat's usage of the
facility. In addition, under the terms of the US$250 million credit
agreement, Storm Cat will pay a commitment fee quarterly in arrears based on a
percentage multiplied by the daily amount that the aggregate commitments
exceed borrowings under the agreement. Storm Cat did not borrow any funds at
the time of execution of the credit agreement.
The credit facility is available to provide funds for the exploration,
development and/or acquisition of oil and gas properties and for working
capital and other general corporate purposes. Interest on funds drawn will be
paid monthly with the principal due August 2010. The agreement provides for
semi-annual evaluation of the borrowing base, which will be determined as a
percentage of the discounted present value of the Company's oil and natural
gas reserves.
"This revolving line of credit is an important financial instrument that
we can use to further our growth," said Scott Zimmerman, Storm Cat's Chief
President and CEO. "While there are numerous competent choices in energy
lenders, we believe that by establishing our relationship with JPMorgan Chase
Bank, N.A., we can leverage both their expertise and financial strength. With
this credit facility, which is tied to our reserve base, we are further
capable of funding our drilling and completion plans in our core operating
areas of the US and Canada."
About Storm Cat Energy Corporation
Storm Cat Energy is an independent oil and gas company focused on the
pursuit, exploration and development of large unconventional gas reserves from
fractured shales, coal beds and tight sand formations. The Company has
producing properties in Wyoming's Powder River Basin, exploitation and
development acreage in Canada, Arkansas and Alaska. The Company's shares
trade on the American Stock Exchange under the symbol "SCU" and in Canada on
the Toronto Stock Exchange under the symbol "SME."
By Order of the Board of Directors
Storm Cat Energy Corporation
J. Scott Zimmerman
President and Chief Executive Officer
/s/ J. Scott Zimmerman
Forward-looking Statements
CAUTIONARY STATEMENT: This publication contains certain "forward-looking
statements", as defined in the United States Private Securities Litigation
Reform Act of 1995 relating to matters such as the Company's drilling and
other exploration plans and projected well economics. Forward-looking
statements are statements that are not historical facts; they are generally,
but not always, identified by the words "expects," "plans," "anticipates,"
"believes," "intends," "estimates," "projects," "aims," "potential," "goal,"
"objective," "prospective," and similar expressions, or that events or
conditions "will," "would," "may," "can," "could" or "should" occur. Forward-
looking statements are based on the beliefs, estimates and opinions of Storm
Cat's management on the date the statements are made; they involve a number of
risks and uncertainties. Consequently, there can be no assurances that such
statements will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements. Storm Cat
undertakes no obligation to update these forward-looking statements if
management's beliefs, estimates or opinions, or other factors, should change.
Factors that could cause future results to differ materially from those
anticipated in these forward-looking statements include, but are not limited
to the volatility of natural gas prices, the possibility that exploration
efforts will not yield economically recoverable quantities of gas, accidents
and other risks associated with gas exploration and development operations,
the risk that the Company will encounter unanticipated geological factors, the
Company's need for and availability of additional financing, the possibility
that the Company may not be able to secure permitting and other governmental
clearances necessary to carry out the Company's exploration and development
plans, and the other risk factors discussed in greater detail in the Company's
various filings on SEDAR (www.sedar.com) with Canadian securities regulators
and its filings with the US Securities and Exchange Commission, including the
Company's Form 20-F for the fiscal year ended December 31, 2005.
NO STOCK EXCHANGE HAS REVIEWED OR ACCEPTS RESPONSIBILITY
FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.
