OilVoice - Resaca Exploitation Secures New Revolving Credit Facility

Resaca Exploitation Secures New Revolving Credit Facility

Tuesday, June 30, 2009

Resaca Exploitation, the AIM listed oil and natural gas production, exploitation, and development company focused on the Permian Basin in the USA, has entered into a three-year $50 million Senior Secured Revolving Credit Facility with CIT Capital USA Inc. (“CIT”) and NGP Capital Resources Company (“NGP”). The new revolving credit facility replaces Resaca’s existing credit facility with NGP, which converted to a term loan on 1 May 2009. The initial borrowing base of the new facility is $35 million and CIT will serve as Administrative Agent. Resaca will pay 5.5% over LIBOR subject to a 2.5% LIBOR floor, for an interest rate of 8%. This reflects a 2% reduction in the Company’s interest rate as compared to the prior loan from NGP. In conjunction with closing the new facility, the Company entered into additional natural gas hedges for January 2011 through June 2012 and additional oil hedges for June 2011 through June 2012.

Jay Lendrum, Chief Executive Officer of Resaca, commented:
"We are extremely pleased to close our new revolving facility in these challenging times. The new facility will provide liquidity and lower our borrowing rate. Also, we are excited to establish a new long-term relationship with CIT while continuing our relationship with NGP, which has been with us since our formation.”