Doxa Energy US, Inc. Secures Bank Facility
VANCOUVER, BRITISH COLUMBIA
- Doxa Energy US, Inc., a subsidiary of Doxa Energy Ltd. ("Doxa" or the "Company") today announced that it has entered into a Revolving Loan Agreement with the Meridian Bank Texas ("Lender"). The Lender agrees to make a revolving loan in the face amount of US$5 million to Doxa Energy US, Inc. subject to the terms and conditions set forth in the Loan Agreement, including the following terms:
- Initial Borrowing Base is set at US$2 million.
- Maturity date is September 12, 2015
- Interest rate is US Bank Prime plus 1%, subject to a 6% floor
- Unused facility fee of 0.375% per annum payable quarterly
- Provide the Lender a general security interest in all of Doxa's producing oil and gas properties
- Personal Guarantees from Doxa's Chairman, G. Arnold Armstrong and its President and CEO John D. Harvison
John D. Harvison, President and CEO, commented today that:
"This Loan facility will provide Doxa with the necessary capital for continued, uninterrupted development of its interests in ongoing projects, including the Mississippian Oil Play in Oklahoma and the Sarco Creek Project in South Texas. In addition, the transaction reflects our confidence that Doxa will successfully build asset value and deliver attractive returns to its shareholders."
Doxa will utilize a portion of this loan facility to repurchase 10% interest in Sarco Creek Project, South Texas, thereby fixing Doxa's interest at 30% (see Doxa press release February 22, 2012). Doxa anticipates that the Sarco Creek Project will commence drilling operations in the 4th quarter of this year.
The Company also advises that it has granted incentive stock options to certain directors, and officers entitling them to purchase up to 600,000 common shares of the capital stock in the Company at a price of $0.15 per share until September 24, 2017. The above is subject to regulatory approval.
About Doxa Energy Ltd.
Doxa Energy Ltd. develops and maintains a portfolio of producing and developing conventional and unconventional assets, including the Eagle Ford Shale Oil Play in south Texas, and the Mississippian Lime Play of northern Oklahoma.
John D. Harvison
President, Chief Executive Officer
For further information contact:
Paul McKenzie, Director at 604.662.3692 or visit
Neither TSX Venture Exchange nor its Regulation Services providers (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Statements in this press release other than purely historical information, including statements relating to the Company's future plans, objectives or expected results, constitute forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to the risks and uncertainties inherent in the Company's business, including risks inherent in oil and gas exploration and development, and uncertainties in connection with anticipated commodity prices for oil and natural gas, growth of worldwide market demand, exploration capital requirements, length of asset life and availability of qualified personnel, among others As a result, actual results may vary materially from those described in the forward-looking statements.
All references in this press release to BOE are based on a 6 Mcf to 1 Bbl conversion ratio. BOE's may be misleading particularly if used in isolation. A BOE conversion of 6 Mcf to 1 Bbl is based on the energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company in the United States. The securities of Doxa have not been registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States or to or for the account or benefit of a U.S. person unless so registered or pursuant to an available exemption from the registration requirements of such Act or laws.