Cuda Oil and Gas Inc. Announces the Extension of its Credit Facilities to Continue to Support its Light Oil Asset in the Powder River Basin - Wyoming
Calgary, Alberta--(Newsfile Corp. - May 7, 2020) - Cuda Oil and Gas Inc. (TSXV: CUDA) ("Cuda" or the "Company") is pleased to announce that it has entered into an Agreement with the Company's institutional lender (the "Lender") to extend the expiration of its 1st and 2nd Loan Facilities (the "Facilities") with an aggregate principal amount of $43.6 million, from June 26, 2020 and March 31, 2020, respectively, to July 31, 2020. In connection with the extension of the Facilities, interest on the 2nd Loan Facility, with a principal amount of $8.3 million, was increased by 725 basis points. There was no change to interest on the 1st Loan Facility . In addition to the extension, the Company also received an unsecured promissory note from an outside party in the amount of $100,000.
Glenn Dawson, President and Chief Execuitve Officer of Cuda, stated: "In spite of unprecedented volatility in commodity prices which has lead to severe financial duress throughout the energy industry worldwide, the extension of both the 1st and 2nd Loan Facilities and the establishment of a new unsecured promissory note speaks to our Lenders' confidence in our asset in the Powder River Basin and our progress to advance the miscible gas-flood program. Progress on the development of the asset continues to exceed expectations and production at the asset remains economic at $15/bbl WTI. We look forward to updating our stakeholders on field-level results of the program shortly."
KES 7 Capital Inc. ("KES 7") acted as financial advisor to the Company. Subject to the approval of the TSX-V, the Company is to issue warrants as commission for advisory services rendered based on a fee of $25,000 calculated using the Black Scholes Model with the strike price on the day of signing of the Agreement to extend the Loan Facilities.
About Cuda Oil and Gas Inc.
Cuda Oil and Gas Inc. is engaged in the business of exploring for, developing and producing oil and natural gas, and acquiring oil in Wyoming and Alberta properties. The Cuda management team has worked closely together for over 20 years in both private and public company environments and has an established track record of delivering strong shareholder returns. Cuda will continue to implement its proven strategy of exploring, acquiring, and exploiting with a long-term focus on large, light oil resource- based assets across North America including significant operational experience in the United States. The Cuda management team brings a full spectrum of geotechnical, engineering, negotiating and financial experience to its investment decisions.
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President and Chief Executive Officer
Cuda Oil and Gas Inc.
This news release contains forward-looking information. All statements other than statements of historical fact included in this release are forward-looking statements that involve various risks and uncertainties and are based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management. In particular, this news release includes forward-looking information relating to the Company's Credit Facility and use of proceeds there, from exploration and development activities, and activity levels in the Company's core areas. Risk factors that could prevent forward-looking statements from being realized include market conditions, third party and regulatory approvals, ongoing permitting requirements, the actual results of current exploration and development activities, operational risks, risks associated with drilling and completions, uncertainty of geological and technical data, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as future oil and gas prices. Although Cuda has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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