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BSNS WIRE) Strat Petroleum Secures $2 Million Short-Term Lending Facility an
$20 Million Long-Term Funding Facility
Strat Petroleum Secures $2 Million Short-Term Lending Facility and $20 Million L
ng-Term Funding Facility
Business Editors / Energy Editors
TORONTO--(BUSINESS WIRE)--Feb. 7, 2005--
Strat Petroleum, Ltd. (OTCPS:SPRL) today announced that
it has signed a Standby Equity Line Agreement (the "Agreement") that
allows it, at its option, to issue shares to US-based investment fund
The Nutmeg Group LLC (www.tngroupllc.com), up to a maximum value of
US$20 million.
Under the terms of the Agreement, Strat Petroleum may, at its
discretion, issue shares to Nutmeg at any time over the next two
years. The maximum aggregate amount of the equity placements pursuant
to the Agreement is $20 million. Subject to this limitation, Strat
Petroleum may draw down up to 200% of the average daily volume (U.S
market only) ("ADV") computed using the ten (10) trading days prior to
the drawdown request. The facility may be used in whole or in part
entirely at Strat Petroleum's discretion, subject to an effective
registration.
Shares issued to Nutmeg will be priced at a 7.5% discount to the
lowest daily Volume Weighted Average Price ('VWAP') of Strat
Petroleum, Ltd. shares traded on each of the five days following a
drawdown notice by Strat Petroleum. No commissions will apply to each
issue of Strat Petroleum shares under the Agreement, however, a flat
non-accountable expense allowance of $1,500 will be payable to Nutmeg
at the time of issue.
In addition, Strat Petroleum has set in place a non-recourse loan
with common stock as collateral, with a 49.875% net loan to value.
Strat Petroleum, at its discretion may post up to eight million shares
as collateral. The term of the loan is for one year, with an interest
rate based on one-month LIBOR plus three percent, interest paid
quarterly.
Randall S. Goulding, Managing Director of The Nutmeg Group, LLC,
said "We are eager to assist Strat Petroleum in meeting its ongoing
financing needs and we look forward to a long-term relationship with
the Company."
The Nutmeg Group, LLC and its principals have been successful in
raising capital through private placements and stock loans. With more
than 30 million dollars under management, the Nutmeg Group, L.L.C. is
a value-added private capital investment firm and a full service
investment and financial consulting organization, dedicated to helping
growth companies emerge as industry leaders. Staffed with an
impressive array of diverse talents and a robust infrastructure,
Nutmeg stands committed to facilitating the Company's success, as it
is for all of its portfolio companies. Loren Comitor, President of
CCM&A, Nutmeg's advertising and marketing affiliate, will endeavor to
facilitate new marketing arrangements for the Company. Additionally,
Nutmeg intends to enhance the Company's website and assure that the
Company's image will reflect and be commensurate with its outstanding
prospects.
"Our investment and ongoing commitment is prompted by our extreme
optimism about the outlook for the Company and its capacity to ramp up
its operation to seize opportunities" said The Nutmeg Group's Managing
Director, Randall Goulding. "We believe the current valuation does not
adequately reflect the enormous opportunities that exist for the
company in both the near- and longer term."
"We are impressed with the Company's talented management
resources, and for such a small company to have captured the
opportunities -- is virtually unprecedented," Goulding continued.
"We plan to play an integral and continuing role in the Company's
very promising future. We are pleased to be working in partnership
with the Company to better position it to grow," said Goulding. "In
fact," Goulding said, "the specific reason for this additional cash
infusion is to focus on creating new business opportunities and joint
ventures."
H. Sam Hyams, President and CEO of Strat Petroleum commented on
the financing, "We are delighted to have signed these agreements that
give us the option to draw down over $20 million over the next two
years. The advantage of this method of structured financing is that
although the funds are secured and available to us, any draw down of
the facility will be totally at our discretion. We expect these funds
to enable us to close several opportunities, including Orenburg, on
our upcoming trip to the Russian Federation. The completion of
acquisition of the 49% interest of the Rozhdestvenskoe oil site is the
primary focus for Strat Petroleum."
Strat Petroleum, Ltd.'s strategy is to enhance shareholder value
through the acquisition of oil & gas properties with proven reserves
or producing/capped wells. Should you wish any additional information
on our projects or management team, please visit our website at
www.stratpetroleum.com or contact our Investor Relations office. Due
to the volume of interest we will make every effort to respond as
promptly as possible.
Statements made in this press release regarding the Company's or
management's intention, beliefs, expectations, or predictions for the
future are forward-looking statements. Such forward-looking statements
are subject to a number of risks, assumptions and uncertainties that
could cause the Company's actual results to differ materially from
those projected in such forward-looking statements. These risks,
assumptions and uncertainties include: the ability to compete
effectively in a rapidly evolving and price competitive marketplace;
uncertainties of completing business transactions; uncertainties of
raising necessary capital; no control over long term pricing; possible
reductions in demand for our products and services due to competition
or changes in industry conditions or political environment; changes in
the nature of energy regulation in the Russian Federation, the United
States and other countries; political risk; currency exchange risk;
changes in business strategy; the successful integration of
newly-acquired businesses; the impact of technological change;
reliance on management and management contacts; and other risks that
may be referenced from time to time in the Company's filings with the
Securities and Exchange Commission.
KEYWORD: NORTH AMERICA NEW JERSEY UNITED STATES CANADA
INDUSTRY KEYWORD: ENERGY OIL/GAS COMMUNICATIONS CONTRACT/AGREEMENT PRODUCT/SERVI
E
SOURCE: Strat Petroleum, Ltd.
CONTACT INFORMATION:
Strat Petroleum, Ltd.
Kathy Bassi, 1-905-714-0058
www.stratpetroleum.com
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