Caza Oil & Gas, Inc. announced its wholly owned subsidiary, Caza Petroleum, Inc. ("Caza Petroleum"), has entered into a credit agreement for a five-year, senior secured, reserve-based, revolving credit facility with JPMorgan Chase Bank, N.A., as Lender and Administrative Agent, with J.P. Morgan Securities LLC, acting as sole lead arranger and sole bookrunner of the Credit Facility.

Pursuant to the credit agreement, the Credit Facility commitment is a maximum $100.0 million, governed by an initial borrowing base of US$15.0 million, including a sub-facility for the issuance of letters of credit up to a maximum aggregate face amount of 10% of the borrowing base in effect. Interest on loans under the Credit Facility may be elected by Caza Petroleum to be based on LIBOR or a base rate (determined as the greatest of the prime rate, federal funds rate + 0.50% and adjusted LIBOR + 1%) from time to time, plus a margin determined based upon utilization of the borrowing base ranging from 2% to 3% for LIBOR loans and ranging from 1% to 2% for base rate loans.

The Credit Facility also requires Caza Petroleum to pay a commitment fee equal to 0.50% per annum based on the average daily unused portion of the borrowing base. Additionally, upfront fees will be paid to JPMorgan at closing in an amount equal to 0.50% of the initial borrowing base.

The borrowing base is the loan value to be assigned to the proved reserves attributable to the Company's proved oil and gas properties, as evaluated in the most recent reserve report(s) and delivered pursuant to the credit agreement. As of the closing date, the borrowing base was set at $15 million until the next scheduled redetermination or as the borrowing base is otherwise adjusted or redetermined.

Redeterminations based on updated reserve reports are scheduled semi-annually, and each of Caza Petroleum and JPMorgan have the ability to request one interim redetermination in each 6 month period between scheduled redeterminations. The initial borrowing base redetermination will occur on July 1, 2016, unless the borrowing base is adjusted or redetermined before such date in accordance with the terms of the Credit Facility.

The Credit Facility is guaranteed by Caza Petroleum's wholly owned subsidiary, Caza Operating, LLC ("Caza Operating"), and the collateral provided to secure the Credit Facility (and any hedges or cash management obligations owing to JPMorgan) consists of substantially all of Caza Petroleum's and Caza Operating's respective now owned or hereafter acquired personal property, as well as at least 80% of the PV-9 of their oil and gas properties.

The Credit Facility includes financial covenants tested on a quarterly basis, including a maximum funded debt to EBITDAX ratio of 4.0x and a minimum current assets to current liabilities ratio of 1.0x, each tested on a consolidated basis for Caza Petroleum and its subsidiaries. The Credit Facility also includes representations, warranties, affirmative and negative covenants, events of default, remedial provisions and other terms that are usual and customary for secured reserve-based credit facilities.

Subject to the borrowing base in effect, the Credit Facility is available on a revolving basis during the period commencing on the closing date and ending on the fifth anniversary of the closing date, which is January 21, 2021.

Caza Petroleum and Caza Operating will use the proceeds of the loans for (i) the payment of transaction fees and expenses in connection with the closing of the Credit Facility; and (ii) funding the working capital, capital expenditures and other general corporate purposes of Caza Petroleum and Caza Operating.

Caza is engaged in the acquisition, exploration, development and production of hydrocarbons in the following regions of the United States of America through its subsidiary, Caza Petroleum, Inc.: Permian Basin (Southeast New Mexico and West Texas) and Texas and Louisiana Gulf Coast (on-shore).