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Texas Capital Bank Provides $25MM Credit Facility to Nostra Terra

February 03, 2014, 07:37 AM
Filed Under: Energy

Nostra Terra announced it has entered into a US$25 million credit facility with Texas Capital Bank. The new facility contains both a three-year revolving credit facility and a standby letter of credit facility with an initial nominal limit of US$25 million. Interest is charged on monies drawn down at the current rate of 4.25% (determined by the higher of either: the sum of the Wall Street Journal Rate plus 1% or 4.25%).

Texas Capital Bank is a highly regarded energy lender based in Dallas Texas, with over $11 billion in assets under management. No warrants or equity are to be issued as part of the facility, hence no dilution to shareholders. The company has agreed to an initial borrowing base of $500,000, to be reassessed at least semi-annually.

The $25 million Facility includes provisions to increase the borrowing base as additional wells are brought on production. The initial borrowing base has been determined upon stabilized production from the Company's top five wells across Kansas, Colorado and Oklahoma, not the entire portfolio. The company believes that additional value from the reworking of CT3 and several currently producing additional wells will be added by the end of Q1 and going forward.

Nostra Terra will use the credit line to expand its portfolio further. The proceeds are intended for future drilling within the Chisholm Trail Prospect, High Plains Prospect, and other prospects as the Company elects, without restriction by the Bank.

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