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East West Bank Arranges $30MM Credit Facility for Jericho Oil

August 03, 2016, 07:36 AM
Filed Under: Energy
Related: East West Bank

Jericho Oil Corporation announced that, in conjunction with its private family partner, it has entered into a $30 million senior secured revolving credit facility (the "Facility") with East West Bancorp as the sole arranger. The initial borrowing base has been set at $10 million. The facility is available for working capital requirements, capital expenditures, acquisitions, general corporate purposes, and to support letters of credit.

The facility will bear interest at a rate of WSJ Prime (currently 3.50%) plus 75 basis points and will be payable monthly. The interest rate will be fixed at 4.25% for the first six months of the facility. The facility, subject to customary financial covenant tests, matures on July 29, 2018 and will be subject to semi-annual re-determinations and will be secured by a first lien on substantially all of the Company's assets.

"We welcome our new relationship with East West, a Tier 1 bank with a talented, veteran energy team," said Allen Wilson, CEO of Jericho Oil. "Their approval of the Facility and the favorability of their terms is a testament to our clean balance sheet and the quality of our existing portfolio of assets, and allows us to accelerate our roll-up of undervalued, high quality Central Oklahoma oil and gas assets. Until now, we have financed our acquisitions and property development exclusively through the strong support of our equity shareholders and today marks an exciting step forward in positioning our capital structure to support further growth and opportunities."

In connection with and subject to the new facility, Jericho has also entered into commodity hedging contracts to strengthen and protect the Company's cash flows, while maintaining optimal upside, covering 75% of forecasted engineered oil and natural gas volumes for the term of the facility.

Jericho is a growth-oriented oil and gas company engaged in the acquisition, exploration, development and production of overlooked and undervalued oil properties in the Mid-Continent.

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