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2010-09-07 23:45 ET - News Release PETROSTAR AGREES TO TERMS FOR $20 MILLION FUNDING ARRANGEMENT Petrostar Petroleum Corp. has agreed to terms on a $20-million financing agreement with Capital Corp. Merchant Banking of Orlando, Fla., USA, through a debenture instrument. Capital Corp. Merchant Banking is part of a group that was formed 25 years ago to meet the growing needs of companies, clients and promoters looking for financing and professional assistance in a diversity of projects. For further information on Capital Corp., please see its website. Financing for the project will be delivered in two phases. Phase 1 will be an initial $5-million, and phase 2 will be $15-million to be disbursed within 12 months from the initial disbursement. The total disbursement of $20-million will consist of $400,000 in common stock of the new subsidiary and $19.6-million as a debenture to the subsidiary. The debenture is for a term of 84 months with four annual fixed payments and an annual interest rate of 3 per cent calculated on the net balance of the debenture payable on a quarterly basis. There will be a 24-month grace period from the quarterly payments. Financing will be used specifically for exploration and development of Petrostar's Bakken property. Under the terms of the agreement, Petrostar will form a subsidiary private company exclusively for the Bakken project. The new subsidiary company will be a 50-50 joint venture between Petrostar and Capital Corp. Petrostar will be the operator for this project. Phase 1 of exploration will consist of further mapping of the properties and the purchase of seismic trade data, which will determine up to eight drill targets to be drilled. Phase 2 of the project will be to expand on the success of phase 1 with new wells and infill wells planned in the appropriate areas. Further property acquisition or farm-ins will be considered. As operator, Petrostar will be in charge of all aspects of the Bakken project. After a period of five years, Petrostar will have the option to buy back all shares in the subsidiary owned by the funder at the market value to be determined by a professional third party. Petrostar management is pleased to have Capital Corp. as the funding partner in this project and looks forward to a long and successful relationship. Capital Corp. has indicated to Petrostar management that it will continue to finance the project past the initial $20-million program as long as the project continues to be successful. Management negotiated the debenture with Capital Corp. rather than issuing shares and further diluting the shareholder base of the company. Management feels that this protects its shareholders and gives them the best value for this project. This is a major step forward for Petrostar to increase its oil production and revenue substantially over the next 12 to 24 months. Final documentation is being prepared with financing expected within 30 to 60 days. The company expects to start the drilling program in December, 2010. |
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| aus der Diskussion: | PETROSTAR PETROLEUM ---- Unentdeckter Ölexplorer |
| Autor (Datum des Eintrages): | money-for-nothing (08.09.10 08:13:20) |
| Beitrag: | 2,068 von 2,279 (ID:40115206) |
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