Digital Gas, Inc.(fka DIGGQ)

[Buckey]

DIGITAL GAS INC (U-DIGG) - News Release
Digital Gas Subsidiary Receives Offer for a $30 million Senior Credit Facility

2004-10-27 15:18 ET - News Release



NEW YORK -- (Business Wire) -- Oct. 27, 2004

Digital Gas, Inc. (OTC Pink Sheets:DIGG) - A subsidiary
of Digital Gas, Inc. received an offer for a $30 million Senior Credit
Facility from a leading global investment banking, securities and
investment management firm. If the Senior Credit Facility is accepted
by the subsidiary, the funds will be used to allow it to rapidly
expand into the coal bed methane gas business in the highly
prospective Southeast Kansas coal area.
¶ The Term Facility, which will be available for borrowing until
January 1, 2006, is for acquisitions, the implementation of an
aggressive development plan calling for the initial drilling of 425
coal bed methane ("CBM") wells, expenses associated with the
transaction and for working capital. Digital Gas has previously
announced that it intended to expand its coal gas business by
acquisition and development.
¶ The above offer came with a further offer to fund future
acquisitions of merit that the subsidiary may deem necessary to
fulfill its aggressive plan. Digital Gas previously announced that it
would like to obtain $250 million in funding for acquisitions of
natural gas and coal bed methane gas properties. The target
acquisitions will have to have significant current cash flows and
highly prospective development potential to qualify for the funding.
¶ Now that it has the offer of this senior credit, the subsidiary
will now seek to conclude private placements of up to $25 million in
high-yield convertible preferred stock and $5 million in common stock.
Part of the proceeds from the sale of the convertible preferred would
be used to fund energy related technologies and projects that are
synergistic to its basic position in the energy business. Because its
aggressive acquisition and development plans may be funded with
additional senior credit, these convertible preferred and common stock
offers are expected to be highly attractive to potential investors and
be finalized sometime in November.
¶ No further details are being made available at this time.
Contacts:

Digital Gas, Inc.
Brian Smith, 732-927-4073
[e-mail]
Source: Digital Gas, Inc.