News out: Tandem Energy Announces Execution of Term Sheet with Guaranty Bank for a Senior Debt Facility in the Initial Amount up to $35 Million
Tuesday April 19, 9:01 am ET
MIDLAND, Texas--(BUSINESS WIRE)--April 19, 2005--Tandem Energy Holdings Inc. (OTC:TDYH - News) today announced the execution of a term sheet for a secured senior debt facility with Guaranty Bank of Houston, Texas. The senior facility, which is expected to close by May 15, 2005, encompasses an initial oil and gas secured borrowing base of up to $35 million, coupled with a $5 million line of credit to be utilized for letters of credits, plugging and abandonment bonds and hedging strategies to be implemented by Tandem to provide downside protection against the possibility of declining oil and gas prices. The term of the senior loan is three years, and bears interest with both prime and libor options. The amount available on the credit facility may be increased on a semi-annual basis based upon the contemplated increase in reserves of Tandem as it completes its previously announced acquisition and drilling programs. The closing of this senior debt and line of credit are subject to completion of the final due diligence on the Tandem assets by the bank, which is presently ongoing.
Todd Yocham, CEO of Tandem, who negotiated the term sheet for the Company with Guaranty Bank stated: "We interviewed several lenders in search of the best strategic relationship we could find that would allow us to achieve our revenue goals over the next few years. After narrowing the prospective lenders to three institutions, we selected Guaranty Bank because of their responsiveness to our requests, and their unique understanding of the Company that we are building. We also believe that Guaranty Bank is committed to our success and will increase the debt facility to meet our needs as we continue to grow."
The debt facility will be utilized by the Company to refinance its existing acquisition debt, finance the Company's immediate acquisitions, provide working capital and drilling and completion proceeds for the Company's 2005 drilling program.
The Company has also held serious discussions with a number of institutional investors regarding the infusion of a substantial amount of long-term equity. Lance Duncan, Senior Vice President of the Company, who has been directly involved in these equity discussions stated: "The Company has been presented with several proposals for up to $100 million of equity in one form or another, which would have made this debt facility unnecessary. All of these proposals would have been based on a share price substantially in excess of our present price. However, Tandem's management decided that the adoption of blended capital structure combining senior debt and equity was in the best interest of the Company and its shareholders. We are now considering equity proposals in the range of $25 million, which should be more than sufficient to complete our immediate acquisitions and our 2005 drilling program, while giving us financial flexibility to pursue other opportunities as they arise." The Company contemplates a closing of the institutional equity placement at or around the time of the closing of the senior debt facility.
ABOUT TANDEM:
Tandem Energy Holdings, Inc. was formed to acquire 100% of the outstanding stock of Tandem Energy Corporation and to acquire other low-risk oil and gas properties located in Texas, New Mexico, Oklahoma, and Kansas. The Company combines principal shareholders with over 100 years of oil and gas experience, whose goal is to use their combined talents to build a major independent oil and gas company. Tandem expects to complete its financial audit and receive its independent engineering report, which will be issued according to SEC standards, within the next 75 days. At that time, the Company will file all necessary reports with the SEC to gain reporting company status, and immediately apply for a listing on the Nasdaq NMS exchange or AMEX with the goal of obtaining such a listing no later than the end of the third quarter of 2005.
FORWARD LOOKING STATEMENTS:
Statements about the Company's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as the term is defined in the Private Litigation Reform Act of 1995. The Company's actual results could differ materially from expected results. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances. Should events occur which materially affect any comments made within this press release, the Company will appropriately inform the public.
Tandem Energy Holdings Inc.
200 N. Loraine, Suite 500
Midland, Texas 79701
432-683-9700
Contact: Lance Duncan
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Contact:
Redwood Consultants
Jens Dalsgaard, 415-884-0348
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Source: Tandem Energy Holdings Inc.
Cash is King until further notice!!!
My comments on companies are usually my opinion of long term success (years). The PPS may go up or down greatly in the meantime depending on the number of greedy suckers with money.
