HOUSTON, Aug. 27, 2015 /PRNewswire/ -- Hydrocarb Energy Corporation (OTCQB: HECC) announced today that it has been successful in paying down strategic notes prior to conversion.
Since January 2015, seven different of these strategic notes with varying amounts and conversion terms were sold, funded, and disclosed in the company's SEC filings in an aggregate amount of $1,831,100. To date approximately 31% of this strategic note balance has been paid off at premiums. The company expects to fully redeem the remaining Strategic Convertible Debt over the coming few months.
Beginning earlier this year the company entered into strategic financings using mainly unsecured notes that have rights for conversion into the company's common stock, which rights generally begin six months after issuance. As a critical liquidity decision, the company accepted such financings with the plan to pay off such notes prior to conversion into the company's common stock. The financings referred to by the company to be "Strategic Convertible Debt" all have the common feature of having the right to convert into the company's common stock at a discount to market. A much preferred fixed floor priced conversion was not available at the time. For that reason the goal of the company was established to pay off such debt (at a premium if necessary) prior to any conversions.
Kent Watts, Chairman and CEO, stated, "We are approaching full capacity for operations in Galveston Bay after completing the 2014 rework and recompletion program and then solving production facility problems that we encountered earlier in the year. With the rest of our production coming online we expect to realize positive cash flow from operations going forward, despite the weak environment for oil prices. We believe that paying off our Strategic Debt at this time will enhance the market for our common stock and allow us to move forward to fully develop our producing assets, a process that has the potential to at least double our production again from where we are today. Accomplishing that goal would greatly enhance our cash flow and should result in solid net income in the future."
About Hydrocarb: Hydrocarb Energy Corporation is a publicly-traded Domestic and International Energy Exploration and Production Company targeting major under-explored oil and gas projects in emerging, highly prospective regions of the world. With exploration concessions in Africa and domestic production in Galveston Bay, we maintain offices in Houston, Texas, and Windhoek, Namibia.
This news release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give our current expectations, opinion, belief or forecasts of future events and performance. A statement identified by the use of forward looking words including "may," "expects," "projects," "anticipates," "plans," "believes," "estimate," "should," and certain of the other foregoing statements may be deemed forward-looking statements. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this news release. Forward-looking statements are subject to risks inherent in natural gas and oil drilling and production activities, including risks of fire, explosion, blowouts, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of drilling operations; delays in receipt of drilling permits; risks with respect to natural gas and oil prices, a material decline which could cause the company to delay or suspend planned drilling operations or reduce production levels; risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in natural gas and oil prices; risks relating to unexpected adverse developments in the status of properties; risks relating to the absence or delay in receipt of government approvals or fourth party consents; and other risks described in the company's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the SEC, available at the SEC's website at www.sec.gov. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The forward-looking statements in this press release are made as of the date hereof. The company takes no obligation to update or correct its own forward-looking statements, except as required by law, or those prepared by third parties that are not paid for by the company. The company's SEC filings are available at http://www.sec.gov.
Contact: Kent P. Watts, CEO
800 Gessner, Suite 375
Houston, Texas 77024
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SOURCE Hydrocarb Energy Corporation