SCOTTSDALE, Ariz., Sept. 21, 2011 /PRNewswire/ -- American Standard Energy Corp. (OTCBB: ASEN) (the "Company") today announced the closing of a new $300 million senior, secured credit facility with Macquarie Bank Limited ("Macquarie Bank"). The credit facility consists of a $100 million three-year revolving line of credit and a $200 million three-year term loan.
The revolving line of credit may be used to provide working capital for exploration and production operations, and to acquire proven producing oil and gas properties. This facility will fund up to $100 million in working capital and acquisition financing. Initial availability provides for borrowing up to $12 million, which was fully drawn at closing. This availability is expected to increase as the Company acquires additional producing leases from the XOG Group, third party sellers, and as its existing and future drilling activities result in proven producing leases.
The term loan provides an additional $200 million in development capital. This tranche is available to be drawn on for 18 months after closing, and is primarily intended to fund capital expenditures for drilling and exploration of oil and gas properties. This facility can eventually convert to additional borrowings under the revolving line of credit facility as drilling activity increase ASEN's current oil and gas production. Initial availability under the term loan is $35 million, subject to Macquarie Bank's approval of a development plan to be proposed by the Company post-closing with the expectation that additional drilling programs will be added to the term loan commitment throughout its availability. Borrowings under the term loan may be converted subject to Macquarie Bank's approval into borrowings under the revolving line of credit as the Company's drilling activity increases its oil and gas production.
Borrowings under the revolving line of credit, if any, will bear interest at a spread ranging from 2.75% to 3.25% over the London Interbank Offered Rate (LIBOR) or prime rate, as the case may be, based upon the percentage of borrowing base that is advanced at any given time. For the term loan, borrowings will bear interest at a spread of 7.50% over LIBOR or prime rate, as the case may be.
Scott Feldhacker, the Company's Chief Executive Officer, said, "This credit facility represents a major milestone for the Company. In our first year of operations, we rapidly grew daily production from less than 50 BOE (barrels of oil equivalent) to a projected 2,000 BOE per day by the end of 2011. We expect that it will enable us to continue to increase our activities in the Permian Basin, Eagle Ford, and Williston Basin. We also expect to utilize the credit facility to accelerate our acquisition proven producing strategy and expand our self-directed drilling programs."
Scott Mahoney, the Company's Chief Financial Officer, added, "We are pleased with this facility, as it we expect that it will provide significant non-dilutive growth capital to the Company. We believe that this credit facility, combined with our forecasted cash flows from production, will enable the Company to fund an aggressive growth plan through the end of fiscal 2012 at a competitive cost of capital."
About American Standard Energy:
American Standard Energy Corp. is a non-operated exploration and production company based in Scottsdale, AZ. The Company's primary focus is balanced between the Permian and the Bakken and Eagle Ford oil shale resource prospects in the continental United States. The Company currently controls approximately 40,000 net acres in the following three primary prospect areas:
- 32,300 core net acres targeting the Bakken/Three Forks in North Dakota;
- 6,500 net acres targeting the Permian formation in West Texas;
- 1,200 net acres targeting a specific Eagle Ford prospect in South Texas;
Except for the historical information contained herein, this press release contains forward-looking statements regarding future events and the Company's future results that are subject to the safe harbors created under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act"). All statements other than statements of historical facts included in this report regarding the Company's financial position, business strategy, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance are forward-looking statements. When used in this report, forward-looking statements are generally accompanied by terms or phrases such as "estimate," "project," "predict," "believe," "expect," "anticipate," "target," "plan," "intend," "seek," "goal," "will," "should," "may" or other words and similar expressions that convey the uncertainty of future events or outcomes. Items contemplating or making assumptions about, actual or potential future sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond the Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: oil and gas prices, the Company's ability to raise capital, general economic or industry conditions nationally and/or in the communities in which the Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting the Company's operations, products, services and prices.
The Company has based these forward-looking statements on its current expectations and assumptions about future events. While the Company's management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond the Company's control.
SOURCE American Standard Energy Corp.