Rancher Energy Corp. Announces Extension and Revised Terms of GasRock Loan
Rancher Energy Corp. announced it has negotiated a six-month extension of its debt financing with GasRock Capital LLC, and as part of the extension has agreed to pay down $2.24 million of principal, resulting in a new loan balance of $10 million.
The loan remains a senior obligation at an annual interest rate of 12% or one-month LIBOR plus 600 basis points, whichever is greater. The term has been extended from October 31, 2008, to April 30, 2009, or upon repayment of all outstanding interest and principal. There is no prepayment penalty and interest is payable monthly. Additionally, GasRock’s overriding royalty interest (ORRI) in all current Rancher Energy leases as well as any additional leases acquired by the Company during the term of the loan has been increased from 2% to 3%, although Rancher Energy retains the right to buy back one third of that ORRI at or before final maturity. For additional details on the financing, please refer to the term credit agreement and first amendment filed on Form 8-K Reports with the SEC.
