Dynamic Resources Corp. Announces Loan Facility and Private Placementadmin
Dynamic Resources Corp. announced that it has entered into a US$ 6,000,000 loan to fund its on-going development costs at its Sentell Field in Louisiana. The secured 4% convertible note has a 4-year term, and is convertible into 40,000,000 common shares at a conversion rate of US$0.15 per share, subject to adjustment in certain circumstances. In addition, Dynamic has agreed to issue 20,000,000 warrants, each entitling the holder to one share at US$ 0.15, subject to adjustment in certain circumstances for a 4-year term. Under certain share price performance conditions, Dynamic may require the early conversion of the note. To date US$1,000,000 has been advanced under this facility. The remaining US$5,000,000 will be advanced upon satisfaction of certain closing conditions.
Robert Fedun, President of Dynamic, commented, “We are enthusiastic about this financing, which is the largest in the Company’s history. First, these funds give Dynamic the ability to pursue our aggressive development of the Sentell Field. In our next phase of development, our plan is to drill at least 6 Cotton Valley wells and 2 Haynesville wells, and this financing gives Dynamic the capital to fully fund this program, and move the Company towards capital self-sufficiency.”
Drilling of the first well in the development program has reached total depth and production casing has been run down the hole. Fracture completion and testing is scheduled within the next 2 weeks. The drilling rig and associated equipment is now being moved to the next location, which will be drilled to test the Haynesville formation.
Dynamic also announced that effective June 6, 2008 it completed a private placement of 50 Units at US $1,000 per Unit, to one purchaser. Each Unit consists of one 10% 2-year note and 5,000 common share purchase warrants. Each warrant entitles the holder to acquire one common share of the Company for US $0.20 per share until September 4, 2010.