Clear Mountain Resources announced that negotiations for the debt portion of the financing to complete the company’s proposed acquisition of certain oil and gas assets situated in Osage County, OK are advancing with a known financial institution in the U.S.

The company is seeking a senior secured first lien credit facility of up to $200 million, with an initial borrowing base commitment of up to $57 million with a syndicate of banks and other financial institutions.

It is anticipated that $50 million of the initial borrowing base will be available for the funding the acquisition, subject to conditions and certain hedge requirements, with the flexibility to increase the initial borrowing base from time to time to fund additional acquisitions, capital expenditure programs and general corporate purposes including letters of credit and working capital, subject to lenders’ consent.

The credit facility is expected to be for a term of four years and bear interest at LIBOR plus the applicable margin or Base Rate plus the applicable margin, all to be defined in the formal credit documentation.

The facility will also be secured by a perfected first priority mortgage, security interest and assignment of production covering the company’s oil and gas properties and associated assets and all other personal property of the company.

Completion of the credit facility will be subject to numerous conditions precedent including, but not limited to, completion of satisfactory due diligence, title opinions and formal documentation, the company having received a minimum of $70 million in equity financing to fund, among other things, the balance of the purchase price of the acquisition, the domestication of the company from British Columbia to Delaware as announced on January 6, 2014 and closing of the acquisition. A cash arrangement fee will also be payable in connection with the credit facility in accordance with industry standards.

Vancouver, BC-based Clear Mountain Resources is a junior mineral resource exploration company.