Daily News: January 4, 2018

Providence, Fifth Partners Upsize PetroShare Facility

PetroShare obtained $5 million in debt financing and closed an agreement in principle to obtain an additional $20 million senior secured credit facility with Providence Energy and Fifth Partners as lenders.

Providence is an affiliate of the company’s existing lender and beneficial owner of approximately 12% of its common stock, as well as its working interest partner. The additional $20 million is subject to negotiation and execution of definitive agreements and completion of satisfactory diligence by the lender. Closing of the second tranche of the financing is anticipated on or before January 28, 2018

Stephen J. Foley, CEO of PetroShare said, “We are pleased to report that we have agreed in principle with our strategic partner, Providence Energy and their business associate, Fifth Partners, to significantly expand the scope of our relationship through a new credit facility, of which the first $25 million will be in the form of convertible senior secured debt. PetroShare received $5 million in proceeds upon signing of the Letter Agreement and anticipates closing on the remaining $20 million of the initial funding by late January 2018. The majority of the proceeds from the second closing will go toward the completion of surface production facilities, pipeline construction and completion costs related to our 14 well operated Shook Pad, as well as retiring current debt. As part of the agreement, the maturity date for the Providence Energy Partners III line of credit has been extended to January 28, 2018 and, if the parties consummate the aforementioned $20 million second funding, will be further extended to June 30, 2018.”

The $25 million senior secured facility will be due two years from the closing date of the second tranche of financing, or in the event the company does not close on the $20 million second tranche, the initial $5 million and $3.55 million owed to Providence Energy Partners III, plus accrued interest, will be due on January 28th, 2018. The loan bears interest at the greater of three-month LIBOR or 1%, plus 14%.

PetroShare is an independent oil and natural gas exploration and development company that targets capital deployment opportunities in established unconventional resource plays.