NEW YORK, NY — (MARKETWIRE) — 07/05/07 — Prospect Capital Corporation (NASDAQ: PSEC)(“Prospect”) announced today that on June 29, 2007, Prospect committed toprovide, and subsequently funded, growth financing of approximately $45.0million to H&M Oil & Gas, LLC (“H&M”), located in Dallas, Texas.
Established in 2002 through the merger of H&M Partners LLC and MJM Oil &Gas, H&M is an oil and gas production and development company focused onTexas. H&M has approximately 8,000 acres under lease in the Spraberry andWolfcamp trend in Martin County in West Texas. H&M is led by WilliamJackson, who has more than three decades of experience as a general managerand petroleum engineer in the oil and gas industry. H&M is majority ownedand controlled by a private equity sponsor in Chicago.
H&M is utilizing Prospect’s financing for the drilling and completion ofnew wells, as well as the refinancing of existing indebtedness. Prospect’sinvestment is in the form of a senior secured debt instrument with a firstlien on all assets of H&M, including receivables, wells, leases, and otherinfrastructure. Prospect has received a net profit interest in H&M as partof its investment.
“This financing allows H&M to more than triple the rate of its developmentprogram at a time when we can lock in favorable oil prices. Prospectunderstands the technical and business merits of our strategy, and we hopeto grow our funding relationship with Prospect as we continue to achievesuccess in the field,” said William Jackson, CEO of H&M.
“We view H&M’s portfolio of assets in West Texas as attractive, and we lookforward to continued increases in the company’s proved reserve base,” saidDavid Belzer, a managing director with Prospect Capital Management.
ABOUT PROSPECT CAPITAL CORPORATION
Prospect Capital Corporation (www.prospectstreet.com/) is a closed-endinvestment company that lends to and invests in private and microcap publicbusinesses. Prospect Capital’s investment objective is to generate bothcurrent income and capital appreciation through debt and equityinvestments.
Prospect Capital has elected to be treated as a business developmentcompany under the Investment Company Act of 1940 (“1940 Act”). We arerequired to comply with a series of regulatory requirements under the 1940Act as well as applicable NASDAQ, federal and state laws and regulations.We have elected to be treated as a regulated investment company under theInternal Revenue Code of 1986. Failure to comply with any of the laws andregulations that apply to Prospect Capital could have a material adverseeffect on Prospect Capital and its shareholders.
This press release contains forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995. Any suchstatements, other than statements of historical fact, are likely to beaffected by other unknowable future events and conditions, includingelements of the future that are or are not under the Company’s control, andthat the Company may or may not have considered; accordingly, suchstatements cannot be guarantees or assurances of any aspect of futureperformance. Actual developments and results are highly likely to varymaterially from these estimates and projections of the future. Suchstatements speak only as of the time when made, and the Company undertakesno obligation to update any such statement now or in the future.
Please send investment proposals to:Grier EliasekPresident and Chief Operating Officergrier@prospectstreet.com(212) 448-9577