NEW YORK, NY — (MARKET WIRE) — 12/05/05 — Prospect Energy Corporation (NASDAQ: PSEC)(“Prospect”) announced today that Citibank Texas, N.A. (“Citibank”) hasreleased the $9.6 million of cash that Citibank had previously required besegregated in Prospect’s custody account to secure a limited indemnity forthe benefit of Citibank with respect to any claims that might be made inconnection with Dallas Gas Partners, L.P. vs. Prospect Energy Corporation.On November 30, 2005, United States Magistrate Judge John R. Froeschner ofthe United States District Court for the Southern District of Texas,Galveston Division, issued a recommendation that the court grant Prospect’sMotion for Summary Judgment dismissing all claims by Dallas Gas Partners.The previously segregated cash had been unavailable to Prospect for anyreturn-generating investments. Prospect has now redeployed the cash intoshort-termyield-generating instruments and intends to use the funds for investmentinto private or microcap public energy-related companies as part ofProspect’s long-term investment strategy.
About Prospect Energy Corporation
Prospect Energy Corporation (www.prospectenergy.com) is a closed-endinvestment company that lends to and invests in energy-related businessesand assets. Prospect Energy’s investment objective is to generate bothcurrent income and long-term capital appreciation through debt and equityinvestments.
Prospect Energy has elected to be treated as a business development companyunder the Investment Company Act of 1940 (“1940 Act”). Accordingly, we arerequired to comply with a series of regulatory requirements under the 1940Act as well as applicable NASDAQ, state, and federal rules and regulations.In addition, we have elected to be treated as a regulated investmentcompany under the Internal Revenue Code of 1986. Failure to comply withany of the laws and regulations that apply to Prospect Energy could have amaterial adverse effect on Prospect Energy and its shareholders.
This press release contains forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995. Forward-lookingstatements involve risks and uncertainties inherent in predicting futureresults and conditions, including, but not limited to, statements as to ourfuture operating results; our business prospects and the prospects of ourportfolio companies; the impact of investments that we expect to make; thedependence of our future success on the general economy and its impact onthe industries in which we invest; the ability of our portfolio companiesto achieve their objectives; our expected financings and investments; theadequacy of our cash resources and working capital; and the timing of cashflows, if any, from the operations of our portfolio companies.
Contact:Please send investment proposals to:Prospect Energy CorporationJohn Barryjbarry@prospectstreet.com(212) 448-0702Grier Eliasekgrier@prospectstreet.com(212) 448-0702