NEW YORK, NY — (MARKET WIRE) — 02/12/07 — Prospect Energy Corporation (NASDAQ: PSEC)(“Prospect”) announced today that it expects repayment of, and a gain on,Prospect’s $4.3 million debt investment in Cypress Consulting Services,Inc. (“Cypress”), a seismic surveying company based in Houston, Texas.Cypress has executed an asset purchase agreement to sell its assets to alarger energy services company, with such sale expected to close thismonth. At closing, Prospect expects to receive a combined prepaymentpremium and net profits interest payment of approximately $2.1 million.Prospect expects to earn a 1.6 times cash-on-cash return on the Cypressinvestment, over the five months since Prospect made this investment, for a175% realized cash annualized internal rate of return.
“We found Prospect to be a responsive financing partner with a thoroughunderstanding of the oilfield services sector,” said Dennis Gray, ChiefExecutive Officer of Cypress.
“The Cypress management team has delivered outstanding shareholder value,”said Bart J. de Bie, a Managing Director of Prospect Capital Management.”We look forward to providing capital to other dynamic energy sectorcompanies.”
ABOUT PROSPECT ENERGY CORPORATION
Prospect Energy Corporation (www.prospectenergy.com) is a closed-endinvestment company that lends to and invests in energy-related businesses.Prospect Energy’s investment objective is to generate both current incomeand capital appreciation through debt and equity investments.
Prospect Energy has elected to be treated as a business development companyunder the Investment Company Act of 1940 (“1940 Act”). We are required tocomply with a series of regulatory requirements under the 1940 Act as wellas applicable NASDAQ, federal and state laws and regulations. We haveelected to be treated as a regulated investment company under the InternalRevenue Code of 1986. Failure to comply with any of the laws andregulations that apply to Prospect Energy could have a material adverseeffect on Prospect Energy 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) 448-0702