NEW YORK — (MARKET WIRE) — 04/20/06 — Prospect Energy Corporation (NASDAQ: PSEC)(“Prospect”) announced today that it has made a $5.5 million senior debtinvestment in Charlevoix Energy Trading, LLC (“Charlevoix”), a natural gasmarketing company based in Charlevoix, Michigan.
Charlevoix is a natural gas marketing company which has operated inMichigan since 1986. Charlevoix provides approximately 20 billion cubicfeet of natural gas annually to approximately 300 commercial, industrial,governmental, and institutional customers. Charlevoix markets natural gassupplied by one of the world’s largest oil and gas producers. This supplierprovides wholesale natural gas to Charlevoix with back-to-back contracts,helping Charlevoix minimize commodity exposure.
Prospect’s capital has been used to support an acquisition of Charlevoix byVishnu Energy, LLC (“Vishnu”). Vishnu is investing equity in theacquisition as capital junior to Prospect. Prospect has also received a netprofit interest in Charlevoix in conjunction with its loan.
Vishnu is led by Rai Bhargava and Shanti Sharma, who have more than 60years of combined experience in the energy industry. Mr. Bhargava’s priorexperience includes serving during the 1990s as chief executive officer ofMCN Investment Corporation, the unregulated division of MCN Energy GroupInc., one of the largest natural gas companies in Michigan, which was laterpurchased by DTE Energy Company. One of the portfolio companies at MCNInvestment Corporation was Co-Energy Trading Company, which marketed over500 billion cubic feet of natural gas annually. Charlevoix is led by JohnHoldsworth, who has managed Charlevoix and its predecessors for nine years,and who has approximately 20 years of experience in the gas marketingindustry.
“We have known the senior Prospect professionals for many years, and welook forward to working together to grow Charlevoix,” said Bhargava.
“We are impressed with the strong, long-term relationships that Charlevoixhas with its customers and with its gas supplier,” said Bart de Bie, asenior investment professional with Prospect Capital Management. “We areconfident that Charlevoix will continue to benefit from providing itscustomers with customized solutions to satisfy their natural gasrequirements.”
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:Prospect Energy CorporationJohn BarryChairman and Chief Executive Officerjbarry@prospectstreet.comGrier EliasekPresident and Chief Operating Officergrier@prospectstreet.com(212) 448-0702