NEW YORK, NY — (MARKET WIRE) — 09/07/06 — Prospect Energy Corporation (NASDAQ: PSEC)(“Prospect”) announced today that it has made a $4.3 million senior securedinvestment in Cypress Consulting Services, Inc. (“Cypress”), a seismicsurveying company based in Houston, Texas.
Founded in 2002, Cypress is a global logistics supply company deliveringturnkey solutions for seismic data recording operations as well as for oiland gas drilling operations through more than 140 contractors. Servicesprovided by Cypress include seismic project management, bid procurement,seismic contractor scheduling, surveying, and permitting. Cypress isdeploying the proceeds of the Prospect loan primarily to acquire the assetsof World Wide Drilling, Inc. (“World Wide”), a leading driller of shallowholes (“shot holes”) that enable the collection of seismic data. World Widehas 24 mobile drill rigs deployed across the United States. When loadedwith an explosive charge, these shot holes serve as seismic energy sourcesin the recording of two and three dimensional seismic imaging surveys, afundamental precursor to exploratory drilling for oil and gas. Cypress andWorld Wide have a robust backlog of contracts with seismic acquisition anddata processing companies as well as oil and gas production companies.
Prospect’s senior debt investment in Cypress is secured by certainreceivables, mobile drilling rigs acquired from World Wide, watercraft, andother specialized equipment and assets. Prospect received a net profitinterest in Cypress as part of its investment.
“The Prospect team responded quickly to our time-sensitive acquisitionneeds, reflecting Prospect’s knowledge and expertise in our industry,” saidDennis Gray, Chief Executive Officer of Cypress.
“We are pleased to be investing in a leading participant in the high-growthbusiness of seismic data collection,” said Bart de Bie, a senior investmentprofessional with Prospect Capital Management.
Separately, Prospect announced today that it has recently disbursed theremaining $3.0 million of its $9.25 million senior secured debt investmentin Iron Horse Coiled Tubing Inc. (“Iron Horse”), an oilfield servicescompany based in Medicine Hat, Alberta. This disbursement is being utilizedfor Iron Horse’s purchase of additional coiled tubing equipment.
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) 448-9577