NEW YORK, NY — (MARKET WIRE) — 04/24/06 — Prospect Energy Corporation (NASDAQ: PSEC)(“Prospect”) announced today that it has made a $9.25 million seniorsecured debt investment in Iron Horse Coiled Tubing Inc. (“Iron Horse”), anoilfield services company based in Medicine Hat, Alberta.
Iron Horse is an energy services company that focuses on fracturestimulation for gas wells, including coalbed methane and other types ofwells. Canadian coalbed methane is one of the largest unconventionalnatural gas opportunities in North America, characterized by long-lived,high drilling success rates and low operating costs. Iron Horse has agrowing fleet of state-of-the-art coiled tubing rigs and ancillaryequipment provided on an outsourced basis to larger oilfield servicecompanies and gas production companies. The company currently has amulti-rig, multi-year contract with a major oilfield service company.
Prospect’s investment is secured by equipment and other assets of IronHorse. Prospect has also received equity in Iron Horse in conjunction withits debt investment, such equity which includes minimum preferred returnrequirements on Prospect’s capital. Prospect has disbursed $6.25 millioninto Iron Horse, with the remaining $3 million to be disbursed during thenext three months.
Iron Horse is led by Matt Bruins and Brendon Hamilton. Mr. Bruinspreviously helped to build a successful pipeline construction company inAlberta. Mr. Hamilton has prior operational experience from severaloilfield services companies, including Calfrac Well Services and TechnicoilCorporation.
“We are impressed with Prospect’s responsiveness to our capital needs, andwe look forward to growing the relationship with Prospect as we scale ourcompany,” said Bruins.
“The Iron Horse investment marks our first Canadian investment and oursecond oilfield services investment,” said Eric Klaussmann, a seniorinvestment professional with Prospect Capital Management. “We look forwardto growing our portfolio in both thriving market segments.”
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