NEW YORK, NY — (MARKET WIRE) — 05/09/05 — Prospect Energy Corporation (NASDAQ: PSEC),(“Prospect”) announced today that it has agreed to provide $3.15 million ofsenior secured debt financing to Miller Petroleum, Inc. (OTC BB: MILL),(“Miller”), an oil and gas production company based in Huntsville,Tennessee.
Miller is a cash-flowing oil and natural gas company with 36,000 net acresunder lease in the heart of Tennessee’s prolific and hydrocarbon richAppalachian Basin. Beginning in 1967, the Company’s CEO, Deloy Miller, hasbuilt a successful track record spanning over thirty five years in thisBasin’s oil and gas industry. The Miller companies have drilled or servicedmore than 65% of all the wells in Tennessee.
Miller’s production and acreage position consists of the Jellico, Lindsay,Koppers North, Koppers South, and Harriman Fields. Miller currently has 46producing wells. Prospect is investing $3.15 million of senior secured debtalongside $1.0 million from Petro Capital Advisors, LLC (“Petro Capital”),of Dallas, Texas. The funding will be utilized to repay existing debt andto fund additional development drilling. Prospect and Petro Capital willreceive warrants in Miller as part of the investment.
“Miller’s focus on long lived Appalachian natural gas reserves, whichproduce steady cash flow and strong collateral, makes Miller an idealinvestment for Prospect,” said David Belzer, a Prospect investmentprofessional. “The Prospect team responded quickly to our funding needs,and we appreciate this responsiveness from an experienced and recognizedfinancial partner,” said Deloy Miller.
“Miller Exploration has extensive local basin experience, a fact that was asignificant positive contributor to our funding decision,” said GrierEliasek, Prospect’s President and COO. “This investment, together with ourpreviously announced investments into Unity Virginia Holdings and StrykerEnergy, shows that Appalachia is an important area of focus for Prospect,in addition to other geographies in the upstream and other sectors of thebroader energy industry.”
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. Since completing its initial public offering in July 2004, thecompany has invested in Gas Solutions, an East Texas gas gathering andprocessing business; Unity Virginia Holdings, a Virginia coal miningoperator; Natural Gas Systems, a Texas-based oil and gas productioncompany; Stryker Energy II, LLC, an Appalachian oil and gas productioncompany based in Cleveland, Ohio; Whymore, a Kentucky coal mining operator;and Miller Petroleum, a Tennessee oil and gas production company.
About Miller Petroleum, Inc.
Miller is a cash-flowing oil and natural gas company with 36,000 net acresunder lease in the heart of Tennessee’s prolific and hydrocarbon richAppalachian Basin. Beginning in 1967, the Company’s CEO, Deloy Miller, hasbuilt a successful track record spanning over thirty five years in thisBasin’s oil and gas industry. The Miller companies have drilled or servicedmore than 65% of all the wells in Tennessee.
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 (“Code”). The Codespecifies certain quarterly asset diversification and annual source ofincome requirements. To the extent we remain in compliance with theapplicable provisions of the Code, we will not berequired to pay corporate-level taxes on any income that we earn. To theextent we do not qualify as elected, corporate-level taxes may be imposedupon our net income.
This press release contains forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995. Forward-lookingstatements involve risks and uncertainties, including, but not limited to,statements as to our future operating results; our business prospects andthe prospects of our portfolio companies; the impact of investments that weexpect to make; the dependence of our future success on the general economyand its impact on the industries in which we invest; the ability of ourportfolio companies to achieve their objectives; our expected financingsand investments; the adequacy of our cash resources and working capital;and the timing of cash flows, if any, from the operations of our portfoliocompanies.
We may use words such as “anticipates,” “believes,” “expects,” “intends,””will,” “should,” “may,” “hope” and similar expressions to identifyforward-looking statements. Such statements are based on currentlyavailable operating, financial and competitive information and are subjectto various risks and uncertainties that could cause actual results todiffer materially from our historical experience and our presentexpectations. Undue reliance should not be placed on such forward-lookingstatements as such statements speak only as of the date on which they aremade. We do not undertake to update our forward-looking statements unlessrequired by law.
Contact:Please send investment proposals to:Prospect Energy CorporationJohn Barryjbarry@prospectstreet.com(212) 448-0702Grier Eliasekgrier@prospectstreet.com(212) 448-0702