NEW YORK, NY — (MARKET WIRE) — 04/11/05 — Prospect Energy Corporation (NASDAQ: PSEC)(“Prospect”) announced today that it has provided $9.8 million of seniorsecured debt and equity financing to Stryker Energy II, LLC (“Stryker”), anoil and gas production company based in Cleveland, Ohio.
Stryker focuses on high-graded, low-risk development drilling andproduction in the Appalachian Basin. Gas from the Appalachian Basintypically sells at a premium to NYMEX because of geographic proximity tothe heating and power generation demand markets in the Northeast. Strykeralready has 20 drilled and completed wells, as well as a multi-yearinventory of development locations, in its portfolio securing Prospect’sloan. Prospect is investing $8.3 million of senior secured debt and $1.5million of equity to fund Stryker’s continued drilling program.
“We welcome Prospect’s participation as a financial partner, and we lookforward to creating significant value through the drilling and developmentof selected Appalachian natural gas properties,” said Michael Dodson, aStryker principal. “We bring over 40 years of combined senior managementexperience, which includes over 1,500 wells drilled. In this period ofuncertainty of energy supply, the Appalachian Basin’s infrastructure,access to population and manufacturing centers, multi development targets,and premium pricing provide Prospect another rung on the energy ladder. Wethink the significant time, effort, and diligence invested in the processall speak well for our partnership with Prospect going forward.”
“The Stryker team has currently identified over 200 development locationstargeting Appalachian tight sands gas, and we are pleased to partner withthem in their ongoing development,” said John Barry, Prospect’s Chairmanand CEO. “We continue to build a diversified energy-related portfolio ofattractive debt and equity investments, and the Stryker investment is thelatest positive result of the hard work and credit analysis by ourinvestment team.”
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; and Stryker Energy II, LLC, an Appalachian oil and gas productioncompany based in Cleveland, Ohio.
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 be required to paycorporate-level taxes on any income that we earn. To the extent we do notqualify as elected, corporate-level taxes may be imposed upon our netincome.
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