NEW YORK, NY — (MARKET WIRE) — 02/09/06 — Prospect Energy Corporation (NASDAQ: PSEC)(“Prospect”) announced today that it has provided $6,925,000 of seniorsecured debt financing to Genesis Coal Corporation (“Genesis”), a coalproduction company based in Prestonsburg, Kentucky.
Genesis is led by Jerry Tackett and David Stetson, who have significantexperience in the Appalachian coal business. Genesis holds leases onapproximately 4,700 mineral acres with approximately 10 million recoverabletons of low to medium sulfur coal reserves in Floyd County, Kentucky. Themajority of this coal is located underground. Genesis has separatefixed-price multi-year contracts for a majority of its production with amajor electric utility and a major coal producer and marketer.
Prospect’s funding is being utilized to acquire non-management shareholderinterests, to acquire additional mining equipment, and to increaseproduction rates. Prospect is receiving a significant equity ownershipposition in Genesis as part of the investment.
“We recognize that Prospect is a leading investor in mid-sized coalcompanies, and we look forward to growing our company with Prospect’svalue-added capital,” said Jerry Tackett, President and Chief ExecutiveOfficer of Genesis.
“Our investment in Genesis is our third coal-related investment in theAppalachian region and our fifth energy investment in the Appalachianregion, an area rich in natural resources and great people,” said GrierEliasek, President and COO of Prospect. “We look forward to financing otherenergy-related companies in Appalachia, and beyond.”
ABOUT PROSPECT ENERGY CORPORATION
Prospect Energy Corporation (www.prospectenergy.com) is a closed-endinvestment company that lends to and invests in energy-related businesses.We seek both current income and long-term capital gains by making debt andequity investments.
We have elected to be treated as a business development company under theInvestment Company Act of 1940 (“1940 Act”). Accordingly, we are requiredto comply with a series of regulatory requirements under the 1940 Act aswell as applicable NASDAQ, federal and state rules and regulations. We havealso elected to be treated as a regulated investment company under theInternal Revenue Code of 1986. Failure to comply with any of the laws andregulations that apply to us could have a material adverse effect on us andour shareholders.
This press release contains forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995. Any suchstatements are likely to be affected by other unknowable future conditionsand events, including many that are or are not under our control, and thatwe may or may not have anticipated or considered; accordingly, suchstatements cannot be guarantees or assurances of any aspect of the futureor future performance by us or anyone else. Actual developments andresults are highly likely to vary materially from these estimates andprojections of the future. Such statements speak only as of the time whenmade, and we undertake no obligation to update any such statement now or inthe 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