NEW YORK, NY — (MARKET WIRE) — 04/02/07 — Prospect Energy Corporation (NASDAQ: PSEC)(“Prospect”) announced today that it has provided acquisition financing of$6 million to support the purchase of C&J Cladding, LLC (“C&J”), located inHouston, Texas.
C&J specializes in cladding onshore and offshore drilling productioncomponents. Cladding is a process of welding a bonding material onto a basemetal, where the bonding material then acts as a shield to protect themetal from erosion as highly corrosive fluids pass through the wellhead. Atypical wellhead component without cladding will last approximately fiveyears in a highly corrosive environment, while cladding extends the life toapproximately twenty years. C&J owns one of the largest arrays of automatedcladding machines in the industry, selling its services to machine shopsand oilfield equipment manufacturers. C&J is led by Jeff Hoye, BillLawrence, and company founder Jim Gray, who are experienced managers ofmetals and other businesses.
Prospect’s investment is in the form of a senior secured debt instrumentwith a first lien on all assets of C&J. Prospect also received asignificant equity ownership in C&J as part of its investment.
“Prospect has a deep understanding of industrial businesses, and weappreciate both the responsiveness of their team and the broad energysector knowledge base brought together through this partnership,” said BillLawrence of C&J.
“We are excited about the strategic opportunities to capitalize on thegrowth of deep water drilling with the value-added cladding process, whichis so vital to the production companies we serve,” added Jeff Hoye of C&J.
“We are always looking for experienced managers and strong, growingcompanies to support with our capital, and the C&J team has the trackrecord to continue building significant value,” said Mark Hull, aninvestment professional with Prospect Capital Management.
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