GeoPetro Resources Company Secures Loan Extensions With Bank Of Oklahoma And Certain Private Parties
SAN FRANCISCO, March 23, 2011 /PRNewswire/ -- GeoPetro Resources Company (NYSE Amex: GPR) ("GeoPetro", "we", "our" or the "Company") is pleased to announce that its wholly-owned, indirect subsidiary, Madisonville Midstream LLC ("MML"), has entered into an amendment with Bank of Oklahoma, National Association whereby the maturity date on its Term Loan has been extended by one (1) year, from December 31, 2011 to December 31, 2012. The Term Loan, which had an initial principal balance of approximately $7.7 million, has been paid down by MML to its current principal balance of approximately $4.6 million. In addition to the extension of the maturity date, the amendment reduced the per annum interest rate by three-quarters of one per cent (3/4%) to LIBOR plus four and three-quarters percentage points (4 3/4%) per annum. Based on the current LIBOR rate, this rate of interest is approximately five per cent (5%) per annum. MML also renegotiated the option to elect a Prime Interest Rate calculation (instead of the "LIBOR plus" election) which has also been reduced by three quarters of one per cent (3/4%) per annum to Prime Rate plus three and one-quarter percentage points (3 1/4%) per annum.
In addition to the above extension with Bank of Oklahoma, National Association, the Company has also successfully negotiated the extension of certain promissory notes with private parties totaling approximately $1.5 million by one (1) year, with maturity dates extending into 2012 and 2013.
Addressing the loan extensions, GeoPetro's President and CEO, Stuart J. Doshi commented "We are particularly pleased with the extension of the Term Loan facility with Bank of Oklahoma, National Association and the promissory notes with certain private parties. The loan extensions significantly improve the Company's balance sheet and liquidity. These modifications also position the Company to continue its strategic goals of enhancing production and securing a farm-out partner in the drilling of a deep well to test six (6) highly prospective zones in the Madisonville Project. The 3D seismic shows a very attractive structural closure with a high potential for a major discovery."
The Madisonville structure has been a prolific producer of oil and natural gas. The Rodessa and shallower zones have to date produced in excess of 30 million barrels of oil and 100 billion cubic feet of natural gas. The six (6) zones below the Rodessa Formation have potential recoverable reserves of approximately one (1) trillion cubic feet of natural gas.
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