ST. MARYS, W. Va., March 6, 2013 /PRNewswire/ -- Trans Energy, Inc. (OTCQB: TENG), a pure play Marcellus Shale exploration and production company, today announced that it has increased the size of its existing credit facility to $75 million from $50 million. The expanded facility closed and was funded on February 28, 2013.
John Corp, President of Trans Energy, said, "The expanded credit facility further strengthens our financial flexibility and increases our Company's credit line to support Trans Energy's growth and 2013 drilling program in the Marcellus Shale. The expanded credit facility, in conjunction with the operating cash flow generated from our successful Marshall and Wetzel county wells, helps us to fully fund our 2013 drilling program. We will continue to maintain our focus on low-risk, high rate-of-return wells as we prove up our acreage in the core wet-gas window of the Marcellus Shale in West Virginia. We look forward to bringing two separate rigs to Marshall and Marion Counties over the next few weeks."
The company expects to use the incremental $25 million in proceeds from this facility primarily to fund the 2013 development program of its wholly-owned subsidiary, American Shale Development, Inc. ("ASD"). ASD and its joint venture partner, Republic Energy Ventures, have announced plans to drill and complete seven horizontal wells in 2013, including three wells in Marion County, two wells in Marshall County and two wells in Tyler County. These seven well locations are expected to enable ASD to prove additional acreage in Marion and Tyler Counties, as well as to hold additional acreage through production. Funds are also expected to be used to hydraulically fracture the Martinez well in Marshall County, as well as to fund certain additional acreage purchases. The successful completion of the 2013 development program will increase the company's total to 25 horizontal Marcellus wells.
The general terms of the credit facility remain unchanged, including the maturity date, interest rate and financial covenants. There were no meaningful changes to the existing warrant agreement with the lender, and there is no make-whole applicable to the incremental $25 million of borrowings. However, the lender is entitled to an additional fee under certain circumstances, including but not limited to a change of control. For details regarding the amended and restated credit agreement, see the 8-K filed on March 6, 2013.Additional information regarding Trans Energy, including maps, investor presentations, news releases and videos can be found at the Company's website www.transenergyinc.com. Trans Energy will regularly update information on the website to provide investors with the most up to date information on the Company and its operations. About Trans Energy, Inc. Trans Energy, Inc. (OTCQB: TENG) is a pure play Marcellus Shale oil and gas exploration and development company, headquartered in the Appalachian Basin. Further information can be found on the Company's website at www.transenergyinc.com. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 - Forward-looking statements in this release do not constitute guarantees of future performance. Such forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. Forward-looking statements in this document include statements regarding the Company's exploration, drilling and development plans, the Company's expectations regarding the timing and success of such programs. Factors that could cause or contribute to such differences include, but are not limited to, fluctuations in the prices of oil and gas, uncertainties inherent in estimating quantities of oil and gas reserves and projecting future rates of production and timing of development activities, competition, operating risks, acquisition risks, liquidity and capital requirements, the effects of governmental regulation, adverse changes in the market for the Company's oil and gas production, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. For a more detailed discussion of the risks and uncertainties of our business, please refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed with the Securities and Exchange Commission. We assume no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.