Finance & Investing | Capital Markets

Armada Extends Credit Facility; Eyes Niobrara Development

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Armada Oil, Inc. has renegotiated its existing credit facility with Prosperity Bank into a term loan with a maturity date of March 5, 2016. The Company will pay interest only for the first six months with modest principal reductions to begin in month seven.

Randy M. Griffin, CEO of Armada Oil, Inc., commented: "The drop in oil prices over the last several months has created a significant challenge to upstream oil and gas exploration and production companies. When this type of situation occurs, it requires a patient process of renegotiation of various agreements as well as the tightening of the expense budget wherever possible. In our case, we have taken a number of steps to reduce costs while working to extend agreements and outstanding payment obligations in order to allow time for the oil market to reset. The replacement of our Prosperity Bank credit facility with a term loan on what we believe to be very reasonable terms is one of those steps. We are very pleased with the results of that effort and expect to be able to announce additional positive steps in the near future. Armada has the experience and expertise to locate, evaluate, acquire and operate any size or type of oil and gas property and, as a result of the oil price reset, high quality acquisition opportunities are beginning to surface. We are not only focused on finding the right acquisition opportunity but also on moving forward with our Niobrara Shale development project in Wyoming."