Tengasco, Inc. Announces Increase of Borrowing Base Under Revolving Credit Facility with Sovereign Bank
July 15 2009 - 2:00PM
PR Newswire (US)
KNOXVILLE, Tenn., July 15 /PRNewswire-FirstCall/ -- Tengasco, Inc.
(NYSE Amex: TGC) announced that on July 9, 2009 the Company's
borrowing base was increased from $10.25 million to $11.0 million
under the revolving senior credit facility between the Company and
Sovereign Bank of Dallas, Texas. The Company's borrowing base was
increased on the completion of the regular semiannual borrowing
base review by Sovereign Bank. The $11.0 million borrowing base is
subject to a monthly available-credit reduction (MCR) of $150,000
per month beginning August 5, 2009, so that by the time of the next
regular borrowing base review in six months, the borrowing base
will again be $10.25 million. The Company's outstanding borrowing
under the credit facility is $9.9 million. CEO Jeffrey R. Bailey
said, "We are pleased to announce the increase in the Company's
borrowing base. Although the increase in the borrowing base is in
the relatively modest amount of $750,000, it has come at a time
when many oil and gas companies are encountering dramatic
reductions in their borrowing bases due to the oil and gas
commodity markets and the current economy. We believe this increase
demonstrates the value of our strategy to carefully borrow funds
and to avoid over leveraging for growth. However, the Company has
not been immune to the difficult economic climate, particularly in
the form of low crude oil prices, which remain at about 40% of the
levels attained in the summer of 2008. We have reduced many capital
and drilling plans to take account of our current cash flows. And
while we are encouraged by some recovery in oil prices since the
beginning of 2009, we are still being forced to reduce capital
expenditures needed to expand or maintain some of our producing
properties. We intend to continue to make the best possible use of
our assets until commodity prices improve, and are focusing on our
Kansas properties." Forward-looking statements made in this release
are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned
that all forward-looking statements involve risk and uncertainties
which may cause actual results to differ from anticipated results,
including risks associated with the timing and development of the
Company's reserves and projects as well as risks of downturns in
economic conditions generally, and other risks detailed from time
to time in the Company's filings with the Securities and Exchange
Commission. DATASOURCE: Tengasco, Inc. CONTACT: Jeffrey R. Bailey,
CEO of Tengasco, Inc., +1-865-675-1554
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