Torchlight Energy Resources, Inc. (TRCH) has signed an agreement for up to $40 million of senior secured debt funding from a group of institutional lenders, the closing of which is subject to certain terms and conditions.
The firm has reached a Securities Purchase Agreement to sell a series of notes not exceeding $40 million in the aggregate. Following completion, the company's initial draw would be a minimum of $10.35 million which would be used to lower payables and provide working capital for development, drilling and completion of the Company's wells in Oklahoma, Kansas and Texas. The lenders have deposited $5 million into escrow as part of the transaction, which will be released at closing.
As part of the Securities Purchase Agreement, Torchlight may sell additional notes as needed from time to time to fund future drilling obligations. The notes bear interest at an annual rate of 13% and mature two years from their date of sale.
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