Dejour Energy Inc. closes C$3.5 million debt facility

Dejour Energy Inc.

Dejour Energy Inc. (NYSE MKT: DEJ / TSX: DEJ), an independent oil and natural gas exploration and production company operating in North America's Piceance Basin and Peace River Arch regions, has closed a fixed-term, interest-only C$3.5 million debt facility due December 2014, with Calgary, Alberta, Canada-based Invico Performance Yield Fund Limited Partnership. The interest rate is 14% per annum and the principal is repayable without penalty at any time following six months from June 19. The loan facility has been structured as two advances of C$2.5 million and C$1 million, respectively.
Dejour is preparing for initial production at its Kokopelli project and enjoys a 72% working interest (WI) in the entire acreage, with an average 93% gross WI in the initial four wells, subject to a previously announced production sharing agreement with a Denver-based drilling fund. With the realization of firmer gas prices to date in 2013 and increased deeper drilling activity in the Basin, most notably by WPX Energy, Dejour is now modeling Kokopelli for the next wave of development. The company estimates the potential to drill 27 deeper Mancos/Niobrara wells and more than 200 additional Williams Fork wells on its two leases comprising a total of 2,200 gross acres at Kokopelli. Plans are being implemented to drill a high-potential Mancos production test at Kokopelli in the fourth quarter of 2013.
The first advance was delivered to Dejour June 19, and it will be partially applied toward full repayment and cancellation of the C$1.45 million “Tranche B” credit facility and the retirement of an additional C$200,000 against the company’s conventional “Tranche A” loan outstanding with its Canadian Bank.  This remains a conventional, reserve-based C$3.5 million facility bearing interest monthly at Prime + 1%.
The balance of the first advance and the second advance of C$1.0 million to be received in July 2013 is earmarked for working capital including the final costs related to the initiation of NGL-rich gas production from four wells at Dejour’s Kokopelli project currently underway in Colorado.
In connection with this financing, Dejour will issue to the lender 7,291,667 common share purchase warrants at an exercise price of C$0.24 per share, exercisable for a period of two years. A 3.5% fee is payable in cash to Colonial Advisory, agent for the transaction.
“We are excited about the association with this Canadian institutional lender,” said Robert L. Hodgkinson, Dejour’s co-chairman and CEO. “This financing provides Dejour with additional capital to support the production initiation at our flagship Kokopelli, Piceance Basin, Colorado, liquids-rich gas property, and solidifies an ongoing comfortable relationship with the company’s existing Canadian bank. Dejour can now confidently move forward, joining the ranks as a Northwest Colorado gas and NGL producer.”

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