Caza Oil & Gas Inc. (CAZ.TO, CAZA.L) announced that it has entered into a Note Purchase Agreement with Apollo Investment Corporation, an investment fund managed by Apollo Investment Management, or the "Note Holder" pursuant to which the Note Holder has agreed to purchase from the Company up to US$50 million of senior secured notes of the Company.
The company said it received US$20 million at the closing of the Agreement and may draw additional advances of up to US$30 million in aggregate at its discretion during the following 15 months, subject to specified performance and financial requirements.
The company stated that it will use the proceeds from the sale of the Notes to fund an initial program to drill up to 12 oil and gas wells on its Bone Spring properties located in Lea and Eddy Counties in southeastern New Mexico over the next 12 months. Upon completion of the initial program, the Company plans a second program to drill 12 additional oil and gas wells in the Bone Spring play, such program to be funded from the proceeds of a subsequent sale of Notes pursuant to the Agreement.
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