Rocksource secures favourable financing

Rocksource ASA (“Rocksource” or the “Company”) today announced that the Company has strengthened its financial flexibility in preparations for its scheduled drilling campaign, expected to commence in 2010. Rocksource has completed a bank loan facility of NOK 500 million with SEB Merchant Banking (“SEB”) related to exploration on the Norwegian Continental Shelf (NCS). Also, the Company has signed an agreement with YA Global Master SPV, Ltd. an investment fund managed by Yorkville Advisors (“Yorkville”) for a NOK 150 million Equity Line of Credit Facility.

The NOK 500 million NCS credit facility with SEB will replace the existing facility of NOK 250 million. The three-year facility will finance the increased activities in the Company’s significant Norwegian exploration portfolio and will also support the overall corporate financing. Under the Norwegian tax regime exploration costs are refunded with 78 per cent of exploration and appraisal related expenditure in December the following year. The credit facility will bridge finance the NCS exploration refund.

The NOK 150 million Equity Line of Credit Facility with Yorkville provides Rocksource with improved financial flexibility going into a phase with a high activity level. The facility secures access to new equity, if needed. Under the terms of the Equity Line of Credit Facility, Rocksource has the right but no obligation to draw down funds in tranches in exchange for issuing new shares to Yorkville over the next four years. Should the Company decide to utilise this facility, the new shares will be issued at a price equal to a six per cent discount compared to the volume weighted average share price at the time of the draw down. The maximum size of each tranche is limited to NOK 12 million, but could be further restricted by low liquidity in the Rocksource share.

Tommy Sundt, CFO of Rocksource commented: “We are pleased to have concluded on these facilities well in advance of our drilling programme. The combined facilities give us access to more than USD 100 million, improve our financial flexibility and enable Rocksource to further pursue an ambitious exploration driven growth strategy over the next couple of years. We are grateful for the trust and support from our new financial partners SEB and Yorkville.”

Preparations are ongoing ahead of the Company’s extensive drilling campaign, expected to embark in 2010. Rocksource expects to participate in between 8-10 wells over the next two years. The Company currently has an exploration portfolio of approximately 1 billion barrels of oil equivalents (boe) in net risked resources. The upcoming drilling campaign is aiming to test approximately 200 million boe in net risked resources each year.

Oslo, 11.2.2010
Rocksource ASA
 

Trygve Pedersen
CEO

+47 90 09 77 41