HOUSTON, June 30 /PRNewswire-FirstCall/ -- Dune Energy,
Inc. (NYSE Amex: DNE) announced today it closed on the $30 million sale of South Florence field and entered into a fifth
amendment to its revolving credit agreement with its Wells Fargo
Foothill.
Sale of South Florence Field
Dune closed the sale of its South
Florence field to a private party on June 29, 2010 for $30
million with an effective date of May
1, 2010. Dune expects to use proceeds from the sale to
either temporarily or permanently repay borrowings under its
$40 million revolving credit
facility, and/or to invest in new assets or fund maintenance,
repair or improvement of its existing properties and assets.
Wells Fargo Foothill Revolver
A fifth amendment to the Wells Fargo Foothill revolver has been
signed reflecting modified terms associated with the sale of Dune's
South Florence field. Under
the amendment, Dune's availability will be reduced to $20 million and the production and EBITDA
covenants will be adjusted to reflect the resultant production and
EBITDA of Dune without the South
Florence field. Currently $23
million is borrowed under the revolver and $8.5 million of letters of credit are
outstanding.
Operations Update
The Wieting #33 at the Chocolate Bayou field is drilling below
10,500 feet. Casing is anticipated to be set at approximately
11,600 feet and again at approximately 12,500 feet. The
Chocolate Bayou prospect has potential reserves of approximately 60
Bcfe which will be tested by the #33 well. Dune will have a
50% working interest in the reserves and production associated with
this high potential prospect at casing point. During the
summer we anticipate development wells being drilled at
Live Oak field and Bayou Couba and
post hurricane season anticipate commencing a 2-3 well program at
Garden Island Bay.
James A. Watt, President and
Chief Executive Officer stated, "The sale of South Florence and the fifth amendment to the
revolver provide liquidity to implement our drilling program to add
new reserves and production to replace those sold. Our direct
investments in the drilling program will be controlled to provide
sufficient liquidity to satisfy obligations to note holders and
remain within the covenants of our amended revolver. We
continue working with industry partners to structure deals to
provide capital for new drilling opportunities within our existing
asset base."
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http://www.duneenergy.com/news.html?b=1683&1=1
FORWARD-LOOKING STATEMENTS: This document includes
forward-looking statements that are intended to be covered by
"forward-looking statements" safe harbor provided by the Private
Securities Litigation Reform Act of 1995. All statements
included in this press release that address activities, events or
developments that Dune Energy expects, believes or anticipates will
or may occur in the future are forward-looking statements.
Forward-looking statements include, but are not limited to,
statements concerning estimates of expected drilling and
development wells and associated costs, statements relating to
estimates of, and increases in, production, cash flows and values,
statements relating to the continued advancement of Dune Energy,
Inc.'s projects and other statements that are not historical facts.
When used in this document, the words such as "could," "plan,"
"estimate," "expect," "intend," "may," "potential," "should," and
similar expressions are forward-looking statements. Although Dune
Energy, Inc. believes that its expectations reflected in these
forward-looking statements are reasonable, such statements involve
risks and uncertainties and no assurance can be given that actual
results will be consistent with these forward-looking statements.
Important factors that could cause actual results to differ from
these forward-looking statements include the potential that the
Company's projects will experience technological and mechanical
problems, geological conditions in the reservoir may not result in
commercial levels of oil and gas production, changes in product
prices and other risks disclosed in Dune's Annual report on Form
10-K filed with the U.S. Securities and Exchange Commission.
SOURCE Dune Energy, Inc.